Why marketers need to see beyond click-through-rate
Using click-through rate (CTR) as your primary digital campaign metric is like using snake oil as your primary medicine. It might make you feel good at first, but it’s not going to cure anything.
This metric is — at best — misleading and — at worst — fraudulent.
The unfortunate difference between snake oil and CTR: Modern medicine has eradicated snake oil. Sadly, even in the face of more reliable metrics, CTR lives on in the marketing community.
The rise of CTR
In an earlier age of the internet, CTR made a lot of sense.
The first display ads generated a high CTR simply because they were new and intriguing. Internet users couldn’t resist clicking on these flashing boxes, and publishers realised that this behavior was easy to quantify.
It provided them with fairly accurate data regarding how many people had 'seen' their ad.
Over time, the use of CTR spread because it was the path of least resistance.
Instead of crafting a tailor-made key performance indicator for a campaign, advertisers would trot out this metric because, in their eyes, it could be counted on as proof of a return on advertising investment. Clicks alone judged the success or failure of a campaign, and marketers grew hesitant to step outside the box because it might damage their CTR numbers.
As powerful as the belief in CTR may be, it’s time to compare snake oil to penicillin.
The reality of CTR
CTR is antiquated. Just look at the facts: These days, display ads are hardly being clicked on. To boot, the majority of those clicks are flukes.
According to Google research, the average CTR for display ads of all formats and placements is approximately .06 percent, and an estimated 60% of clicks on mobile banner ads are accidental.
Because bots are now sophisticated enough to find and click banner ads, by gearing your campaign toward a click-centric metric, you’re creating a race to the bottom and asking to be defrauded.
As the number and quality of clicks plummet, so, too, does the value of CTR. The difference between a .05 percent CTR and a .1 percent CTR for 100,000 impressions is only 50 clicks, but the campaign seeing the better percentage will often be viewed as much more triumphant — even though those extra clicks could be virtually meaningless and highly unlikely to drive value to the business.
At the end of the day, neither brand is actually a winner.
CTR is nothing but a vanity metric. It might be fun to show off, but it isn’t worth anything, and it definitely doesn’t tell you anything.
The better route
Optimising your ads for CTR boosts means maximising your nonhuman and accidental impressions. Here are three metric areas that will help you engage with real, qualified customers:
- Take action: Using a cost-per-action metric is something frequently done on direct response campaigns, but every campaign wants to spur some kind of action. Whether this takes the form of a cost per view or a cost per engagement, these kinds of action metrics tell you what your audience is doing. If you’re trying to measure leads or sales for a campaign goal, you could measure cost per acquisition or cost per lead. This is the type of metric that not only provides valuable insights, but can also drive a business outcome
- Stay on target: The on-target percentage lets you confirm your ads are reaching the right people. Using third-party measurement tools, you can gain demographic information on specific audiences. You can also group impressions, clicks, and conversations into 'buckets' with always-on data segments — and the areas that index the highest will reveal your target audience
- Be verified: Efficiency is a byword of modern business, and using a verified cost-per-impression metric will tell you how cost-efficient it is to reach a certain audience. If you discover that you’re reaching the same audience through a programmatic buy at a dramatically lower cost than via a B2B trade site, then even if the viewability rates are lower, it could still make financial sense to take that route
We need to set aside the placebo of CTR once and for all. For too long, we have held to this almost superstitious metric, based on flawed data, that provides no information and is increasingly incapable of yielding favorable business results.
Scientific, data-driven measurements have arrived. We no longer need to put our faith in snake oil.