The Reports of The Clickthrough Rate's Demise Have Been Greatly Exagerrated

It's an ongoing debate in digital marketing circles, but really brought to the forefront lately: How valuable is clickthrough rate (CTR) as a success metric?

A recent report, for example, indicates that the majority of clicks come from an extremely small group of people.

At an IAB event last week, a speaker basically said "Clicks are dead. You've got to get past looking at clicks."

Within a typical ad campaign, it's normal to expect a clickthrough rate of around 0.10 to 0.20%. And even that's a stretch for some campaigns. In other words, only one or two people click on the ad for every thousand that see it.

And, of course, clicking on an ad is just one of many steps in any consumer interaction -- alone, it does not give us a very complete picture of what actual happened in that interaction. Many interactions don't even involve a click (such as in cases where a user sees an ad, doesn't respond immediately, but at a later time performs a search for the advertised product or brand).

In addition to all this, CTR isn't even an exact measurement. In most campaigns, the number of clicks registered by the ad server is different than the number of visits registered by a site's log files (or other metrics methods).


So, with all these negatives, why do I think that the CTR isn't dead yet?

Lots of reasons. Among them:

1. Clickthrough rate is still better than most traditional metrics.
How many clicks did your latest out of home ad garner? How many people responded to your multi-million dollar TV campaign? How does this compare to the number that responded to your radio campaign that ran at the same time?...

Most traditional marketers simply cannot answer these questions. Those who can do so by spending a significant amount of time, effort, and money on research and analysis. Or they use direct response tactics (such as a unique phone number, coupon code, or other identifiers) to differentiate between ads, channels, offers, etc. (Which is great, but has all sorts of not-so-good impacts on branding and consistency).

2. Clickthrough rate is good for quick analysis of trends and general status.
At a glance, CTR can tell you if Creative A or Creative B is making a bigger impact, or if Placement A or Placement B is more relevant to your target audience.
Watching clickthrough rates change over time can help warn that your campaign is getting stale or, alternatively, tell you that you're reaching an optimal frequency level.

It's not perfect, and it's not a complete picture, but it can be invaluable when you need a quick-and-dirty understanding of what's going on.

3. Clickthrough rate is an important part of the big picture.
Although its importance as an individual metric is questionable, CTR can give us lots of great information when combined with other data.

Going back to Marketing 101 and the AIDA model (Awareness, Interest, Desire, Action), clickthrough rate can help us understand how well we're achieving some of the earlier metrics (Awareness to some degree, but primarily Interest). This info has a low value by itself (it doesn't do much good to gain someone's interest if they don't eventually Desire your product), but can help you understand where you're going wrong (or right).

A campaign with, say, a high CTR but low conversion rate might indicate that the creative is excellent, or very well targeted, or that the offer is strong at first glance, but that the landing page is weak, or that the details of the offer are disappointing when the user looks more closely.

On the other hand, a campaign with a low CTR but high conversion rate might indicate that the media plan needs to shift focus, or that the creative isn't getting the message across clearly, because the small portion of people who do click are actually quite impressed when they get to the landing page.

An ad with high engagement (like watching a video or playing a game) but low clickthrough rate might indicate that it's doing a great job of branding but needs a stronger sense of urgency.

A campaign with high CTRs -- but only for ads with high impression levels -- might tell us that the ads are too complex, or that a certain level of frequency is required, or that sequential messaging would be beneficial.

And so on and so on.

Without understanding the clickthrough portion of the bigger picture, our understanding of the end result is incomplete.

4. Clickthrough rate has become a standard.
Right or wrong, everybody understands (or can understand) how to calculate a clickthrough rate and what it represents. When we start talking about “engagement:” or “time spent” or “viewthrough” or “complete views” or “post click conversions” other metrics that are typically more valuable to an analyst, the waters get a bit muddy. What does an “engagement” really mean? Does 30 seconds spent playing an online game have the same value as 30 seconds spent viewing an online video? How long after an initial impression is made should its contribution still be attributed to a sale?

CTR might be simple, but that’s part of its value. GRPs don’t tell us much about the value of a TV audience, but they’ve become a standard metric for much the same reason, as have distribution and circulation for print.


So, if clicks are still important, this brings up the equally important question:

Why are clickthrough rates so low?

Some thoughts on this in another entry.