Remember the last time you pulled your car over to the side of the freeway, got out, and approached a billboard to click on it? Or how about the last time you clicked on a radio spot or newspaper ad?
Of course, this sounds ridiculous (or at least it should!). By the same token then, is it reasonable to measure click-through rates for an online ad campaign?
As a stand-alone measurement, most people would agree that click-through rates do not tell the whole story. Conversions on your ad dollars are what really matter at the end of the day. However, click-through rates can still provide some insight on your creative design and ad placement.
The Adknowledge Q1 study, which indicates that conversions result not only from click-throughs but also from users who do not click on ads, seems to have brought a breath of fresh air to the industry. But why is everyone so surprised? Advertisers have been using "non-clickable" advertising mediums for years that have obviously yielded conversions. Otherwise, they would have stopped advertising years ago. Procter & Gamble, General Motors, and American Airlines were all profitable long before consumers clicked on their ads!
So what does a click-through actually mean relative to other forms of advertising? Is there really any way to compare? Is it equivalent to:
The answer is none of the above! Every advertising medium is unique, and advertisers should expect a different type of response from each. However, online ads differ in the sense that they allow for immediate gratification by simply clicking. Even in the case where the user sees the ad but either doesn't have the time or desire to learn more right away, the online ad still delivers a message and helps build recognition, just like a print ad.
A basic online ad has three key features to it: the offer, creative appeal, and relevancy to the viewer. Ideally, the ad appeals to an audience in all three of these categories, but one in three is often enough to get a user's attention. However, an ad may include all the right qualities and still not get the user to click. Either way, the user may be interested in checking it out later.
The actual click-through truly means that the user is both interested and prepared to take a minute at that given time to learn more about the offer. However, when the user does not click, they might still be interested just not right away.
Of course, if there is a game, search function, or drop-down menu embedded in the banner, it can be more enticing for the user to check out the site immediately. Even in these cases, however, click-through rates are declining as well, because the novelty wears off.
So are there times when the click-through rate should matter?
It is likely that when we buy keyword-relevant banners on search engines, the click-through rate is a good indicator. In such cases, users are requesting keywords that are relevant to what the advertiser is offering.
The user is already in a "search mode" mindset where they are looking for something specific. If the advertiser offers something relevant, then a click-through is far more likely to convert into the desired action (sale, registration, download, etc.), simply because the user is looking to do so at that time. Therefore, users are more likely to follow through with a conversion after they click in this case compared to banners running on regular web sites. However, the best way to measure conversions still remains tracking the campaign through a third-party ad server.
Some of the best-converting ad campaigns are those for sites selling contact lenses using these keyword-relevant banners. Contacts are a fairly low-commitment, standardized product that people need on a regular basis. Therefore, when users search keywords such as "contact lens," "contacts," or "buy contacts," an ad offering 50 percent off contact lenses will likely yield very high click-through and conversion rates.
In closing, the click-through rate is usually more of an indicator of how well the creative grabs the user's attention and creates immediate interest, but there can be times when the click-through rate matters. As quantified in the Adknowledge study: Those viewers who do not click may still be very valuable consumers in the future.
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Adam Posman is a strategic planner with BAM Strategy, a leading digital agency with offices in Montreal and Toronto. BAM's core services include strategic planning, media buying, creative production, online contests, email marketing, and customized marketing technologies.
December 12, 2013
1:00pm ET / 10:00am PT