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There seemed to be general industry consensus that click-through rate served one purpose, and only one purpose--and that was to compare the performance of creative executions. If the "Buy Now" banner has a higher click-through rate than the "Half-price" banner, you can safely say that the "Buy Now" banner is generating more interest, and therefore is the higher-performing banner.
Apparently, however, click-through rate is alive and well in our industry. It is misleading agencies and clients alike about the performance of the Web sites of a campaign. If Site A has a higher click-through rate than Site B, does that mean Site A is performing better? Is Site A's audience more interested in our product? What if our campaign's click-through rate is .52 percent or .25 percent? Is one or the other good, bad, or average? Click-through rate can't really answer these questions for us because there is a lot to consider behind that number.
When attempting to examine the performance of one site versus another in a campaign, we need to look at as many factors as possible--with consideration of the objective, of course. Sites have many different characteristics that affect performance beyond just the audience type or demographics, for example. For instance, does the site have a high percentage of loyal and frequent visitors or a high percentage of wham-bam-thank you ma'am visitors who get what they need and never return? If most of the visitors are loyal, there is a greater chance of excess frequency to these users and a smaller chance of clicks against these impressions. This would result in a very low click-through rate. But if you can buy this type of audience at a very low rate, the cost of that click could be very efficient, and therefore an important part of a traffic-driving campaign.
If you are still reporting the click-through rates of sites in any reporting presented to clients, I implore you to stop. Because it is so easy to look at and talk about, it becomes the go-to metric for so many folks, and its use undermines the complexity of online media measurement. Even clients who have embraced the Internet still resort back to that little number. It is a number that is so meaningless--and sometimes even dangerous--that when used by an untrained professional it can wreak havoc that can result in hours of de-programming that even hundreds of PowerPoint slides can't achieve.
If you've read this far, I thank you for believing in me that talking about click-through rate is still important. If you think I'm overreacting, let me know. We are building an industry here, folks--we have to work together to make it the best it can be.
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I'm stealing your second-to-the-last paragraph in hopes that you've said this better than I've ever been able to and that it will have more of an impact. Don't worry...I'll source the material. :)
Well stated, but I do think there are tracking tools in the marketplace on click through rates which do allow this metric to be very helpful. For instance, MerchantAdvantage (the name says it all) specializes in helping online merchants list only their best performing products on shopping destination sitees. It then offers its Chanlaytics(cool name) tool so online Merchants can then analyze how those marketing campaigns are working, which includes seeing what clicks are converting to sales. Check out MerchantAdvantage.com for their complete solution which I believe answers your concerns about click throughs and what they mean for online retailers.
In my line of business, IF analyzed correctly, click-throughs are still critical...and if click-throughs don't then equate to a sale then you can see that immediately and tailor your marketing campaign accordingly with MerchantAdvanatge.
And the best part is that you can have all of this for only $245 a month, pretty cost-effective.
Best, Chip Arndt EVP Business Development MerchantAdvantage www.MerchantAdvantage.com
Very nice post Amy!
A major problem is that not enough is invested in tracking other metrics. CTR is easily tracked, and reported in every system out there, but setting up effective post-click and conversion tracking can be time consuming (expensive). Tracking branding impact is much, much harder. The more layers you have (web site managers, marketing dept., ad agency, interactive creative production agency, media agency), the harder it is to effectively track past the click.
No matter how difficult or expensive it is, there is so much evidence that CTR doesn't give you much useful information that it is crucial that post-click tracking is part of any campaign. If all you have is CTR, you are likely to come to the wrong conclusions about creative and site effectiveness.
Another difficulty as a publisher is that campaigns are frequency optimized based on CTR, but then evaluated afterwards on ROI. So if you are tracking conversions, ROI, or other success metrics, use them or share them with the publisher early on. Any good publisher will take that information and make changes to hit the success metrics. If the only thing being used to optimize mid-campaign is the CTR, ROI will suffer.
Finally, one of my pet peeves has always been the combination of focusing on CTR, but not paying attention to frequency. In almost every campaign I've ever looked at, the CTR drops to almost zero after 2 or 3 exposures. If CTR is the most important metric for you, buy frequency capping.
Thanks,
Scott Alperin Senior Manager, Strategy and Marketing, TechTracker Media
As you indicate in your article conversion and sales from the secured traffic are far more interesting indicators of success and I have experienced many instances whereby a site with modest click-throughs and visitors still did wonderfully well.
It is very tempting to fall into the trap of the 'popularity contest' and forget about what we are all trying to achieve: getting the right number of potential customers finding out about our businesses and buying online, and if this number is only 10 per day and it is working for you then keep at it.
Regards
Pascal Fintoni, Head of Business Development, www.n-e-life.com
I think CTR (Click Through Rate) is very important cause it tells us whether our audience is finding our ads useful or not. High CTR also means high interest in our ads. However I have also noticed that the same ad has low CTR at lower positions vis a vis at higher positions. So in deed CTR can be misleading in some cases. But for search professionals it can be one of the parameters to continually optimise the campaign and the ads.
Cheers, Javed
Okay, my nephew's taking a high school biology final. He'd clearly outscore me if I had to take it, but I stand by the metaphor.
Eric Koefoot CEO, PrimeAxis Media
Regards, Ron Welby
I agree on the branding aspect of internet advertising. And the advertisers know darn well it exists. However, if we're ever going to get all the bucks these guys are spending on TV, radio, and print, we are going to have to prove the interactivity and performance of the net. We can do an effective CPM deal with you that includes a minimum CTR. Tell me what you have in mind.
Mike Syran Network Account Manager Advertising.com (410) 244-0654 mailto:msyran@advertising.com
-----Original Message----- From: Bob Gordon [mailto:bgordon@theautochannel.com] Sent: Wednesday, January 26, 2000 1:36 PM To: Mike Syran Cc: Mjrauch@Ns.Net Subject: RE: advertising
Thanks Mike...we believe that there is a branding element to advertising on The Auto Channel and that someone should pay for that. We can work out a favorable CPM and you can keep all of the above your 21 cent pc revenue. Bob
-----Original Message----- From: Mike Syran [mailto:msyran@advertising.com] Sent: Wednesday, January 26, 2000 12:45 PM To: 'Bob Gordon' Subject: RE: advertising
Bob,
Thanks for your reply. What I would like you to consider is the advertising inventory that is unsold from month to month. It earns you "zip". I can give you html codes that you can cut and paste as needed, and we'll throw ads for you while you continue your inhouse marketing efforts. When you get rate card for the inventory, simply replace us. When a campaign ends, stick us back up. Its a 100% sold out solution. Our payouts start at around $.21 per click and we have standard and odd sized banners as well as daughter windows and text links. If you publish a newsletter, we can help you generate revenue from that as well.
Mike Syran Network Account Manager Advertising.com (410) 244-0654 mailto:msyran@advertising.com
-----Original Message----- From: Bob Gordon [mailto:bgordon@theautochannel.com] Sent: Wednesday, January 26, 2000 9:21 AM To: msyran@advertising.com Cc: Mjrauch@Ns.Net Subject: RE: advertising
Dear Mike,
Thank you for your interest in The Auto Channel (TACH).
As you've seen while TACH'ing, we go "Way Beyond The Banner" and offer a broad range of exciting and impactful sponsorship and advertising opportunities...from exclusive integrated co-branded advetorial sections, which are custom designed for each sponsor, to broad reach multi-platform impression programs, to targeted rotating banners at competitive CPM's.
Unlike virtually every other "automotive site", only The Auto Channel acts like an Interactive Television Network with a unique editorial direction, "everything that is automotive".
TACH attracts an Internet savvy audience comprised of both automotive enthusiasts and smart consumers who visit us to use the best research tools on the web: "New Car Buyers Guide", Used Car Buyers Guide, Aftermarket Buyers Guide and soon to come, Tire Buyers Guide, Classic Car Buyers Guide and Auto Service Buyers Guide.
TACH on-line tools are free and deliver information that "levels the playing field" and allows consumers to make intelligent purchase decisions.
Viewers also use TACH to access information to help them answer a variety of maintenance and parts questions like,"how to do it?", "who makes it?", "where to buy it?" "is it worth it?" and "do I really need it?"
In addition to transportation-focused information, TACH visitors have access to the broadest and deepest on-demand live and archived Motor Sports...from exclusive saturation coverage of NASCAR events to pre and post race reports from around the world.
In fact "Yahoo Internet Life" magazine named The Auto Channel as the "Best Auto Sports Web Site" in their July 1999 issue.
TACH continues to lead the industry by exploiting the Internet's native capabilities, which allows our editors, writers and producers to deliver information and entertainment in the "best media available", as: Text; Video; Images; or Audio.
As the Broadband revolution builds momentum and "Fat Pipes" become ubiquitous, TACH's Interactive TV-like content delivery philosophy, will attract an even larger audience by meeting the exploding functionality expectations of sophisticated Internet users.
I would like to understand your advertising goals and budget levels in order to recommend the most effective way to participate as a sponsor on The Auto Channel ...let's speak.
Bob Gordon 502 584 4100
-----Original Message----- From: Mike Syran (by way of Mark Fulmer ) [mailto:msyran@advertising.com] Sent: Tuesday, January 25, 2000 1:02 PM To: bgordon@theautochannel.com Subject: advertising
Hello:
I represent Advertising.com, an interactive internet advertising agency. I am interested in purchasing advertising inventory on your site.
Please get back to me at your earliest convenience.
Warm regards,
Mike Syran Network Account Manager Advertising.com (410) 244-0654 mailto:msyran@advertising.com
Thanks for all the feedback!
Dana-I'm only referring to click through rate here as clicks/impressions for banner ads on websites. I would call home page to landing page a click stream of some sort.
Others-I agree with many of your points, it can be used in the context of other metrics perhaps but definitely never alone or even singled out. I think Dave said it well as a "nice to know"
Also, I was only able to use the one scenario of loyal vs. light users because I only have 600 words :) There could be dozens of scenarios where CTR is misleading.
I am looking forward to ongoing dialogue!
Best, Amy
1. The click through rate 2. The CPM
When you discount the importance of one of these factors I don't see how you can effectively forecast a targeted CPM to meet your client's marketing objectives. Without a balance between analyzing CPM and click through rate you are providing your client with an ineffective media strategy completely ignores 1/2 the cost per click equation.
To ignore the click through rate means you must also ignore the cost per click metric for online advertising campaigns.
Marcus Miller Host- The Advertising Workshop BizRadio 1360, Saturdays 10a-11a
Not usless, but I have always felt newsletters, at least, tend to be more print and hang on the cubie wall or fridge or what-have-you. If you newsletter is relevent and contains actual information on the front page rather than a bunch of links, it can then truely become a branding tool.
For example, how does the click-through rate look in comparison with the conversion rate and overall ROI objectives (CPA/CPC)?
You can take some directional learning from those findings, perhaps the site or ad had a really high click-through rate - but maybe the ad was just fun. Perhaps the ad not as interactive had a better conversion rate.
Click-through rates are still important, but definitely should not be the only metric that is measured with regards to campaign or site success.
Let's talk about the scenario you mentioned, whereby CTR is driven down due to attracting loyal customers. You are suggesting we ignore the low CTR because it is attracting the loyals who are later ignoring our creative. Are you going to stake your business on the few loyal customers you have? You aren't worries about attracting droves of new customers? If you aren't looking at both, you aren't going to make it.
While I agree with you that too much emphasis gets placed on CTR (8 out of 10 times, our highest CTR creatives get a worse ROI than the lower CTR creatives), I dont necessary agree that it's irrelevant.
The first step in the puzzle is getting consumers to your site -- and that starts with CTR. From that point, you've got to have an effective Click to Conversion (C2C) to really make it work.
Being in the very competitive mortgage space, we certainly have seen most of the magic happen on the landing page -- changing copy, images, and layout have all produced the biggest bang for the buck.
Enjoyed the article. Thanks! Eric Nash Online Marketing Manager LoanWeb.com
David Dalka www.daviddalka.com
Cathy
Just thought I would say hello and say what an awesome article!!
Hope all is well with you!
XOXO Dayna