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Why The Click-Through Rate Is Dead

The click-through made its debut in 1993 along with the first banner ad sold by GNN (Global Network Navigator) -- to a Silicon Valley law firm. Since then, digital advertising has evolved from basic image banner ads to rich media to highly interactive video ads and recently to ad content tailored for users of mobile touchscreen devices mixed in with social media features. Users are now engaging with the ads in so many different ways that the click has become antiquated and largely irrelevant as a primary measurement metric of ad performance.

Quite simply, clicking or not clicking on an ad does not accurately indicate a consumer's interest in the product being advertised. In fact, research shows that many clicks result from users actually trying to stop an ad from playing, or to move ahead to the content they intended to consume. In addition, clicks only offer a vague -- and somewhat misleading -- measurement of user interest. They reveal nothing about a user's intent or what was done post-click. And the action of clicking is outdated, too: With mobile touchscreen devices like the iPad and iPhone, there is no mouse to click.

Internet advertising has traditionally been focused on demand generation or lead generation, where a click-through from an ad would take the user to a "landing page" where they would fill out a form if they were interested in the product or service being advertised. An improvement on this was search marketing, where a user who was actually looking for or researching a product was presented with a relevant clickable text ad that again would lead to a form to be filled out. Certainly, the click-through rate has been useful in evaluating the success of online search and banner advertising, and this is where the click was born.

But with the advent of video ads and social media, brand marketers are now viewing the Internet not only as a demand-generation medium, but also as a way to generate awareness and engagement and drive purchase intent. Online video and social media, especially with mobile devices mixed in, provide very compelling ways for brand marketers to develop awareness and engage audiences in a more meaningful and engaging dialogue.

Video has always been an essential tool for growing brand awareness and getting people to relate emotionally to a brand. Meanwhile, social media are engagement -- people share what they think or feel about a brand with others (including the brand). It is not an understatement that social media are the biggest things to happen to brands online. And as more brands engage in the social sphere and create interactive elements of their branded ad campaign, click-through rates are becoming significantly less meaningful as measurement tools.

However, despite the evidence that the click-through is dead, online advertisers remain obsessed with measuring clicks. Letting go of the click-through is even more challenging for advertisers because no defined measurement standards for online advertising exist yet.

The Internet Ad Bureau is a key steward of standards and is encouraging innovative ways of thinking on this issue. Its efforts are to be applauded, but the industry also must come together to determine how to measure online advertising in a consistent, meaningful way. No one has taken leadership yet -- and whoever does is likely to face criticism that the suggested solution isn't in everyone's best interest. So instead, the industry keeps falling back to what the industry initially agreed on -- the click-through rate, which quite simply does not reflect how users are really engaging online.

It's becoming increasingly clear that metrics that are more applicable to user engagement, but also familiar and well-known, are a much more valuable tool for measurement than clicks. Take the purchase funnel, for example. All marketers use this model to understand how their message is being heard and acted upon by consumers. While you can argue about how to measure, everyone can agree that measuring purchase intent can be universal, depending on a campaign's objective.

If "measureable" means "clickable," then online advertising has overpromised and under-delivered. With so many different ways for users to engage online and via mobile devices, it is imperative that the industry embrace change and redefine how measurement of online advertising is accomplished -- and present it to brand marketers in a way they will understand and that will allow them to compare results against those from other media. The result will be a far more accurate reading of how users are engaging with ad content online.

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1 comment about "Why The Click-Through Rate Is Dead ".
  1. Frank Guzzardo from free agent , December 15, 2010 at 9:46 a.m.

    Anyone looking to exit the stone age of click through metric should investigate companies like C3Metrics, Clear Saleing and Visual IQ who can provide unbiased accurate accounting of the media path that is driving the acquisition. I have no affiliation with any of these but having seen their solution and results feel obliged to pontificate on their behalf. Full funnel attribution has finally arrived as a viable metric that will change media mixes once embraced.