The Trouble With CTR As A Campaign Metric

I recently wrote an article discussing the trouble with legacy attribution models. I’d like to follow that up by talking about the trouble with the click-through rate (CTR) as a measurement of campaign success.

Now I know lots of folks in the industry are bashing the CTR right now, and it may seem like a trendy issue to some. But the truth is, the mere discussion of the CTR’s proper place in digital campaigns is a sign of health: a sign that our industry is growing more ambitious as to what it can achieve through digital advertising.

Why reevaluate the role of CTR now? Let’s begin by observing the expanding role of digital advertising in achieving marketing goals. As the Winterberry Group’s recent paper, Programmatic Everywhere, makes clear, programmatic marketing is moving beyond getting the consumer’s attention. It’s used for optimizing content, understanding who your audience is, gaining insight into media efficiency, and learning how to prompt prospects through the sales funnel.

For the record, my biggest beef is that the CTR stops at the getting-attention part, when, in fact, today’s marketers have the tools to bring their campaigns all the way across the finish line.

Before I launch into everything that’s wrong with the CTR, I’d like to point out the things that are arguably right with the metric. No one can deny the CTR is an excellent tool for valuing and attributing credit in search campaigns. Consumers who are in market for products and services will typically begin the purchasing process with a search-engine query, and clicks on paid-search ads can be trustworthy indications of intent and possible conversions.

Clicks are also useful in well-crafted retargeting campaigns. These campaigns seek to remind a consumer who has an existing affinity for your brand to come back and complete a purchase, and clicks plop them right back into the sales funnel.

And the CTR is quite useful in evaluating ad creatives. Let’s say you have two creatives for the same product, one featuring a mom, the other a puppy. How do you know which version attracts the most consumers? Count the clicks. If a particular creative gets a lot of them, then you know it’s a really good ad.

Clicks fall short when you want to measure specific behaviors or intent outside of the search channel. This year’s Budweiser Super Bowl ad featured a cute puppy, and it received 45 million hits on YouTube within the first week following the game. If we assume that clicks translate into intent, can we also assume the ad has turned millions of women into Bud drinkers?

Since the dawn of display advertising, we’ve assumed that clicks indicate an interest that may ultimately lead to a purchase, but clearly that’s not the case (especially since creative agencies have learned to make really compelling ads).

When it comes to growing your brand’s footprint, what really matters are all the actions consumers take towards converting, whether that’s downloading a coupon, clicking on a store locator, or liking a brand on Facebook. The click, like the ad itself, is just the first step; it says this consumer has seen your ad and liked it enough to click  -- nothing more. If you optimize your campaign on CTR, then you’re optimizing your campaign on a fairly meaningless metric.

Marketers should focus on activities that lead consumers through the brand awareness, first purchase, brand loyalty cycle. For some brands, consumers may be more likely to download a coupon before making an initial purchase; others may want to see what others are saying about before opening their wallets, and will like a brand on Facebook in order to tune into the conversation.

That’s why it’s so important for marketers to map out their consumer’s path-to-conversion, and optimize their campaigns for actions that support that path. In other words, what percentage of people saw your ad and downloaded a coupon? What percentage of auto-intenders watched your video ad signed up for a test drive with a local dealer? And how can you tweak those ads to drive higher rates?

Finally, CTR is a poor mechanism for evaluating media partners. If one of your partners is using a creative that’s the display equivalent of Bud’s Super Bowl ad, what will a high CTR tell you about that partner?

Swapping out CTR for other metrics takes a bit of work, and you’ll probably need to engage some data experts to help you do it. But history’s dustbin is littered with companies that failed to see the writing on the wall, and an over-reliance on CTR may prove to be fatal mistake.

Tags: rtb
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8 comments about "The Trouble With CTR As A Campaign Metric".
  1. Steve Plunkett from Rockfish , April 8, 2014 at 10:51 a.m.
    CTR is only one link in the chain... however for some A/B or multivariate testing models while not the end measurement, it is a crucial indicator.. when taken in context or during testing.
  2. Mike Einstein from the Brothers Einstein , April 8, 2014 at 10:54 a.m.
    I agree, any metric that defines statistical zero is most definitely a problem.
  3. Dan Ciccone from MEDIAFICIONADO , April 8, 2014 at 11:18 a.m.
    It is the publisher's job to bring you the right audience. It is the agency/client's job to provide creative that will motivate the target audience to click. Too much emphasis is put on the CTR without understanding why the audience is or is not clicking. More times than not, buyers place media without even knowing what the creative execution will be.
  4. Scott Pierce from A6 Corp. , April 8, 2014 at 2:11 p.m.
    Agree 100% that CTR cannot be used as a measurement of campaign success. Within exchange RTB-driven display advertising, the primary reason this metric is invalid is the preponderance of fraud. Clicks simply cannot be trusted.
  5. Mike Einstein from the Brothers Einstein , April 8, 2014 at 4:57 p.m.
    @Scott, Sounds more like a preponderance of stupidity to me. This industry is in a full-gallop retreat from the very metric that defined the Web's USP in the first place. But to your fraud point, what you've described is a Carrollian wasteland where up is down and down is up, and no one knows which is which, least of all the folks buying and selling this crap.
  6. Domenico Tassone from Viewthrough Measurement Consortium , April 8, 2014 at 7:40 p.m.
    Clicks represent an immediate response measure that has become the KPI of choice for the lazy and uninformed. Can you imagine if TV and print advertising were evaluated that way? Still, clicks are not all bad and can be valid for direct-response campaigns (assuming the messaging reflects this).
  7. Pete Austin from Triggered Messaging , April 9, 2014 at 6:16 a.m.
    Don't swap out CTR, because that will leave you with one less way to compare past and future results. Keep it for that purpose, and supplement it with other measurements that more closely correlate with your customer journey.
  8. Tyler Champley from GameHouse , April 10, 2014 at 1:09 p.m.
    I'm unaware of any honest person attributing a successful campaign to strictly CTR. However, that doesn't mean CTR is no longer a success metric. Case in point, higher CTR on Facebook Ads often lead to lower CPC or CPM costs, which of course can reduce your cost per acquisition. Low CTR rates on Facebook Ads not only lead to increased CPC and CPM rates but also lower reach. So in this aspect, CTR as a funnel component is still an extremely valid success metric.