Click Through Rates: What You REALLY Need To Know
In a world where the typical internet user is served 1,707 digital banner ads each month (according to ComScore) and the national click through rate (or CTR) average is said to be around only 0.1%, it can be difficult for many companies marketing in the Washington D.C. area to fully embrace the value of digital display advertising. Especially when they try it and wind up with an average CTR of only 0.08% - or lower! However, despite what you may see and hear about click through rates, they are not the end-all be-all for a digital display campaign. There’s so much more to analyzing a digital display campaign than just the CTR.
Why are CTRs believed to be the determining factor for digital display advertising campaign success? The biggest reason is that the CTR is easy to calculate, explain, and is an easy “out” when your boss is asking for evidence that your marketing dollars were well spent. We can all relate to that, right?
But keep in mind that it really isn’t about the number of clicks your display ad gets, but about the impression your display ad makes on your target audience. It’s about exposing your target audience to your brand and making them remember you through your display advertising, as opposed to creating your display ads to get someone to click on them.
According to a study conducted by ComScore, only 16 percent of internet users account for 80 percent of all clicks. However, your target audience is much larger than that 16% of people who are said to click on display ads, so you are missing out on tens of thousands of people who aren’t “clickers.” If your display ads are designed to make an impression, you will ultimately see a higher return on your investment, even though you may see a lower CTR on your overall campaign. And that’s okay - the CTR can be used as a barometer of engagement, but should not be used to determine anything else.
The same ComScore study found that there is a latency effect with digital display advertising. The exposure your business, product, or service receives as a result of the display ad placement is vital to the success of a digital campaign. There are many ways a user can find your business without clicking on your display ad, and having exposure to your target audience makes a bigger impact on overall conversions than the clicks. Consider a time you saw a banner ad for something of interest to you, but instead of clicking on the banner ad, you did a search for the company or product in your favorite search engine, or typed the company’s URL directly into your web browser. The ad you saw hours (or days, or even months!) earlier made an impression on you. When the time came and you were ready to make a purchase, you easily found the company and became a customer.
Think about the billboards you see on many major roadways. Billboards make an impression on people as they drive by, but someone can’t get out for their car and click on one for more information or to make a purchase. Billboards have the same latency effect as display ads, which is why over 6.6 billion dollars were spent on outdoor advertising in 2012.
Remember, just because someone can click on your display ad, doesn’t mean they will. And just because someone does click on your ad, doesn’t mean they will make a purchase. Create your digital display campaigns to focus the converting users into customers and not “clickers.”
Digital display advertising is not a trend…it is here to stay. For that reason, it should be considered as an option for most marketing plans. But when your digital campaign is over, remember to analyze beyond the click. Because this topic is so important, we’ve written other articles that will help you better incorporate digital display into your marketing plan: