A new Nielsen study commissioned by mobile location ad firm xAd reinforces that view, suggesting click rates can even have an inverse impact on ad engagement. In other words, the higher the click rate, the lower the rate of ad interaction — like getting driving directions — following the click, and vice versa.
The findings were based on an analysis of 80 campaigns run on xAd’s platform involving 12 national brands and over 200 million impressions. The research was conducted in the first half of 2014. Local analytics and attribution firm Placed was used to track in-store visitation patterns and lift. All campaigns in the study received free ad impressions to ensure that Nielsen could control and isolate variables, such as targeting method and ad creative.
The campaigns analyzed used standard banners and rich media and secondary actions included a click for calls, getting directions or going to a brand’s Web site for more information. The ads reflect the type of localized, direct response campaigns run on xAd’s network, rather than efforts focused on raising brand awareness.
When optimizing campaigns for higher click rates — such as by running ads in gaming and entertainment apps — xAd found that the rate of secondary actions went down. When the click rate increased by up to 38% across campaigns for retail, restaurant and auto brands, the secondary action rate fell by up to 69%.
The reverse was also true, though the impact on click rates wasn't as dramatic. So when campaigns were optimized to drive secondary actions — those actions increased by 200%, while click rates dropped by about 25%.
“The publishers who perform best for secondary actions tend to be properties with highly engaged audiences, such as navigation and weather apps. So while it might take more consideration for a consumer to click on an ad to take them out of these properties, the value of reaching these consumes is clear,” states the report.
xAd, however, acknowledged that ads with these type of calls-to-action are less effective when it comes to promoting products with longer consideration cycles, like cars. Of the three ad categories studied—retail, restaurants and autos—retail had the highest “exposed conversion rate,” or percentage of people actually visiting a business’ location after seeing an ad, at 9.5%. For restaurants, it was 6%, and for autos, .40%.
For that reason, the study concludes mobile advertising for the auto category “is largely around brand building and information-gathering.” By contrast, retail and restaurants typically have shorter conversion windows because of the nature of those two verticals.
Mobile accounts for 37% of retailers’ digital ad budgets, the highest proportion among 10 major ad verticals, according to an estimate released by eMarketer earlier this year. Auto, however, wasn’t far behind, at 35%, ranking third after retail and financial services (35.5%).
“Most purchases are still happening in actual stores versus online and/or on mobile, so a key goal of any mobile campaign should be to drive in-store foot traffic and sales,” noted Monica Ho, senior vice president, marketing at xAd.
She doesn’t expect the click-through-rate to disappear as a mobile ad metric, but emphasized other measures, like calls or store visitation, can provide better insight on ad effectiveness. “Mobile is inherently different from desktop and everything from targeting to creative to measurement needs to be reevaluated,” she said.