When it Comes to Display, Are Advertisers Addicted to Clicks?

It’s an open secret nearly as old as digital advertising itself: there’s no solid proof that clicks are a relevant measure of an ad campaign’s impact. But the click has become deeply embedded in the economics of advertising, and it will take a major disruption to shift the industry’s focus.

It’s been over a decade since the publication of “Whither the Click,” a comScore study that found that 80% of all clicks on ads at the time came from just 16% of the total online population. A 2009 update to the study drew an even grimmer conclusion, finding that just 8% of internet users accounted for a full 85% of all clicks.

The fact that you’ve likely already heard of this study or still remember it shows just how big of an impression “Whither the Click” made on the advertising world — but as its authors well know, an impression and a conversion are very different things. comScore’s findings have done little to convince the industry to stop their over-reliance on clicks as a metric of campaign effectiveness.

Since 2009, further research has only confirmed the idea that clicks are unrelated to actions that lead to conversions — in fact, after comScore reignited interest in the topic with another follow-up study in 2012, some research even found that the two types of user action have an inverse relationship. In 2014, the IAB recommended that advertisers purchase based on viewability, in large part as a measure to find a metric that more accurately represented the intended effect of display advertising than clicks.

Yet today, advertisers are still trying to optimize their display campaigns for CTR — even though many of them understand that doing so could attract disinterested, unintentional, or fraudulent site visits at the expense of visits from users with intent to purchase. It increasingly seems as though it will take a major industry disruption before the industry can break its click addiction and shift toward a different, more sensible paradigm for assessing display’s impact.

 

Measuring What Matters

Of course, there are some forms of advertisement in which it’s totally reasonable to optimize for CTR. The users you want to reach with a paid search ad, for example, already intend to purchase something related to your ad. The ad shouldn’t therefore be designed to stick out in the user’s mind the next time they’re thinking about buying something — it needs to get them to click right then and there. Since you’re only targeting people at the end of the funnel, it makes sense that you would want your paid search campaign to generate as high a CTR as possible.

But display advertising is a far more dynamic ad format that can target people at many different stages in the marketing funnel. While it can certainly drive conversions as well, display is primarily seen as a way of generating brand lift, which would make viewability the far more appealing and useful measurement of impact. Viewability also makes it possible to pay for impressions based on their quality, given that an ad more likely to be in view on a webpage has a higher quality than one that’s more hidden from the user’s view. CTR isn’t even a reliable metric for display when used in tandem with other metrics, given that various research has suggested that it has no relationship, or even an inverse relationship with conversions, viewability, and in-store visits.

 

A Problem of Inertia

So in the face of all this evidence, why aren’t advertisers and agencies abandoning CTR, moving instead to optimize for conversions, or for awareness-driven measurements like viewability? Part of the problem is that the value placed on clicks is deeply ingrained in digital marketing generally. Google and Facebook, the industry’s two dominant forces, both built their advertising empires on monetized clicks. What’s more, CTR is easy to understand, to compare from campaign to campaign, and to track over time. In an industry that values hard evidence of performance above all else, simple and direct metrics have an undeniable appeal.

And at this point, it would be difficult for agencies to to resist pressure from their clients to continue chasing clicks. In contrast with CTR, models that try to encompass all the interactions leading up to that last click tend to be pretty complex. Clients like using CTR because it’s simple, it’s often cheap, and perhaps most importantly of all, it’s what they’ve always done. What agency wants to turn around and tell their long-time client that the very thing they’ve been paying to get for so many years isn’t worth anything close to what they thought?

Imagining a digital advertising world that isn’t centered around clicks is like imagining one without Google and Facebook. Both companies shaped the programmatic landscape in their own images, and it may take an equally large disruption before advertisers are forced to face up to the fact that CTR just isn’t a relevant metric. Until that happens, advertisers will have to bide their time, continuing to satisfy the demand for clicks while also experimenting with new and better ways of measuring return on ad spend.

 

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