AdKnowledge Proves Click Rates Ineffective for Web Marketing Optimization

Report Shows Little Correlation Between Click Rates and Conversion Rates;
Online Marketers Need to Understand Real Drivers of Brand Awareness and
Purchase Behavior

Palo Alto, Calif. - August 16, 1999 - AdKnowledge today released its Q2
Online Advertising Report (OAR). This report is a compilation of Web
advertising statistics and trend analyses gathered from the AdKnowledge
System, and analyzed by the new AdKnowledge eAnalytics division. Together,
the AdKnowledge System and eAnalytics enable marketers and agencies to
measure, optimize and execute Web marketing campaigns. Leading the reports
findings are statistics demonstrating that click rates have little value as
indicators for return on investment (ROI) optimization because their
correlation to conversion rates is so low.

There has been a lot of talk lately about declining click rates, said
AdKnowledge Vice President Steve Findley. This new data proves that Web
advertisers who are just looking at click rates are missing the bigger
picture. The Web is fast becoming a more sophisticated advertising medium.
Because its so measurable, data mining will be increasingly used by smart
marketers to optimize current campaigns and point the way towards more
efficient campaigns in the future. Our customers already are taking
advantage of this capability in AdKnowledges new eAnalytics and DataDNA
services, he added.

The AdKnowledge Online Advertising Report findings include:

1. Click Rates Alone Are of Little Value According to the AdKnowledge OAR,
only 14.3% percent of the time is the ad with the highest click rate in a
campaign also the ad with the highest conversion rate. (Conversion rate is
considered to be the rate at which people are converted from a view of an
ad on the Web to a desirable action on an advertisers site, like a sale or
registration.) Other data shows that when selecting the best Web sites for
a campaign based on click rates and not conversion rates, there is a 50/50
chance of choosing incorrectly. Leaving that much to chance is simply
unacceptable in Web marketing today, said Findley.

2. Web Advertising Expansion Continues
According to the AdKnowledge OAR, the number of sites and networks seeking
advertising has continued to grow. In the second quarter, the number of Web
media properties grew by 296 sites. At the end of March, the Web included a
total of 1,815 sites and networks that accepted advertising, by the end of
June, that number had risen to 2,111 an increase of 16.3%.

3. Average CPMs Decline Further
The report shows online advertising rates continued to decline in Q2, at
the rate of 2.1% for the quarter. In Q1, average CPM cost was $34.96, while
the average CPM cost in Q2 was $34.23. While not a significant dip, it is a
steeper decline rate than seen in Q1, (0.5%) but not as steep as seen in Q4
last year (3%).

4. Rich Media Acceptance Continues Growth The report shows that interest in
rich media advertising continues. All rich media formats experienced
double-digit growth this quarter, as the number of sites accepting rich
media ads continues to increase.

About the OAR Report
AdKnowledge uses a powerful data warehouse to supply valuable information
from its Online Advertising Report (OAR) to marketers and agencies to help
them optimize their Web advertising campaigns. The OAR is a compilation of
Web advertising statistics analyzed by AdKnowledge eAnalytics, which
provides a new level of insight into online brand awareness and purchase
behavior. The information is gathered from the AdKnowledge System, which
includes four components that span planning, campaign buying and
trafficking, ad serving and targeting, and reporting. As the only provider
of a complete set of Web ad management services exclusively to marketers
and agencies that is independent of the media, AdKnowledge is in a unique
position to provide an unbiased snapshot of the online advertising market.
The AdKnowledge Systems database contains more than 2,100 Web sites,
which, according to Nielsen//NetRatings, reaches over 94.1% of the overall
Web audience. The full OAR is available at
http://www.adknowledge.com/oar_2ndqtr99.pdf (requires Acrobat Reader).

About AdKnowledge
AdKnowledge is the only provider of complete Web marketing management
services focused entirely on the needs of advertising buyers. AdKnowledge
combines eAnalytics and data mining with outbound campaign management to
provide sophisticated marketers and agencies with insights into what drives
brand awareness and purchase behavior across all Web sites and networks.
The AdKnowledge System, an easy-to-use, Web-based tool, enables clients to
act on those insights to execute, measure and optimize Web marketing
campaigns. By not selling media, the company remains independent and can
provide marketers with unbiased intelligence. AdKnowledge is a privately
held company, funded by Kleiner Perkins Caufield & Byers, Mayfield Fund,
The Walden Group, Partech International, Sandler Capital Management,
Techno-Venture Co., Ltd. and GeoCapital Corporation. The companys
headquarters are in Palo Alto, California, with offices in New York.
Contact via phone at 650-842-6500 or on the Internet at
http://www.adknowledge.com.

###

Contacts:
Michele Schott Pat Lucas
AdKnowledge Big Sky Communications, Inc.
650-842-6502 530-888-8311
mschott@adknowledge.com pat@bigskypr.com