Why the Click Is the Right Metric for Online Ads (On Adding Value and Thinking Beyond the Display Advertising Business Model)
“…many advertisers in the past gave most of the credit for a sale or conversion — which in the web world could include anything from visiting a website to printing an online coupon — to the last ad clicked on or seen by a consumer. But that means brand-focused sites such as NYTimes.com and MarthaStewart.com and even social-media sites such as Facebook and MySpace lose credit because they are often not where a consumer will see that last ad. And when they lose credit, they lose advertisers, and when they lose ad revenue, well, you’ve read that story.
“Publishers have a lot to gain,” said Steve Kerho, VP-analytics, media and marketing optimization at Organic. Mr. Kerho has been doing lots of analysis on how online-display ads affect search and conversions and found that in some cases, a display ad can increase a search ad’s click-through rate 25% to 30%. If he had simply measured the clicks from search, he would have missed the display ads’ influence.”
So… If we’d translate the above model to, say, a real world situation; that’d mean that the sales guy in the local electronics store should get a piece of the provision pie, and maybe you’re neighbourhood whiz kid should be offered a small fee too, since they were the ones that influenced you before you decided to shell out on a new bleeding-edge desktop and order it directly by mail-order, no?
Of course, the conclusion presented above is preposterous to say the least. Not giving full credit to the last click shows a lack of common sense and of everyday reality:
If we’d were to apply this model to the offline advertising industry we’d might as well start charging less for TV ads during the Super Bowl or advertisements in general, since it has never been empirically proven that said ads actually sell significantly more cars, to name but an example.
(Actually I hereby challenge thee naysayers to tell me why the fledgling automotive industry in the US can’t be saved by throwing more money against Interruption Campaigns now that the going is though… Odds are it’s because it just doesn’t work that way nowadays…)
Publishers would of course love to use such a model, since suddenly those abysmally low Click Through Rates on social networks ´d become a license to print money, yet that’s not where the problem lies: it’s about engaging with the visitors of the Facebook’s of this world if and when they feel like it, adding value to the community, giving them something to talk about or a good reason to get rid of their friends. The engagement model is a far more viable one since it makes it very clear for all stakeholders what the true value of those brand interactions are for everyone.
Conjuring op schemes to charge more for a product -display banner- that, on it’s own, has failed to truly deliver on its promise up until this very moment, is not the way forward out of this recession. The research budget would be well better spent on innovation, adding value to the visitors, strategic alliances -you name it, just do not waste it on taking undercover pot-shots at “Go -Emperor CPC- Gle” et all.
There is one thing that does ring true about the statement that a conversion shouldn’t be attributed to just the Last Click alone; and that’s the reoccurring coincidence that carefully crafted, creative Crossmedia campaigns drive word-of-mouth & website traffic, allowing for a tighter control on conversion, ánd they also have the uncanny ability to tip the Attitude scale in your Brands’ favour. A little…
It’s common sense and it’s what marketing should be all about: influencing as many factors as you can to get the prospect to turn into a consumer, making her loyal, spurring her on to buy more and in the end becoming a brand-ambassador.
The communication mix as well as the quality of your product combined with the customer centricity level of your organization all contribute to that end.
As well as a million other tiny factors (does the sun shine, did THAT girl on the train give you a smile, do you have enough money to spare, etc., etc..)
Yet, if we’d follow the philosophy of Mr. Kerho to it’s conclusion, it’d mean we’d have to split the Cost-per-Click revenue and spread the wealth over all communication channels and creatives -and not just the display banner- in order to get a somewhat “fairer” representation of value/conversion for money.
[The Adage article starts with this quote: "The great paradox of the web is that it's an interactive medium and everything can be measured. And that's wonderful -- unless you're measuring the wrong thing."
I'd think what they should be stating is: The single greatest asset of the web is that it's an interactive medium, perpetuously capable of reinventing itself. And that's wonderful -- Unless you don't keep your feet firmly on the ground and try to look at opportunities with a positive mindset!]