Display advertising is not about CTRs

Click through rates (CTRs). Ahh, that crazy metric that punches well above its weight in the debate about online advertising performance. Let’s state this upfront: I’ve never been a big fan on the focus on CTRs. New research backs this skepticism up with compelling data.

A recent study – “Natural Born Clickers” from ComScore and media agency Starcom – casts light on who clicks on display ads, who ends up at campaign sites, and provides some interesting take-outs for online advertisers and publishers. Adage covers the study nicely.

The first observation I pulled from the article is that 16% of the online audience in the US are responsible for 80% of clicks.

What to make of this?

Firstly, I think this resonates with how many of us behave online. We see ads. Some cut-through and register with us. Do we click? Well, it depends on the creative.

I’ve enjoyed the recent BWS ads which have run on The Roar. They politely expand and provide compelling reasons to interact with the brand (eg, by asking what kind of wine person you are via a short wizard within the creative).

So as with all advertising, getting cut-through in your message is a challenge. Many ads don’t register with consumers. But some will. The types of people who click on a lot of display ads may be those with time on their hands and not necessarily the people a brand is trying to engage with.

And clicking to end up at a new destination isn’t usually a goal of a consumer. But certain creative makes interacting with a brand more compelling.

So to me, CTRs are a measure of creative effectiveness as much as anything else.

What also comes out in the study is that a low number of clicks doesn’t necessarily mean display banners aren’t doing their job.

The study found that display ads, regardless of clicks, generate significant increase in campaign and brand site visits. Brand searches increased too. As did sales from those exposed to the display ads.

This effect lasts, with people exposed to the ads 45% more likely to visit the brand’s site after four weeks.

So online display advertising works. Can we end this debate now?

We recently completed a campaign on Lost At E Minor with an alcohol brand. The click through rates on the creative weren’t exceptional.

But we would be foolish to say that the campaign wasn’t a success.

To test the effectiveness, we must measure increases in sales. At the point of sale, are our audience more likely to buy the brand given it’s association with our site? I would say yes.

Or are they more likely to pay a premium price for the product? Probably yes again.

But these are harder to measure metrics, especially when a campaign is running across multiple sites and you’re trying to optimise site placement. But these are the right metrics to be assessing when judging online display advertising performance.

Another approach to testing advertising effectiveness is to measure backwards.

Pick a group of your ‘best’ customers. Then find out what path they followed to your brand. A little harder than CTR figures, but much more accurate.