Towards Integral World Wide Web Marketing Strategies. Creating Points of Communication that Count

Research Paper (undergraduate), 1997

103 Pages, Grade: 1


I Executive Summary

Many managers are interested in how the World Wide Web (WWW) can be beneficial for their marketing mix. This thesis provides a systematic approach that can help managers think about and understand the steps necessary to move towards integral WWW marketing strategies." We show that Web sites can function as "points of communication" that count in the big battle of improving service quality and gaining sustainable market share. In opposition to traditional marketing concepts that highlight activities around points of public and points of sale we introduce the WWW as a medium that focuses on creating "points of communication" that become exceedingly crucial in the new customer centered service economy of tomorrow.

In the business world it is not enough just to do something. Things are only relevant if they obviously support the company's core processes. To make the support obvious it needs to be measured. And as every business activity should help to achieve measurable results, we are going to show possibilities to measure Web marketing success despite the limitations of today's WWW marketing efficiency measurement.

In the second chapter of this thesis we present concepts of state-of-the-art WWW marketing measurement. We analyze these concepts and show their technical, storage, and performance limitations. But the suggestions we found about how to overcome the technical limitations of WWW measurement only touch the surface of the measurement challenge. To make a distinction between different approaches for Web marketing, we will give a deeper insight into the nature of Web measurement. We identify communication and knowledge gaps between Web technicians and Web marketers as a main reason for the unsatisfying Web measurement concepts.

This critique is the fundament for the marketing concepts we introduce in chapter three: Integral marketing concepts that follow the paradigm shift from the traditional one-to-many to the new many-to-many communication, concepts for a new knowledge and experience based marketing.

With this wider access to integral marketing concepts chapter four highlights the opportunities of WWW marketing activities in different fields of communication. It shows how the WWW can become beneficial to marketing and sales communication, to internal communication and to supplier communication. Based on the experience that every business activity has to bring measurable results we give examples for WWW marketing opportunities and also for measures to evaluate their effectiveness.

The "WWW Marketing Module and Inspiration Kit" presented in chapter five contains examples of companies that already have found innovative strategies for WWW marketing. These list of good and even outstanding practices is not a complete overview but it can function as inspiration and it might inspire marketers to look out for interesting marketing ideas in the WWW on their own.

Chapter six and seven show more detailed how WWW marketing as part of integral marketing strategies might look like. Both chapters are based on real life examples: Chapter six shows the WWW marketing strategy of Octave Systems, Inc., and chapter seven shows the proposal of a WWW marketing strategy developed for the Fred Astaire Dance Studio in Santa Clara, CA.

This thesis is a result of an in-depth field research in the Silicon Valley. It was written in close interaction with Mr. Roy Worthington, one of the early “E-business men” in the Silicon Valley, and Prof. Peter Hackbert, Institute of International Business and Entrepreneurship, California State University Monterey Bay.

II Table of Content

I Executive Summary

1 Introduction

2 WWW Marketing and Efficiency Measurement
The Mechanics of WWW Measurement
Technical Limitations of WWW Measurement
1. Big Domains
2. Multi-file Pages
3. Proxy Servers
4. Shared Computers
5. Dynamic IP-Addresses
6. Cache Servers
7. Search Engines/ Agents
Performance Limitations of WWW Measurement
1. Performance Issues
2. Storage Issues
Conceptual Limitations of WWW Measurement
How to Overcome these Limitations
1. Counting Pages
2. Page Grouping
3. Educated Guessing
4. Session ID
5. Third-Party Rating Systems
Who is Offering WWW Measurement Tools?
Off-Site WWW Measurement Solutions
On-Site WWW Measurement Solutions
What is WWW Measurement Good For?
The Broadcasting Approach
The Narrowcasting Approach
The Experimentation Approach

3 WWW Marketing and Integral Marketing Concepts
The Death of the Salesman or the End of Mass Marketing
Knowledge Based Marketing
Experienced Based Marketing
How to Overcome Conceptual Limitations?
Towards an Integral WWW Marketing Strategy

4 Opportunities in an Integral WWW Marketing Concept
Opportunities for Customer Information and Pre Sales Services
Opportunities for Sales Service
Opportunities for Customer Support and After Sales Service
Opportunities for External Communication/Public Relations
Opportunities for Internal Communications
Opportunities for Corporate Purchasing

5 Modules for an Integral WWW Marketing Concept
WWW Marketing Module and Inspiration Kit

6 WWW Marketing as an Integral Part of an Integral Marketing Strategy: The Case of Octave Systems Inc.
Description of the Business Background
Description of the General Marketing Strategy
The Home page ""
Educating the Visitor
Selling to the Visitor
Servicing the Visitor
The Media Mix
The Promotion of the Site
1. Registering with Web Directories and Search Engines
2. Intuitive Web Addressing
3. Paid Pointers (WWW Advertisements)
4. Reciprocal Pointers (Co-linking)
5. Voluntary Pointers
6. News Group Marketing
7. Traditional Media Channels
Measuring the Effectiveness of Octave's Web Site
Future Outlook

7 WWW Marketing as an Integral Part of an Integral Marketing Strategy: An Implementation for the Santa Clara Fred Astaire Dance Studio
General Framework
1. Analysis of the Business Background
2. Analysis of the General Business Goals
3. Analysis of the Competitive Advantages
4. Analysis of Areas where the Competitive Advantages Become Most Obvious
5. Analysis of the Current Marketing Channels and Activities
6. Marketing Goals for the WWW Marketing
7. Ways to Communicate the Benefits and Advantages of the company
8. Ways to Promote the Web Site
9. The Digital Version
10. Measuring the Success of the WWW Marketing
Proposal for the WWW Marketing of the Santa Clara Fred Astaire Dance Studio
1. Analysis of the Business Background of the Fred Astaire Dance Studio
2. Analysis of the General Business Goals of the Fred Astaire Dance Studio
3. Analysis of the Competitive Advantages of the Fred Astaire Dance Studio
4. Analysis of Areas where the Competitive Advantages become most obvious
5. Analysis of the Current Marketing Channels and Activities of the Fred Astaire Dance Studio
6. Marketing goals for the WWW marketing of the Fred Astaire Dance Studio
7. Ways to Communicate the Benefits and Advantages of the Fred Astaire Dance Studio
8. Ways to Promote the Web Site of the Fred Astaire Dance Studio
9. The Digital Version of the Fred Astaire Dance Studio's Web Site
10. Measuring the Success of the Fred Astaire Dance Studio's WWW Marketing

8 Efficiency Measurement in an Integral WWW Marketing Concept

9 References
Papers and Web Sites

Appendix A The Internet
A Brief History of the Internet
Features of the Internet
The World Wide Web
Electronic Mail (e-mail)
News Groups
Mailing Lists
Information Vending Machines (FTP, Gopher)
Internet Relay Chat (IRC) and Network Games

1 Introduction

"Like the 18th century explorers who claimed their region, Intel and other California based high-tech companies [...] were among the first to venture onto the World Wide Web. In mapping this uncharted terri­tory, they stumbled, started over, stumbled again, started over again - and, like the ancestors, established the culture for a new territory's colonialization. [...] This much is indisputable: In terms of timing and innovation, Silicon Valley's experiments, triumphs, and failures offer valuable lessons for later generations of businesses staking claims in cyberspace. Some of what these companies learned so painfully seems painfully obvious now: don't wait to start; don't start without a clear business plan; double your budget; content is king - go for quality and quantity. But as the Web approaches its next wave, new­comer should consider looking West for the wisdom that comes with experience."[1]

"Show me your business card and I will tell you if you are ready to compete in the markets of tomorrow!"

This statement does not come from a fortune-teller but from the CEO of a vivid company located in Campbell, CA. It's whether the e-mail and WWW address are printed on a business card that tells Roy Worthington, CEO of Octave Corp., if a company is keeping up with the technical and structural requirements of the economy of the future.

He sees e-mail and the WWW as important technical tools that can help to increase a company's ability to successfully communicate with its target groups. And he sees communication as the key ability that helps companies to learn fastly in a fastly changing, complex environment. And with this assessment he corresponds with Peter Senge[2] who says: "In the long run, the only sustainable source of competitive advantage is your organization's ability to learn faster than its competition."

Studying in Germany in "Ruhr York," the metropolis of Europe's industrial revolution of the last century, we came to the Silicon Valley, the center of today's worldwide revolution in communi­cation technology. We wanted to learn what it means to live with and within a community playing an important role in creating the technology and infrastructure for the economy of the 21st century. We wanted to see how companies are using the new information technologies to strengthen their ability to communicate, to collaborate and to learn.

As we are not studying Computer Science or Information Technology but Business Admini­stration and Economics we can not create software to run computers but we can do research about the "software" necessary to use the new technologies to run businesses more success­fully.

During our stay in San Jose we automatically got involved in the Internet community. We learned quickly about innovative companies using the WWW and e-mail as main communi­cation channels. We also learned that many companies had made their decision to go online haphazardly. Instead of developing a strategy they published their Web sites too quickly to take some of the basic factors into account necessary to guarantee the success of this marketing investment.

Vince Emery, author of How to Grow Your Business on The Internet found a more conspicuous description for this phenomenon: "Business and the Inter­net are like teenagers and sex. Everyone's obsessed with it. Everyone thinks everyone else does it. Everyone wants everyone else think they do it, too. But hardly anyone really does it, and most of them do it badly."[3]

A survey of the Phillips-University in Marburg, Germany shows that this pattern is not only typically American. Among 50 asked German companies[4] only eleven said that they connect their Web activities with a special strategy. If they consider hiring external consultants they are not looking for the help of communication professionals but they are searching for support in the operative field (e.g. choose the right software or the right service provider) or in producing the HTML-documents[5].

But not to connect the WWW activities with the overall business strategy could make them expensive and ineffective investments instead of thoughtful steps towards earning entre­preneurial profit rates. Like every other investment the WWW activities have to bring measurable benefits to a company. Running a company means following the economic principle of getting the most out of a fix resource or reaching a desired result by using the least amount of resources.

As the WWW is a hype, many companies feel urged to go online because they see the WWW as their track to the future. It seems that every­body goes online but not nearly every company knows why they are online and how effi­cient this online presence is. Following the economic principle means considering the effec­tiveness of every action taken. It means setting goals, striving them, reaching them and learning to reach them more effectively through evaluating the business processes and improving both goals and strategy constantly. Obviously a key ability of this process is to know how to evaluate business activities, how to measure their success.

After studying the state of the art publications about measuring the effectiveness of WWW marketing we found out that this field is suffering from the same disease than the WWW ac­tivities in total: the people making concepts for the WWW evaluation do not connect their - often highly sophisticated technical - models with integral marketing or business strategies. The outcome of most of the current measurement concepts are long lists of measures, figures over figures, quantities of quantitative information but hardly any statements about the quality of the WWW activities and little information that could be helpful to improve the WWW mar­keting or that could be useful for the marketing in general.

This experience lead us to the con­clusion that the WWW still seems to be a pretty unexplored field for many marketers, and marketing seems to be a pretty strange world for many technical oriented people used to deal only with programming, screen design or hardware problems but not with all fields in the combination necessary to develop and live a successful, integral marketing strategy.

Taking this current reality into account, we decided to write a thesis that provides useful infor­mation for both the marketers and the people coming from the more technical side of the WWW and that have to work together with the marketers in order to get the most out of the possibilities of WWW marketing.

This thesis should provide basic information about state-of-the-art in WWW measurement, marketing concepts, and opportunities the WWW offers as a communication medium.

Through presenting two real life sample cases, this thesis should help to develop a feeling for the dimensions of successful WWW marketing strategies. Our goal is to show that successful WWW marketing needs to be based on a integral marketing and business strategy. We are convinced that this integral WWW marketing strategy could be developed best by a cross-functional project team with specialists from both: the communication side and the technical field.[6]

2 WWW Marketing and Efficiency Measurement

"If you have clear marketing goals, you are halfway to identifying what you need to know. But goal setting is easier when you already know how you are doing. Once you know where the opportunities are, what your performance is in pursuing those opportunities, and why you are achieving what you are achieving, you can set realistic goals."[7]


"You are interested in the Internet and think your company should do some advertisement on the WWW. You convinced management to fund a Web site for your company and became the Web master. You set it all up and stocked it with interesting information, snazzy images, and interactive forms. People are using it and site traffic is rising. Then one day a manager walks in and asks, 'How is the Web site doing?' You quickly retort, 'We're up to 50,000 hits a day--5,000 more than last month!' He pauses, looks at you, and asks, 'That's great, but what does that mean to me?"[8]

When measuring the effectiveness of a company's Web site it is important to ask the right questions. Marketers might be interested if they reach their target group. They want to know what information on the Web site was mostly accessed and by whom. They want detailed information about the demographics of the visitors. The need to evaluate if they reach their WWW marketing goal and they need to calculate if the WWW marketing is cost effective.

Together with security and privacy issues these questions are perceived "the killer questions"[9] for marketing on the WWW. Within the last year measuring the effectiveness of a Web site rose to one of the biggest issues regarding the WWW.

This chapter shows some of the basic concepts of WWW-measurement and discusses what is measured, how it is done, and what are the advantages and disadvantages of these con­cepts. Some companies offering WWW measurement are introduced. The chapter ends with a summary and a conclusion of what is missing in most of today's WWW measurement con­cepts.

The Mechanics of WWW Measurement

The Internet is a network of computers and computer networks and because of these compo­nents it is based on binary data. With this background it is great dealing with numbers. These numbers can also be used to measure activities on the WWW. Every visitor, looking up a Web page, leaves some data (hits) on the server where the Web page is located. Servers collect this data and store it in their access logs. The data stored in the access logs can be used as a first source of information about the traffic caused by a Web page. Through analyzing the hit rates stored on the access logs several pieces of information about the visitors can be gained.

Whenever a visitor comes to a site and requests a document a record of the request is written into a log by the server. Most servers support the Common Log Format (CLF), and many sup­port their own extended log formats. The CLF was derived from an early version of the NCSA Web server, which kept only simple request information. The format was not designed with in-depth site analysis in mind and thus lacks much of the information that is desirable from a Web site-management perspective. In fact, the CLF only contains:

- the visitor's host name
- date and time of the request
- the http request to the server (which contains the URL)
- a return code for the request
- the number of bytes returned.

While extended log formats record more useful information, there is no standard format for them. Most extended log formats are home-grown and unique to each site. In general, they include:

- the name of the browser the visitor is using
- possibly a referrer field to indicate which Web page referred the visitor to the site. Web server logs use host names or IP addresses (Internet Protocol) to tell where users are coming from. The IP address refers to the computer the user is on, not the Web page that had a link to a site.

For example, a log record might look like the one shown below: - [26/July/1996: 18:00:00] get /directory/file.html - [26/July/1996: 18:01:00] get /directory/file.number2.html - [26/July/1996: 18:02:00] get /directory/file.html

Here an Internet visitor from the site "" visited the server on July 26th at 18:00. That individual started a certain file (/directory/file.html), then clicked on another page to retrieve a second file (/directory/file.number2.html). A second visitor arrived another minute later. These logs can be treated much the way consumer goods manufacturers and others treat retail scanner data. Reports and statistical analyses can be formulated which focus who accessed the pages, what pages were accessed and in what sequences, and when the pages are visited. It is also possible to randomly change the format seen by any one visitor thus allowing for experimental research on optimal page design.[10]

Technical Limitations of WWW Measurement

At first glance, looking at the host names and IP addresses may appear to be a safe indicator of who the users are or where they are located. But, in fact, there are some limitations in the technology of the rapidly growing Internet, that limit the value of these information:

1. Big domains
2. Multi-file pages
3. Proxy servers
4. Shared computers
5. Dynamic IP-addresses
6. Cache servers
7. Search engines/ Agents

1. Big Domains

If a marketer wants to know some more about the demographics of its Web site visitors, the domain name might be distortions. If there is a hit from the domain this could lead to the assumption that the visitor comes from Witten/Herdecke University in Germany. If there is a hit from it is already more difficult. The domain is National University, but is the visitor located in San Diego or in one of the regional learning centers? And what if there are hits from, or These are domains with users all over the world. These users can be located all over the United States or all over the world, but as far as your Web server is concerned, they come from, or

2. Multi-file Pages

A hit is counted every time the client requested a file from the server. If a user requests one Web page which contains the one basic text, two big pictures, five thumbnail graphics and two banner ads, the server counts 10 hits, although the visitor only looks at one Web page. This number is also misleading.

"If a single site is made up of 50 files that are accessed by 1,000 visitors 10 times each, that counts for 500,000 hits - the same as a site made up of a single file accessed by 500,000 visitors once."[11]

3. Proxy Servers

A proxy server is located between a smaller network and the Internet. One of the primary functions of a proxy server is to act as a trusted go-between from inside a security firewall to the outside network. So every request from computers on the smaller network to the "Outside World" are linked to the proxy server who hands the request further on. The proxy server then retrieves the data and returns it to the computer that made the original request inside the firewall.

When a proxy server is used to make a request, the Web server logs the host name of the proxy server, not the name of the original host. In large companies, hundreds of computers may make requests to a Web site via a single proxy, but only the host name of the proxy server will appear in the log file. Thus, a Web site can have an artificially low count on the number of machines that are being used to connect to it.

4. Shared Computers

Another problem with host-name data is that in larger institutions in which machines are not devoted to individual users multiple visitors to one Web site can come under the label of one host although they may be interested in completely different things. These problems generally are of concern only if a company is interested in user location demographics.

5. Dynamic IP-Addresses

In addition to not knowing how many computers are being used to connect to a Web site (computers behind a proxy server) , there is also no way of knowing how many users are coming in from each identifiable computer (different users sharing a computer).

This situation is made even worse by dynamic Internet Protocol (IP) addressing – a means of spreading a large user demand for IP addresses across few machines. Typically, this af­fects dial-up users and means that one day an individual user may come from and the next day from

6. Cache Servers

While the population on the Internet grew faster than the technical equipment, especially the bandwidth, bottlenecks for Web traffic came up. The access speed started slowing down significantly.

Some ISP's (Internet Service Provider) have to pay connection fees proportional to the Web traffic generated by the computers within their network. They are interested in keeping the outside traffic small.

One solution for these two problems is caching frequently requested Web sites locally on special computers.

As a proxy server a cache server is located between a smaller network and the Internet. So all requests from computers on the smaller network to the "Outside World" are linked to the cache server. First the server checks if the requested Web site is already stored locally. If not it hands the request further on to the outside server that carries the requested page. If the requested Web site is stored locally it returns this local copy. To optimize the usage of the cache memory the cache server runs statistics with the mostly requested pages, down­loads them regularly and stores them locally. Some of the largest cache servers in the In­ternet are located between the big Online Services like America Online, CompuServe and Prodigy and the Internet. But also small ISP's like the Service provider we use in Germany ( works with caches to decrease outside Web traffic and increase access speed.

7. Search Engines/ Agents

Search engines and news agents store information about the content of Web sites. There­fore they use robots (special software) that scan the WWW permanently or frequently to recognize which new pages appear or which pages has been modified. If a server gets a hit from such a robot, it is counted as a human visitor but it isn't one. For example in early 1996 a lot of domain owners (somebody who runs a Web site) registered a huge amount of hits from the domain "," which is owned by the US-company Digital.

But this doesn't mean that almost every employee from Digital visited these Web site. In fact, this was the time when AltaVista, one of today's most powerful search engines in the WWW, was launched and built up its database. AltaVista's database contains information about the content of more than 30,000,000 Web pages (August 1996) and updates this in­formation frequently. AltaVista is located on Digital's Web server under "" and every time one of its robots updates a content information for AltaVista's database the domain owner gets a hit from Digital's domain "" But these aren't human beings looking for information but electronic robots checking if something had changed since their last visit.

Performance Limitations of WWW Measurement

Beside some effects caused by the technical limitations that influence the correctness of the measured hit rates Web tracking has some implications on the server performance and the usage of hard disk space:

1. Performance Issues

Web tracking technology clearly affects server performance. Monitoring traffic on the site requires information to be stored in a log file. The very act of recording this data decreases the performance of the server (at a minimum, each time a page is viewed, an entry is placed in the log for each file that is retrieved). In addition, the more complex the analysis scheme, the more comprehensive the information is that has to be recorded, the more de­grades the server performance.

2. Storage Issues

As stated above, Web auditing requires site traffic data to be recorded in log files. These logs frequently require a significant amount of storage. For instance, the log files of high-traffic sites easily add up to more than 100 Megabytes a day.

Conceptual Limitations of WWW Measurement

A more fundamental question is: Does the measurement of hits provide the information mar­keters need and want?

For the following reasons the answer is: No.

Hits are a count of activity at a site, and one person typically performs many activities. So hits can be hundreds of times higher than people visited.

Hits also provide only limited information about the user behind the data. They give only few information about the user, for example the domain he or she comes from (e.g. de=Germany, es=Spain, edu=USA educational institutions). Hit streams comes to its limits if more infor­mation should be gathered, e.g. why did a visitor stop at a Web site, how did he or she like it, did the visitor find the information he or she was looking for?

Sometimes experience-based judgments are used: A newbie (somebody new using the Internet) is more likely to visit the most popular sites, not using search engines, just looking around or entertaining. On the other hand a experienced user is more likely to search for concrete information, uses heavily search engines, is not interested in the popularity of a Web site and more willing to buy. But finally for rating the hits a Web marketer wants and needs to know whether the visitors are newbies or experienced users. These data are not available via hit counts.

"Understanding how various groups navigate the Net and how their behavior may change in the future is crucial for those who hope to use the network as a delivery medium for products, information, and services."[12]

Looking at all these different limitations the sense of measuring Web traffic is doubtful. "Web experts say it is a crude way to measure traffic, almost to the point of being useless."[13]

How to Overcome these Limitations

As the information generated by using only the technical measurement methods is very limited, there are some suggestions how to improve the quality of Web evaluation:

1. Counting Pages
2. Page Grouping
3. Educated guessing
4. Session ID
5. Third-Party Rating Systems

1. Counting Pages

One simple improvement to the audit process is to use pages as the base metric rather than hits. This overcomes the problem of graphics-heavy pages exaggerating the perceived popularity of the site. Page tracking, however, still does not directly capture the more valuable measurement - the number of visitors to a site.

2. Page Grouping

Today's monitoring technology can also group categories of URL's together, such as product information, company information or pricing, to create a picture of the most fre­quently traveled areas on the Web site.

3. Educated Guessing

To evaluate a Web site it is necessary to know which pages attract a user, where he or she moves next, which pages are visited in which order, how long did he or she stay at the site, or which links are effective and which aren't.

The challenge for the Web tracking technology is to process the raw data recorded and translate it into digestible information. Today some heuristics are used to make educated guesses about user sessions. Such a heuristic might be to look at all document requests from the same host name. If the re­quests occur within short intervals of one another, the user is probably moving around the site. When a request from a particular host name has not be received in some threshold amount of time (e.g. 15 minutes), the assumption could be made that the user had left the site. These heuristics also can use the browser information or referrer information to try to more accurately determine sessions.

Like any other heuristic, session-analysis algorithms can be conservative or speculative. For example, a speculative heuristic may be to count every log-file entry from well-known proxies or service providers (like,, as 50, as 500, or even as 5,000 users. These estimates may be closer to the mark than considering requests from such host names as just one user, but can overestimate the real number of sessions, creating "false users." On the other hand, a conservative approach could ignore the proxy or cache problem and group all requests from hosts into the same session. This method clearly underestimates the number of unique sessions from the host.

The most important fact to keep in mind when using a tool to perform session analysis is that there is no "right" heuristic. All the algorithms are attempts that provide a reasonable baseline that can be used to estimate the number of users on a site. Session analysis is much more useful for trending purposes (How has the number of the users changed over the past month?) while keeping estimations constant than for pinpointing an exact number of users.

4. Session ID

One vehicle for determining the number of site visitors is the use of unique session identi­fiers. Each time a user begins browsing a Web site, he or she is given a session ID that allows the site administrator to determine what parts of the site are being visited, how frequently the site is being traversed, etc. This audit technology can also involve the as­signment of personal ID's and passwords, which will allow people to extract demographic data and correlate this information with site usage patterns. But this relatively new approach still has some problems. "Even the more advanced analysis tools have problems. For in­stance, in certain situations the system might inaccurately register the same user as a dif­ferent person during a particular visit."[14]

5. Third-Party Rating Systems

In addition to collecting Web information, companies are trying to establish recognized ratings systems (comparable to the A.C. Nielsen rating system for TV) that provide precise traffic information for Web site creators and advertisers.

Who is Offering WWW Measurement Tools?

Despite the impediments to collecting and analyzing Web site usage data, there are an in­creasing number of analysis tools and services available on the market. These products can directly extract or interpret log-file data into several key categories. Commonly available data includes

- hits rates for each page by month, day or hour
- breakdowns of requests based on domain, host name or IP address (sorted by number of requests or amount of traffic)
- server load and performance statistics by directories or files (sorted by number of requests or amount of traffic)
- average time each page is looked at
- paths that visitors take through your site
- URL's from which users came
- correlation between these data categories.

For doing a log file analysis there are two different options: using an off-site or on-site method. Both methods have their benefits and drawbacks.

The off-site analysis option, provided by companies like I/Pro, NetCount, and WebTrack, helps to save time and system resources. It eliminates the task of having to maintain a database on site with large disk space consumption. Off-site analysis also provides a measure of platform independence because the generated log files are text files, which can be sent to any off-site platform for processing.

The on-site analysis software solution from e.g. Interse, net.Genesis, and OpenMarket makes the analysis of your Web site available locally and on demand. The on-site solution provides customized reports, a higher level of interactivity; you can generate reports as often as you like. On-site analysis software must be available on a platform you use for your Web server, but you can create as many reports as you need as frequently as you want at no extra cost.

One of the most popular arguments for off-site measurement is the following:

Almost any company can keep track of the number of visits to its Web home page. But com­panies with multiple hypertext links advertisements that function as virtual "doorways" between the site where the ad is placed and the company's home page have had no way of knowing which links are bringing in the most visitors and which aren't performing as well. Conversely, there has been no widely accepted means by which the creator of a popular Web site could persuade potential sponsors that it's worthwhile to establish a link on his site. Therefore an independent rating agency is necessary, which tracks the numbers for the owner of the page, where the banner ad is placed as well as for the advertiser."[15]

From the advertiser's perspective, a ratings system may bring some coherence into the setting of advertising rates and offer some reliable way to decide on placements. "Some sites right now are charging like $8,000 a week for those little strips that go on the top of the page; cur­rently there is no reporting method, no way for those advertisers to know how well their links are performing,[...] they can say, 'Oh, look, this site has this amount of traffic, and that site has almost no traffic; I'm not going to put my link on that site, I'll put it on this site."[16]

Off-Site WWW Measurement Solutions

Some of the most important companies offering off-site Web measuring solutions and their products are introduced in the next part:

1. Internet Profile Corp., I/Pro, San Francisco, CA
2. Digital Planet/NetCount, Los Angeles, CA
3. Web Track, New York, NY
4. Virtual Office/Web Watch


Abbildung in dieser Leseprobe nicht enthalten

(Source: Company statistics)

1. Internet Profile Corp. I/Pro (

The startup company Internet Profiles Corp. (I/Pro) evolved to an early market leader in the market for WWW-measurement. In early 1996 they signed a contract for a strategic alliance with the market leader in third-party-rating for conventional media Nielsen Media Research. At the moment I/Pro offers three products[18]:

I/COUNT: monitors Web site usage, delivering such elemental data as number and fre­quency of visits per time of the day or day of the week, most accessed files, section read within each site, and basic data about users’ geographic location and system configuration.

I/AUDIT: This product takes the process one step further than I/COUNT. After delivering some more data to I/Pro, the customers get back monthly or quarterly reports detailing their audience’s composition.

I/CODE: This is the newest product of I/Pro. It recognizes the problems with pure hit counting and adds an non-technical component. Before logging on a I/CODE-compatible Web site every user has to enter a user name and a password, and thereafter, I/CODE will be able to track every move that user makes, every page he or she logs onto, maybe even how many minutes he spends browsing. And if the user can be convinced, just once, to fill out a questionnaire providing basic personal data - i.e. sex, age, religion, marital status, in­come level - then I/Pro will be able to provide detailed demographic information about Web visits and buys

The clients of I/Pro include Chrysler Corp., Microsoft Inc., and Time Warner Inc.

2. Digital Planet/ NetCount (

To provide services for tracking consumer usage of the WWW, Digital Planet Corporation has established NetCount. Through the NetCount service, Web site creators and advertisers will to obtain precise traffic information, broken down by Web site, subject, page, day and hour.

NetCount will address the needs of both groups "By having the ratings, the sites have reli­able information they can pass along to sponsors who want to place paid links on their sites," he explains. "Imagine 10,000 or 20,000 Web sites out there that have great content but no revenue stream; now they're eligible for advertising, because there is comparable data that can be looked at across the board."[19]

The Los Angeles based company therefore offers the free-of-charge service "Basic" to at­tract its customers. The Plus product enhances the analysis opportunities.

3. Web Track (

Web Track's products give online marketers access to competitive intelligence and ad placement data through its newsletters and online databases. Its services are designed to help marketers keep up with changes, new sites and trends in Web publishing and advertising.

Web Tracks James Kennedy said, "However, measurement of the size and demographic makeup of the Web audience is an imprecise science. There is considerable uncertainty about how many people even have access to the Web. [...] During the coming months, ad­vertisers, publishers, and research firms will be comparing their methods and attempting to reach a consensus about what accurately can be reported about the behavior of the Internet audience."[20]

4. Virtual Office (

Virtual Office, Inc. has developed WebWatch, a suite of Internet products that analyzes visitors' tours through the site. WebWatch provides a number of metrics including how many visits the entire site received, how much time visitors spent on both the site and the individual pages, and how many times visitors responded to a specific advertisement or link.[21]

On-Site WWW Measurement Solutions

But not everybody seems to be happy with the offerings of the off-site measurers and the alli­ances between these companies and the established third-party-rating-agencies.

"Meanwhile a significant number of Web companies, including Organic Online (developer of Web sites for Levi's, Toyota, Advertising Age, etc.), remain convinced that they can do a better job of tracking Web site traffic than an outside measurement company."[22]

The on-site analysis software runs on the domain owner's system and can be used to analyze the log files as often as the user needs. The next table shows three on-site measurement com­panies and their products:

Abbildung in dieser Leseprobe nicht enthalten

What is WWW Measurement Good For?

To find an answer on this question it is necessary to look at the underlying marketing concepts of WWW measurement. Today there are different approaches how to leverage the WWW for marketing.

These different approaches also influence the tendencies into which directions WWW measurement is developing.

The Broadcasting Approach

The driving force behind all the different measurement trials described before is mainly the idea of using the WWW for advertising purposes. To evaluate how many users an advertiser can reach with a banner ad (small advertisements on other, mostly high-traffic Web sites) and how much value this banner ad creates. It is necessary to know how many surfers exactly visited the hosting Web site, how many of them recognized the ad on it and how many even followed the invita­tion to visit the advertised Web site. As a consequence of this thinking it is tried often to adapt the tools and institutions of classical print and mass media advertisement also for the WWW.

For example, current discussions are driven by questions such as:

- Is traffic created by a Web site the appropriate measure for its effectiveness?
- What are the appropriate methods to determine how much should a site owner charge for a banner ad on its Web site (and way around how much should an advertiser pay for this)?
- Does the WWW needs an independent third-party-rating system?
- Is there a one-fits-all solution for WWW measurement necessary and useful?
- Is CPM (Cost Per Impression) or CPR (Cost Per Response) the best base to determine the cost of a banner ad?

A hot discussion is going on about what measure allows a better evaluation of the costs for banner ads: CPM or CPR. The measure CPM shows how much money an ad costs per each thousand of people glancing longer or shorter at the ad while visiting a Web site. This is an advertising-orientated approach which implicitly assumes that the site’s only job is to deliver people to the ad. The underlying goal is to design an ad that attracts the surfers interest as long as possible, leaving a lasting impression even if seen momentarily.

CPR is a direct-marketing approach that measures how much an ad costs rela­tive to the number of people who click on the banner. It implicitly assumes that the site itself influences the rate of response to the banners. This system also assumes that the advertising message has only value for those clicking through and investigating it.

"The best way to uncover the impact of Internet advertising is to complement the electronic tracking of input (number of visitors, click trough rates, lengths of visit, etc.) with the systematic measurement of site output (the ideas and attitudes people take away from seeing a message and visiting a site). These output measurements document the advertising impact of an Internet banner or site and should be used along with direct response measures (sales, information requests, etc.) to gather a full picture of the advertisement's quality as a marketing communications effort."[23]

Debra Williamson suggests to work with the CPM. A reduction to the CPR would devalue the hosting Web site and would make the surrounding content worth­less. She further suggests to work with the advertiser to determine what the advertisers goals are and what type of response the advertiser would like to measure: impressions, click troughs, leads (prospective customers), or even sales created by the ad.[24]

To underline the trend to focus WWW measurement on the amount of hits, reached customers and delivered impressions the Palo Alto based company Web 21 ( started ranking weekly the most popular Web sites based on page hits. One idea of this ranking is that the Web site with the most hits allows also the highest prices for banner ads. To cope with the technical difficulties mentioned above Web 21 uses a more sophisticated measurement technique. Its rankings are based on data obtained from server log files, traffic samples at key points of the Internet, and Interviews with Webmasters. Its data represent the surfing patterns of 30,000 Web users worldwide.

The Webs most popular Web sites in mid June, 1996 (based on page hits) were:[25]

1. Netscape
2. Yahoo and Yahooligans
3. Microsoft and MSN
4. America Online, GNN and Webcrawler
5. PointCast Network
6. Lycos and Point
7. Digital Equipment Corp. and AltaVista
8. InfoSeek
9. Starwave Sites (ESPNet, NBA,, Showbiz)
10. Time Warner sites (incl. Pathfinder, Warner Bros., HBO, DC Comics, etc.)

According to a study of WebTrack[26] it becomes clearly that the sites with the highest traffic are the biggest player in ad space selling. The following table shows the Web advertising revenues for the fourth quarter of 1995. These ten sites locked up 75% of total Web advertising reve­nues.

1. Netscape $ 1,766,000
2. Lycos $ 1,296,000
3. InfoSeek $ 1,215,000
4. Yahoo $ 1,086,000
5. Pathfinder $ 810,000
6. HotWired $ 720,000
7. WebCrawler $ 660,000
8. ESPNET $ 600,000
9. GNN $ 594,000
10. C/NET $ 540,000

In evaluating the success of an Web advertising campaign, marketers should think beyond CPMs. For the foreseeable future, Internet-based advertising simply will not be able to com­pete with mass media on the basis of reach and efficiency alone. The real value of the Internet lies in the quality of each contact with customers - the ability to engage people in dialog and to provide targeted, relevant information and messages on demand. This dialog with customers may not always result in immediate online sales, but it should be more effective than conven­tional media in influencing people.[27]

The Narrowcasting Approach

However, some marketers eschew the whole idea of counting users. Allyson Smith of Next Century Media said CPM (Cost per Impression) measurements were not appropriate and made the Web seem expensive. She believes Web marketers should develop relationships with customers and cultivate them over a long period of time using e-mail and other interactive techniques unique to the Internet.[28]

The whole discussion about hits, click streams, CPM vs. CPR ignores that success in the WWW is gauged in many ways. Right is that one of the most popular indica­tors today is the number of "hits" or visits made by Internet cruisers to a particular site. But marketing goals might differ in a much broader way. Marketing in the WWW is a way to generate sales as well as traffic. Other goals are realizing things in the WWW better than it is possible in the conventional way. (.".. the investments for this high tech catalogs are small compared with that of a new paper catalog."[29] )

"Mr. Bendremer (the co-founder of Downtown Anywhere) is uncomfortable with the "4,000 hits per hour" figure often cited regarding visits to his mall. Refreshingly honest, he does not feel that raw numbers are particularly valuable. "What counts more is being able to interpret the statistics – seeing what has been looked at, if not bought," he says."[30]


[1] Stuart, Anne, "Lessons of the Valley,"WebMaster, March-April 1996, pp. 55-59

[2] Senge, Peter M., The Fifth Discipline, New York 1990

Peter Senge is founder and director of the Center for Organizational Learning at MIT's Sloan School of Manage­ment, and a founding partner of Innovation Associates in Framingham, Massachusetts, and Toronto, Canada. (

[3] Emery, Vince, "12 Reasons Internet Projects Fail,"Potentials in Marketing, August 1995, pages 14-17

[4] see Handke, Christian, PR Magazin, September 1996, page 12-16

[5] Hypertext Markup Language (HTML) is the programming language used to write WWW documents.

[6] And if you are interested in how such cross-functional project teams master difficulties in their teamwork we can recommend another thesis of us written in German and soon available as unpublished file.

[7] Hester, Edward L., "Successful marketing research: know your market and your competition,"Potentials in Marketing, April 1996, pp. 10-12

[8] see Robertson, Niel, "WEB WATCH - Stalking the Elusive Usage Data,"Internet World, April 1996

[9] Similar to the term "killer application" for an application that brings the breakthrough for a new technology, "killer question" means here a question that has to be answered to bring the breakthrough for marketing on the WWW.

[10] Hofacker, Charles F., "The new world of marketing on the Internet" in: Forrest, Edward, Mizerski, Richard (ed.) Interactive Marketing: the future present, NTC Business Books, Chicago Ill., 1996, pp. 189-196

[11] Wagner, Mitch, "There's a new traffic cop on the beat,"Computerworld, February 12, 1996, p. 57

[12] Miller, Thomas E., "Segmenting the Internet,"American Demographics, July, 1996, pp. 48-52

[13] Wagner, Mitch, "There's a new traffic cop on the beat,"Computerworld, February 12, 1996, p. 57

[14] Massotto, Tom, "Understanding the Effectiveness of Your WWW Site: Measurement Methods and Technology," Marketing Effectiveness White Paper, December 1995, found at

[15] see Montague, Claudia, "Counting on the Web,"American Demographics, July/August, 1995

[16] Montague, Claudia, "Counting on the Web,"American Demographics, July/August, 1995

[17] Marx, Wendy, "Light years ahead' but still confusing,"Advertising Age, February 26, 1996, p. 38

[18] Krantz, Michael, "Web Feat: Site Auditing,"Mediaweek, September 11, 1995, p. 23

[19] Montague, Claudia, "Counting on the Web,"American Demographics, July/August, 1995

[20] Welz, Gary, "The ad game,"Internet World, July 1996, pp. 51-57

[21] Masotto, Tom, "Understanding the Effectiveness Your WWW Site: Measurement Methods and Technology," Marketing Effectiveness White Paper, December 1995, found at

[22] Marx, Wendy, "Light years ahead' but still confusing,"Advertising Age, February 26, 1996, p. 38

[23] Young, Scott, "Taking measures,"Internet World, July 1996, pp. 86-87

[24] Williamson, Debra Aho, "Web ad model taps flexible pricing system,"Advertising Age, May 27, 1996, p. 26

[25] Williamson, Debra Aho, "Web 21 ranks sites based on traffic,"Advertising Age, June 24, 1996, p. 36

[26] see n.n., "The Ad Space Race,"Webmaster, March-April 1996, p. 12

[27] Young, Scott, "Taking measures,"Internet World, July 1996, pp.86-87

[28] Welz, Gary, "The ad game,"Internet World, July 1996, pp. 51-57

[29] Fried-Cassoria, Albert, "Successful Marketing on the Internet: A User’s Guide,"Direct Marketing, March 1995, pp. 39-42

[30] Fried-Cassoria, Albert, "Successful Marketing on the Internet: A User’s Guide,"Direct Marketing, March 1995, pp.39-42

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Dr. Uwe Trillitzsch (Author)Simone Schweikert (Author), 1997, Towards Integral World Wide Web Marketing Strategies. Creating Points of Communication that Count, Munich, GRIN Verlag,


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