While online advertising has had a bad rap in recent months, Jupiter Media Metrix said that online branding abilities deliver a 25 to 35 percent higher return-on-investment than using standard direct marketing metrics.
However, the Internet research firm said that only 15 percent of online marketers are doing any formal branding measurement. Instead they prefer direct response metrics like click rate and cost per conversion.
As companies curtail spending in the wake of the dot-com shakeout and growing economic uncertainty, advertisers are demanding more bang for their ad dollars and proof they are working.
The greatest obstacle in developing online branding practices isn't the Internet's brand-building abilities, but the marketing culture, the research firm said.
Jupiter's AdRelevance unit also found that online "skyscraper" advertisements are gaining in popularity and acceptance across a range of Web sites.
The skyscraper ads were introduced earlier this year as an alternative to the traditional banner ads that topped most Web sites and that have been deemed more and more ineffective as companies look for more return on their ad spending.
"Impressions have been picking up on skyscrapers than any of the other new units. It is the unit people are latching onto, partially because of their size and shape. They are easy to implement into a page and place in the margin instead of redesigning a page," said Marc Ryan, director of media research at Jupiter Media Metrix.
Meanwhile, Australian research outfit ACNielsen.consult has found that on average online advertising caused a 12 percent increase in intent to purchase, a 16 percent increase in unaided brand awareness, a 37 percent increase in ad recall, and statistically significant improvements in three out of nine brand image measurements.
"The results are pretty impressive -- for an advertising medium that's been beat up over the past six months as an advertising medium that doesn't work," Ramin Marzbani of ACNielsen.consult said.
"Of course, when people have complained that online advertising doesn't work, they have rarely had any research besides click rates to back up their assertions. Now we have some research to demonstrate the branding effectiveness of online advertising."
ZDNet staff contributed to this report.
