Click-Throughs May Be Through: Rates Plummet As Ad Volume Rises
- by Ross Fadner , February 6, 2004
DoubleClick attributes the decline in click-through rates to the increased volume of ads served online, but maintains that conversion rates have stayed strong. DoubleClick defines conversion as a user taking come kind of action according to the goals of the advertiser, whether it's a sale, increased traffic, or member registration.
"DoubleClick's latest Ad Serving Trend Report reflects what we've been seeing for the past few quarters, particularly that online advertising is driving conversion for marketers. We know, for example, that the holiday season was particularly strong for online retailers, and many of them successfully used online advertising as a vehicle," said Doug Knopper, Senior Vice President and General Manager, Advertiser & Publisher Solutions, DoubleClick.
Knopper adds that rich media, in particular, has seen promising conversion rates. "Specifically, we continue to see that rich media generates exceptional results, especially when we analyze its latent impact on conversion," he says. "In other words, many users tend to take some action after having viewed a rich media ad within thirty days of viewing the ad."
Rich media usage grew to nearly 40 percent of all ads served by DoubleClick in the fourth quarter of 2003, up by a 60 percent increase over the same period in 2002. DoubleClick defines rich media as dynamic ads that fly across the page, pop-ups, and any ad that includes Macromedia Flash creative technology. Rich media inventory at DoubleClick tends to be higher than the industry average because a large number of its advertising clients have bigger ad budgets to spend on rich media creative. DoubleClick adds that less than 2 percent of its rich media inventory includes pop-ups.
The report claims that rich media generates higher conversion rates than non-rich media. For example, post-impression activity per impression for rich media is 1.11 percent vs. .43 percent for non-rich media. Per those activities, post-impression sales are 2.30 percent for rich media and 1.47 percent for non-rich media. The click-through rate for rich media in the fourth quarter of 2003 was 1.24 percent, which DoubleClick claims is higher than some forms of traditional direct response marketing. The rate of return for catalogues is currently .37 percent, according to DoubleClick's Abacus unit.
The report also suggests that the Internet is effective as a branding medium. DoubleClick attributes the decline in click-throughs to volume saturation and the industry's overall maturation. However, users who have converted within thirty days of having viewed an online advertising message without clicking still post a higher number than normal click-through rates.
