We're always interested in any coverage of the migration of ad dollars from traditional print and broadcast media to online media. Russell Glass, CEO of the B2B marketing firm Bizo, has been watching as well, and he says that while billions of dollars a year (somewhere between 3 and 5 billion is his rough estimate), marketers are making one very big, and increasingly costly, mistake: they are using outdated metrics. He writes at MarketingProfs that some marketers remain wedded to using "click" and "click through rates" (CTR) to measure success in part because they are easy to measure and in part because, well, old habits die hard. Glass:
However, the click's days are numbered. There is an increasing
awareness of some "cracks" in the click's validity, and recent studies
by comScore, Microsoft, and others have effectively invalidated the
click as an important measure for display advertising.
Bizo's recent study of hundreds of B2B advertising campaigns that
ran from January through June of 2010 revealed some interesting
Among campaigns that were being measured and optimized to actions
(conversions, downloads, etc.), the CTR was approximately 10% lower
than that of campaigns that were being optimized to clicks. In short,
campaigns with actions as their goals drive 10% fewer clicks.
The data also shows that of the top 25 inventory sources based on
CTR, only six of them fall in the top 25 from a conversion-rate
perspective. That means that sites that have great CTRs typically do
not offer great conversion rates. Thus, using CTR as a meaningful
metric on publisher sites is just as big a mistake as doing so on ad
networks, as it would lead a campaign astray almost 80% of the time.
Considering that the goal of any advertising investment is to drive
a prospect to a conversion action (e.g., purchase, engagement, a user
filling out a form, etc.), the fact that the click-through rate is
lower when optimizing to the end action has a profound and clear
implication: Optimizing to the click harms a campaign's success.
Read How to Avoid Online Advertising's $1 Billion Mistake here.