[Read] How the Click-Thru Metric is Holding Back Digital Media Spend (comScore Voices)

I recently spoke at ad:Tech London about online advertising effectiveness and addressed the topic of how online display ad effectiveness compares to that of TV. One recent comScore study revealed that the view-through impact of online display ads can have the same impact on sales as what has traditionally been ascribed to TV ads. Unfortunately, measuring the performance of display ads based on the immediate click-thru metric is still a widely accepted practice in the world of digital media, and it is a practice that can have significant negative repercussions for each participant in the online advertising value chain. Worse still, if online ad revenue is meant to be driven by brand advertisers (as opposed to the direct response advertisers that first used the Internet as a marketing channel), clinging to the click won???t add any value to these brand marketers, and they???ll continue to put money where they always have.

Since ad:Tech London, the advertiser, agency, and publisher communities have offered extremely interesting feedback on our findings about the latent impact of display ads. Let???s take a quick look at the main issues in continuing to use click-thru from each perspective in the advertising value chain:

Publishers ??? In a tough economic climate, and amidst continuing declines in click-thru rates (Doubleclick revealed the average stood at 0.08% for U.K. campaigns at the end of 2008), how is it possible to maintain display ad price rates when the metric you???re being judged by is wholly inappropriate? The result is that rates continue to decline as savvy marketers drive hard bargains for valuable inventory by beating up publishers with click-thru data against their own required cost per acquisition targets.

Agencies ??? As the guardians of advertising strategy, planning, and buying, agencies??? credibility is on the line when recommending digital over traditional media. Agencies know online works, but the click-thru metric doesn???t help them prove why or validate getting the justified increase in share of budget for online advertising. It misses all of the positive things that consumers subsequently do in the days and weeks following exposure to an ad.

Advertisers ??? As the world???s largest advertisers make decisions to optimize their media spend, (which becomes harder and harder in the face of increased pressure on budgets), marketers are being forced by the click-thru metric to conclude that any display ad not clicked on is wasted money. The old maxim states that 50% of traditional media ad budget is wasted, and online in the U.K. we are saying that 99.92% of display budget is wasted? Based on that simplistic thinking, I know where I???d invest!

The future of measuring display ad effectiveness has to be by considering view-thru, incorporating consumer behavior over time rather than just clicks. View-thru metrics meet the increased demand for accountability that the Internet faces over any other media, and combines this with an unparalleled relevancy that other metrics just don???t achieve. Marketers will finally have an understanding of what consumers are doing, not just saying, in the days and weeks after seeing display ads, and have an understanding of the volume of search activity that is being driven by display ad exposure.

We know that the global online population is using the Internet for more reasons than ever before. It???s interesting to think that now there are young generations growing up online, whose idea of a travel agent or financial advisor being a real person (rather than a website) is completely alien. In order to communicate with these consumers in the future, companies will need to invest more of their marketing budget online, and this necessitates a more thorough understanding of how online advertising works than the click can ever provide.

comScore will soon be releasing aggregated results for the European market regarding how display ads work over time, and our preliminary results suggest an even larger impact than we???ve seen in the U.S. I think you???ll find the detailed analysis quite illuminating.

I’m sorry I have to insist with this;-)


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