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CTR is the Web

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My friend Darren Herman has reinitiated a debate about the validity of Click Through Rate (CTR) as an online advertising metric. On his blog he posted a great collection of quotes he obtained on the subject from some brilliant industry people. It's an important read. Interesting to me, of the 9 people asked only 1 was of the strong opinion that CTR was an important metric.

Now I understand many people in display advertising have a vested interest in making CTR disappear as a success metric. After all 99.95% of impressions don’t result in a click on a display ad. Any industry saddled with such poor consumer response to their product would look at ways to continue to validate itself to its own customers (read ad dollars) in the face of increased channel competition (Facebook, Apple, Google).

It’s also odd that display advertising seeks to minimize the click when every other channel on the web values it so highly. This begins of course with Google using CTR as the primary factor for its “Quality Score” advertising algorithm – an algo that has built the greatest Ad business the world has ever known. But it doesn’t stop there.

CTR is incredibly important metric in Email both in open rates and in traffic. In Affiliate Marketing EPC or ‘earning-per-click” is the primary success metric. Of course in web site optimization UX people understand CTR on links and navigation is the number one factor to optimizing experiences.

Part of the reason Display advertising broke was because it was built, bought and sold based on the principles of traditional media. I can’t see how removing the only “new media” metric it has is progress. If anything we might want to begin to pay more attention to CTR because traffic is the most important resource the web has to offer.

Speaking of traditional advertising I’m reminded of this great quote by Leo Burnett from 40 some odd years ago:

“involvement and relevancy, of course, are as important as ever, but in the advertising din of today, unless you make yourself noticed and believed, you ain't got nothin'.”

Part of my consternation with the CTR debate is looking at CTR in a silo and making judgments about it in respect to overall performance. The click is but one part of the online ad experience. The click is involvement and relevancy – the click is realtime and realtime is more important then ever in today’s world. The click is also an important proxy for the effectiveness of creative images and messaging.

CTR though is most important in relation to other metrics. Site placements, keywords, conversion rates, average order values and on and on. To effectively optimize we need to look at results across datapoints and understand the interactions and effects. Most of all, we can always learn something by looking at CTR. As a marketer and advertiser knowledge is my greatest asset. Taking that learning away would be foolhardy and I’ll fight any advertising Luddite that tries to do it. You see, that's not my cursor at the top of this post - that's my pistol.

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Comments

Jonathan, thanks for continuing my original post. I do have a question for you: you use email and search as validating that CTR is important. Have you tried using VTR (view thru rate) on those two? My gut tells me that if you had that data readily available across those mediums that you'd very quickly stop paying attention to CTR. No?

Darren- thanks for the comment - & thanks again for raising the issue and igniting the conversations from your original post and preso.

Until Google changes their algo to place more emphasis on conversion rates (scarily, a metric that they have growing visibility into) CTR will continue to be a metric that Search Marketers need to optimize for.

I have large issues with VTR attribution and issues around the validity of the data are well documented. I would never use VTR to gauge the overall effectiveness of a campaign. I *am* fascinated by latency and I think there are some amazing opportunities to develop better solutions for marketers to understand latent behavior and its impact, but I digress.

Bradd Libby, a Search Marketing guy has an interesting post dismissing CTR that I responded to: http://bit.ly/9laG5D

The important part of my response was that online advertising is always a blend of volume and performance (Cost Per) and CTR is an important part of volume.

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