Campaign Performance – To Each His Own

Since I’ve been in the online media planning business, many online advertisers have placed entirely too much faith in the performance of their campaign versus a nebulous “industry average.” Anyone who has ever planned online media will have answered the inevitable question from the client, “What is the industry average click rate?”

What’s worse, clients sometimes believe that there are industry standard conversion and impression-to-action rates. Yuck! If that were the case, those of us selling PEZ dispensers online would be out of business and those of us selling gold-plated Mercedes Benzes would be rich beyond our wildest dreams.

Heck, if one could be guaranteed a 1 percent CTR and a 1 percent conversion rate, regardless of the product offered, I’d be the one selling Californium-252 (at $1,000 per microgram, the most expensive thing in the world, according to The Straight Dope.) At a 50 percent markup.

I think you get my point here, which is to say that there’s only one thing sillier than asking what standard response rates are on the web — and that’s comparing your response rates to an “industry average.”

We all have different objectives and different reasons for committing to the web. Maybe we want people to interact with our brand by building their own VW Beetle online. Maybe we want to increase awareness of our revolutionary new weed whacker. Perhaps our goal is to build an email database representing people interested in high-end stereo equipment. Just as our reasons for being online are different, so are our products and services, business models and levels of commitment to the medium.

What many online advertisers need to do is to get away from drawing comparisons to the “industry average,” whether it’s CTR, conversion rates or what have you. Instead, they should be asking themselves the following questions:

  1. What is my goal?
  2. What am I willing to invest in order to achieve this goal?
  3. How will I know that I have succeeded in achieving this goal?

Thus, if VW wants to increase interaction with its brand in order to move prospects closer to a serious consideration of the new Beetle, they may want to see an increase in visits to the “Build Your Own New Beetle” page.

Let’s assume it’s 200,000 incremental visits. If VW knows from its traditional branding campaign that it costs anywhere from $5 to $20 to get someone who’s aware of the Beetle to move into the “consideration” mode, they might develop a “Cost Per Beetle Construction” of anywhere between $5 and $20. Thus, their campaign should cost anywhere from $1 million to $4 million to achieve the desired effect.

If VW is able to spend less and achieve more, or alternately get more considerations for the dollars spent, they’re doing pretty darned good. The important thing is that they’re not chucking a bunch of VW banners out there and comparing their average click rate to that of an online brokerage.

It doesn’t matter how everyone else is doing out there. What’s important is that the web is working for you and your product. If you’re still justifying your commitment to the web by comparing yourself to the “industry average,” you might be in trouble.

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