A brief history of CTR:
When the first display banners appeared in the 90’s, they were greeted with much fan fare and significantly higher Click Through Rate (CTR) as compared to today’s CTR. Over the years, display advertising has been the fuel that turns the Internet’s content machine and allows publishers to provide free online content to consumers. However, as online advertising developed and grew in spending and also in sophistication, CTR declined.
What caused this decline in CTR in the first place? Evidence shows that the success of online advertising has paradoxically been the prime cause for the decline in CTR performance. As more budgets were poured into display, consumers were exposed to more and more ads. However, the number of ads that a user clicked on did not catch up with the number of ads that a user was exposed to, thus reducing the overall CTR.
The story is even worse on the top social networking site in the world – Facebook. An analysis by online analytics firm Webtrends of more than 11,000 Facebook campaigns shows that ads on the social networking site last year had click-through rates which on average were about half the click-through rate of your typical non-Facebook web banner ad. The average click-through rate (CTR) for Facebook ads in 2010 was 0.051%, or about one click-through for every 2,000 ad impressions. The industry standard CTR is 0.1 percent, or one CT for every 1,000 impressions. Facebook’s CTR last year also was down from 0.063% in 2009.
Our greatest strength has become our greatest weakness:
Clients and agencies have become so obsessed with data and measurability, that they have confused the measurable with the meaningful. Click-through rates, interaction rates, open rates, download rates. Cost-per-acquisition, -per-lead, -per-action, -per-thousand. Engagement metrics. Real-time optimization. Dynamic multi-variable testing…
The decade-long quantitative orgy has led to a process built up around how ads are bought and sold, based around a media plan, and RFPs. All the good, creative thoughts get boiled down into spreadsheets. In a world of over-produced impressions, even great work by marketers is ignored at best and more commonly not even seen.
Pure focus on measuring display ads is killing desire (and Big Brand spending).
We really should be able to create desire, and desire lives in the heart not the hard drive. It’s called the “art” of persuasion for a reason. Without desire, there’s little to measure. Declining register receipts will tell you all you need to know.
A new standard is born:
The world is rapidly moving towards devices/screens which function on “touch” and “gestures”, there are some quiet clear trends for us to see –
Smartphones with just touchscreen interfaces, rather than those with screen and keypad, will become the norm by 2016, according to a new study from Juniper Research. The analyst group says that by 2016, shipments of touchscreen-only smartphones will surpass 700 million per year, or 72% of total smartphone shipments, against half of all total shipments in 2010.
A report by Gartner, the technology consultancy, forecasts that tablet sales will more than double in 2011 from an expected 19.5m units this year, and surpass 208m units in 2014.
Similarly, TV’s and gaming console’s will increasingly use “gesture recognition” to drive consumer involvement with content.
But, all this techtonic shift is guaranteed to have an impact on the current display advertising evaluation metrics. For starters we should rechristen the “click”. I foresee the new definition of the “click” to be “touch”. “Pay per touch” how does that sound? By including the aspect of “touch”, digital creative directors will have a lot more freedom to think explosive banner units. A crude example is to allow consumers to draw out the perfect Swoosh for Nike on a banner property.
I see “gestures” impacting the way we evaluate engagement, interaction and views. Call it the “Cost per gesture” model, augmented advertising through display ads could be a reality.
Hence, I see a future where we shift our focus from mindless measurement to desire creation, we should look forward to creating work with, literally, unimaginable creativity with the right kind of measurement model. In other words, work that works like magic for our clients’ brands, media commissions included.