The year was 1994, the advertiser was AT&T, and the audience were viewers of HotWired.com. It was the first-ever online banner ad and, while the number of viewers was tiny by today’s standards, the click-thru rate was an impressive 44%.
The small, static online world of 1994 has since been transformed into today’s rich, interactive marketplace, and click-thru rates are more likely to be .44% than 44%. Unfortunately, many marketers are still judging their online ad programs using this same, single measurement: “click.” This narrow focus can lead marketers to optimize their programs into failure.
A recent study from Quantcast compared two audiences of an online retailer: those who viewed the retailer’s online ad and clicked versus those who viewed the ad, didn’t click, but visited the site later. The study showed that the ‘non-clickers’ were far more likely to become actual purchasers than those who clicked the online ads. The study found the same results when assessing the campaign of an insurance provider. Among clickers and non-clickers, it was the non-clickers who were likeliest to become customers. For both companies, clickers were more likely than the average U.S. Internet user to be ages 24 and younger or 65 and older. This is in marked contrast to the actual purchasers for both businesses, who were more likely to be in the 25-44 age range.
Since the “click” numbers were lower, does that mean the advertising programs were ineffective? Not at all. The programs were successful in making potential customers aware of the product or service and led to sales conversions. But it’s clear that, had the advertisers optimized their campaigns based solely on click-thru rates, they would have been optimizing away from their most likely purchasers.
What This Means to You:
It’s important for marketers to keep the end-game in mind, as they develop and manage the online portion of their marketing programs. What is the ultimate outcome you’re trying to achieve? Are you optimizing toward that goal, or are you focused on a metric that could be unrelated to, or even counter to, that goal?
The path to conversion has never been a straight one, and in today’s fractured, noisy media world, it bears more resemblance to a pinball game than a funnel. “Television” no longer stays in your television. “Online” can appear on your phone, your tablet, your computer, or your game console. Social media continues to expand, but today’s heroic new ad format can be tomorrow’s spam. It’s more challenging than ever to gauge the effects of the various marketing inputs that lead to brand awareness, positive associations, purchase, and loyalty. And even within the happily trackable online world, the path is less likely to be a single metric, such as the click, and more likely to be a meandering mix of impressions, views, and engagements.
The idea of a single online metric that can define the success of a program is very alluring. But don’t be seduced. We consumers cannot be that easily codified. Set your performance goals based on the metrics that ultimately drive your success – leads, referrals, conversions – then develop measurement techniques to understand the relevant inputs and consumer behaviors that lead to that result.
Wynn Saggus, VP/Group Account Director at The Ramey Agency