Petteri Vainikka, Founding Partner & VP Marketing, Enreach. In the third part of his three-part series for ExchnageWire Vainikka explains why collapsing click through rates should not be blamed on the CTR metric itself, but on the way click-based campaigns are currently being executed. And why intelligent use of audience data will allow the CTR 2.0 to deliver increased performance for display channel.
Over the past 9 or so months, there has been increasing discussion – and lobbying – in the online advertising industry against using CTR as key performance metric for campaigns.
Before making an argument in favour of holding on to our beloved CTR (and even proposing a way to add value to it as an even more meaningful metric), it is very revealing to ask ourselves why are so many – and on such a wide-ranging stakeholder front – calling for an end to the use of the almighty CTR? Or better yet, why now?
Perhaps the real reason for many wanting to displace CTR has less to do with ‘clicks not sufficiently measuring brand engagement’, or ‘brand marketers being used to different KPIs”, and more with the reality that with constantly – and relentlessly – falling CTRs, the Internet-native metric no longer works in anyone’s business favour.
It is certainly challenging to convince marketers that their online campaigns are performing better today than they were three years ago if the only meaningful performance metric – the CTR – is lower than it was back then. Some parties can of course claim to have sourced the inventory cheaper also, thus having maintained the same CPC. However, barely being able to maintain the same level of performance by driving prices down is a dead end street for all.
Lets face it: the click is a good metric of users’ active interest towards a marketing message (text, static image, or rich media banner). Moreover, the click is an intrinsic part of the fabric of the Internet, and as such, the embodiment of the unique measurability of the Internet vis-à-vis other mediums.
However, CTR – in its basic undifferentiated form – is lacking much of its potential to not only measure campaign performance, but to also inform, marketers. By adding audience intelligence to ‘blind clicks’, we find ourselves with a very different click-based performance metric, one that does not misinform campaign optimization decisions, but one that is very much aligned with what (also brand) advertisers are interested in: measuring what works best at their target audience. Therefore, instead of wanting to bury CTR as a thing of the past, we should embrace its Internet-native characteristic and augment it with real-time audience analytics. In short, we should embrace CTR 2.0 as the next great online campaign KPI.
Finally, along with embracing CTR 2.0, we also need to agree on new online campaign performance metrics that capture user engagement leading up until the desired click. Much of ad spend is invested in various (commonly called branding) activities leading up until the click (preferably by the right person), and this part of the marketers’ challenge is where online requires to adopt new additional metrics. Good candidates include the already widely adopted metric of viewable impression, and viewable impression’s more informative derivative: in-screen time (the number of seconds a marketing message has been viewable by visitor).
Needless to say, with these new viewability and viewing time metrics, we should start by having audience intelligence (similar to CRT 2.0) built in as the norm. Similar to the story with clicks, we as an industry can serve advertisers significantly better if we are not confined by reporting undifferentiated in-screen time averages, but can refine in screen time information by audience segment to highlight differences – and to produce new valuable consumer insights.
The technology is readily available; the challenge is in changing minds, and having the courage to reimagine and reinvent display advertising, along with display measurement as a whole.