• by Tig Tillinghast , December 5, 2002

Years ago, back when sites pretended they didn’t need to make performance-based deals, one of the big – and, incidentally, valid – arguments against cost-per-click (CPC) deals was that the click wasn’t a very good measure of actual advertising performance.

In point of fact, clicks are a terrible measure of performance, when performance is considered some sort of action or a change of opinion. Anyone who’s been in this business for a few years can cite several instances where clicks were actually a counter-indicator of real performance.

This was bandied about mightily back when sites were backpedaling as fast as they could from advertiser demands for per-performance deals. At the time, the measurement of advertiser-side site performance was poor enough to make cost-per-action (CPA) deals unpractical. The alternative was CPC. The sites said, let’s all stick to CPM.

So I find it odd, now that we live in a world in which it’s relatively trivial to ascertain actual performance on the advertiser’s site that more and more media sellers are shying away from CPA deals and instead falling back on the bad old CPC.

Some of the largest ad networks are claiming they don’t do CPA deals at all (in point of fact, they just won’t do them with the small fry), and are instead launching systems that optimize ad performance over their networks by the click performance.

Even aside from the deception of suddenly pretending to have forgotten that clicks aren’t a good performance measure, this rubs salt into the wound by actually optimizing a campaign to increase click-through. In other words, not only will the advertiser pay for things that aren’t useful to them, they will pay for more and more of them.

This is sort of like taking your superpowers and using them for evil. Targeting and optimization are important technologies for the Internet, and these are the devices by which our industry will usher in a much larger share of media dollars. To turn these powers to the purpose of increasing click-through is sort of like Superman using his x-ray vision to peep into locker rooms.

That a campaign may be based on a CPC deal might be sub-optimal. That this campaign would then be optimized to maximize the number of clicks (and, thereby, the cost to the advertiser) is simply terrible.

The exception would be for campaigns in which the entire objective is the click. Media companies, for instance, sometimes want to simply drive traffic. Once a person visits their page, that’s the pay-off for the advertiser. They create more impressions that they then sell to some other advertiser. But, by and large, the click is only a means to an end.

Perhaps there’s a silver lining in this cloud, though. Media companies are developing optimization technologies, which can’t be a terrible thing. Maybe, if advertisers become savvy enough, they can insist these media vendors take those powerful tools and turn them toward other objectives, like optimizing based on real performance.