The issue of internet advertising effectiveness is part of the broader question about the effectiveness of advertising in general. As a result, internet advertising effectiveness should be examined in a similar fashion as traditional advertising.

However, internet advertising is different from traditional advertising in that the internet has capacities to extend the function of advertising far beyond what traditional media are able to accomplish. Consumers can click on a banner ad for an e-book, check the table of contents or review others’ comments, place an order, and download the e-book to their computers, all through the internet. None of traditional advertising media could offer such a combined channel capacity of communication, transaction and distribution.

The expanded function of internet advertising comes from its horizontal integration of three key marketing channel capacities (communication, transaction and distribution) and vertical integration of marketing communications, including advertising, public relations, sales promotion and direct marketing. In order to better understand the effectiveness of internet advertising, therefore, we must examine unique characteristics of the internet advertising formats and develop new criteria by which the effectiveness of internet advertising can be assessed.

The internet provides the means for “interaction” between buyers and sellers to such a degree that some have suggested this is the defining characteristic of the internet. This interaction can be human-machine, machine-machine and human message; among others.

Interactive Communication refers to human-message interaction where the user relates to and, in some cases, modifies the message with which he/she is interacting. Clicking on banner ad represents a low level of interaction of this nature while choosing an ending among many for an online movie represents a higher level of interactive communication with a message.

Interactive Media on the other hand, refers to a carrier of messages which provides for the possibility of interaction with messages conveyed in that medium. So, the internet including the Web is an interactive medium which provides for the possibility of interactive communication with messages. However, the internet is of many interactive media. Mobile phones and interactive kiosk are also interactive media.

However, the convergence which is rapidly taking place between notebook computers, personal digital assistants, mobile phones, and cable television make such distinctions less clear. While it may be the case that any discussion of advertising effectiveness in general will apply to the internet, it may also be the case that any departures from general understanding of advertising effectiveness issues may be due to the special characteristics of interactivity associated with the internet. In particular, there has been a special interest in delineating advertiser-controlled versus consumer-controlled aspects of the internet stemming from interaction issues.