Myths of the internet: The worth of click-throughs

medialifemagazine.com

It's the first thing some advertisers ask about. It's the last thing that matters.

Digital advertising is poised to pass TV as the biggest advertising medium over the coming two years. But there’s still a lot of misconceptions about internet advertising. Media Life will take a look at each one in our five-part series, “Myths of the internet.” We begin today with part one.

The first internet display ad, posted on HotWired in 1994, drew a jaw-dropping click-through rate of 78 percent. In the time since, the average CTR has dropped to 0.06 percent, according to DoubleClick.

Yet CTRs remain a driving force behind a lot of digital strategy, and in many ways it has held back the internet from maturing as an advertising medium.

So much of online advertising is about lead generation. But the real potential of digital is branding–brand-building–and you see very little of it. Until it evolves as a builder of brands, the internet will remain a second-tier medium, the equivalent of an electronic Yellow Pages.

Google gets much of the blame for advertisers’ obsession with CTRs, as the lead proponent and marketplace for lead generation. It has shaped how so many look at online advertising.

But CTRs are a poor measure of an ad campaign’s success.

Hers’s what CTRs do tell you:

♦ They tell you how many clicks your ad received.

♦ They tell you the percentage of ads served that generated clicks

Here’s what CTRs don’t tell you:

♦ They don’t tell you how many of the clicks were generated by non-humans–bots–fraudulent clicks.

Be assured, bots are highly unlikely to ever buy your product. Bots account for perhaps a third of all clicks.

♦ They don’t tell you anything about the humans who did happen to click on your ad.

The fact is, not all clicks are of equal value. Some may be from potential customers but you have to assume many are not. And you do not know which fall into which camp.

♦ They really don’t tell you anything about the effectiveness of your overall campaign, your broader message.

If your message is wrong, you could have a good CTR but the clicks are coming from people who are not your target consumer. By contrast, the right message may have a lower CTR but the clicks are coming from your target customer, and more of those clicks turn into sales.

♦ They don’t give you any really sense of whether your campaign is driving actual sales

Most importantly, campaigns focused on click-through are not building the brand, and in the end the brand sets the true value of the product offered. It determines its appeal among consumers and ultimately what people are willing to pay for that product.

And in this digital age when everything has a price attached, brand matters more than ever, not less.

Say there are two similar products for sale on the internet, one a respected brand, the other a no-name.

The brand is 15 percent off, the no-name 20 percent off.

Bet that most consumers will choose the brand at the lesser discount.

But this is really marketing 101. It’s what we’ve always known. At some point it may be rediscovered on the internet.