Death of the Click Through Rate

Being in the media industry for nearly two decades puts me in the unique position of being around since the infancy of the digital age.  I remember the days when the only ad unit in existence was a static 468 x 60 banner typically offered as ‘value add’ when purchasing magazine or newspaper advertising. The hard negotiations focused on getting the banner above the fold (since people only see an ad at the top of the page, right?).  Back in those days, it was not uncommon to see click through rates of 1 – 5%, and click through rate was the be all and end all in determining if the campaign was a success.

Wow – how times have changed.

Ad units and targeting capabilities are now limitless, and campaign cost per thousand (CPMs) are typically very reasonable.  If you recently searched for a vacation package to Cuba, chances are you are now being inundated with vacation travel ads.  Why?  Because based on your digital behaviour you identified yourself as a travel intender, and the Internet Gods (or smart advertisers) want to ensure you get ads that are relevant to you. Ad units have moved from static 468 x 60 banners to full-page takeovers, catfish, video, vokens, marketplace, newsfeed, mobile, native and dynamic. Targeting has become exceptionally finite – behaviour, site and search re-targeting, look-a-like and geo-fencing are just the tip of the iceberg.  Even the way digital is planned has evolved and is now primarily RTB (real time bidding) and Programmatic (automated).  So, why are we still using such an archaic and outdated measure to evaluate the success of a campaign?  Short answer – we shouldn’t be.  We shouldn’t have then, and we shouldn’t be now.

Now, don’t get me wrong, click through rate has merit for evaluation.  It can help with campaign optimization by understanding how one piece of creative performs against another provided the impression levels/exposure of each ad unit are similar.  For search, Google automatically optimizes creative based on click through rate (CTR). It’s more relevant in this case for the sole purpose of search to get people to click through.  You just searched for something specific, we just served you an ad specific to your request, so click here to get the answer you’re looking for.

Consider this.  Some years ago I planned, implemented and managed a campaign for a tourism destination.  Although the strategy was long term (six months), the campaign launched with a blitz – a one-day blowout to drive traffic to the newly launched website.  Circa 2005 there were two big digital players in the market – Yahoo and MSN.  They were key players not only because they provided news, sports, and entertainment content, but also both were email providers (remember when EVERYONE you knew had a Hotmail address?).  Users needed to log in to Yahoo or MSN to get to their email.  Could we target by behaviour or intent or age? No, but we had access to virtually every Canadian with a computer!  Vendors reported on click through rate primarily since it was the driving factor in determining the success of a campaign.

MSN had a click through rate of 0.  Not only 0, but 0.00!  Nothing.  Zilch.  Zip.

Yahoo, on the other hand, had a click through rate exceeding 1% (which at the time was considered exceptional).

Believing the click through rate measure, Yahoo kicked MSN’s ass all over the map.  Based on click through rate Yahoo was the driving force that made the campaign a success.

But it wasn’t.

MSN drove 10,000+ clicks to the website.  So much traffic, in fact, the server crashed and was offline for 2 hours (which was a terrible thing, but the media equivalent to a basketball player smashing the backboard).

Yahoo, the king of the campaign, experienced a technical glitch and ultimately delivered only 100 clicks.  Even though the click through rate was 1%, the amount of traffic directed to the site was minimal.

Click through rate can be deceiving.

Click through rate is relevant for search, but not for display campaigns. Display campaigns are typically a slower build – reaching the defined target audience with some frequency before expecting them to respond.  How many times did you see those Cuba vacation ads before you clicked?  Digital users consume content and respond on their own time.  They may see the ad in the morning on their way to work (but who wants to check out vacation packages on the bus on a mobile device)?  They may have been served a similar ad at the office while cruising Facebook, but may not have wanted to dig into vacation planning while their supervisor was one desk to the left.  It might be a day or two or ten before they are in the position to click on that ad, but if they’ve been identified as a valuable lead based on the finite targeting capabilities of their digital behaviour then the gentle reminders on their digital journey will eventually intrigue them to click through…at their leisure, when they are ready and have the time to engage.

Although click through rate should be considered as part of a larger set of metrics, ultimately the campaign’s success reverts to clearly identified objectives.  It’s very unlikely any client will set click through rate as an objective when discussing the greater goals of his or her business.  Companies engage media to increase their brand awareness, drive traffic to their website or contest or social media platform, have users build, price, order, sign up, watch a video (viewthrough), share, tweet, comment or like.  Determining the success or failure of a campaign needs to link back to the objectives – did we increase brand awareness or increase traffic or increase email newsletter sign ups?  If the objectives were met, the campaign was a success, regardless of the click through rate.

Robin Cook, Media Director