Click-Through Metrics Come Under Fire
While marketers continue to rely on click-through rates as a primary measure of campaign effectiveness, new research suggests that the metric should be taken with a grain of salt -- or completely taken out of the equation.
Indeed, 99% of stable cookies examined by ad network and technology provider Collective show no evidence of clicks. The finding is even more pronounced than an often-referenced comScore study, Natural Born Clickers, which revealed that only a small minority of Web users make up the majority of click activity online.
To conduct its research, Collective said it examined the ad interactions of more than 100 million anonymous user profiles, and over 1 billion ad impressions served in the first months of 2011. In addition, it reviewed the action lift of 100 campaigns, and brand lift reported in 400 campaigns.
"We integrated an enormous volume of impression, user and performance data in our 'super-computer' from early 2011," said Jeremy Stanley, vice president of analytics at Collective. "We then drilled down into this data to understand what fraction of users were clicking, what characterized those users, in what circumstances they tended to click."
What it found was that users who have clicked in the past are twice as likely to click again in the future, while nearly 20% of ads that received any click activity received multiple clicks within the same impression, suggesting that these clicks were unintentional.
This effect was seen especially among online gamers, who clicked 43% more often than non-gamers, and on mobile devices where users clicked 123% more often, according to Collective.
In addition, an examination of who usually clicked painted a picture of an audience that may not be attractive to most advertisers. Clickers tended to be lower-income, older and late technical neophytes.
Users with incomes under $40k click 30% more often than users with incomes over $200k, Collective found. Users with only 'fair' credit scores click 20% more often than users with 'excellent' credit scores.
What's more, users who are late adopters of new technologies clicked 50% more often than early adopters, while users who are economizing clicked 65% more often than users who purchase frequently online.
Many clicked ads did not materialize in terms of action or brand lift; Collective could not even find a discernible correlation between CTR and post-impression action.
Furthermore, the highest-performing CTR campaigns examined (top 20%) had a 150% higher CTR but an 8% lower post-impression action rate.
Similarly, a preliminary study of 100 campaigns showed no correlation between CTR and brand lift and purchase intent as measured by VIZU post-impression surveys. Collective suggests that optimization of campaigns to achieve higher CTR may, in fact, reduce brand ROI.
Stanley believes that marketers should stop using CTR to measure performance of their campaigns. "In fact, they should stop tracking CTR altogether," he stressed. "We believe that the CTR is not only a meaningless performance measure, but it can actually destroy value for brands if they optimize their campaigns to perform on CTR."