Still Judging Your Online Advertising By Its CTR?

Ah – the good old click thru rate. It’s a logical metric for measuring online advertising, surely?  People see your ad and if they like what you have to say they click on it and visit your site, right? Wrong.


Tell me, when was the last time you clicked on an online ad? OK, now tell me the last time you clicked on one and it wasn’t an accident?


You don’t, do you? Neither do I. In the same way I very rarely leap out of my chair to pick up the phone or boot up my laptop in response to a TV, press or magazine ad. You’re doing something else and the message isn’t relevant right now. Does that mean that ad isn’t influencing you? That your brain isn’t filing it away, even if subconsciously, for future reference? I don’t have to respond the second I see it for it to be effective.


Still not convinced? Let me point you in the direction of a study conducted last year by Sequential Media.  They tracked 263 million ad impressions across 9 months across 18 advertisers in numerous verticals (I don’t know if any were travel-related) and found the click thru rate was the metric that had the least correlation with conversion to booking. On a scale where 0 was no correlation and 1 was a 100% correlation, CTR scored 0.1 – that’s pretty pathetic.


The metrics that did score well were ‘viewable impressions’ (as opposed to just ‘impressions’, which don’t take account of impressions that occur below the fold) which scored 0.35 and ‘hover/interaction rate’ which scored 0.49.


This isn’t an isolated study either. In 2010, MediaMind came to the same conclusion and championed dwell rate and dwell time with an online ad as better metrics by which to judge online advertising.


I make the point because I still hear peers in travel and tourism marketing ruling out online advertising – with the notable exception of retargeting – because the click thru rates are poor.  The trouble is that they’re comparing online advertising with search – more of a direct response medium operating at the sharp end of the purchase funnel – were CTR still has relevance.  The consumer is coming to Google with intent.  Online advertising is more likely to operate at the top of the funnel – influencing brand metrics such as awareness, favourability and purchase intent. You wouldn’t judge an English Literature student by how the did in a maths exam – you need to use the right measure based on what role that medium is playing.


You need activity which drives prospects into the top of your purchase funnel and develops a preference for your company at the early stages of research, otherwise everything comes down to a ‘bun fight’ over price. Good, interactive online advertising, especially video, can do this for you.


My advice, give it a try. If you can afford it, work with your agency so you can measure post impression performance of your online advertising campaign right through to site conversion. I think you’ll be in for a pleasant surprise.

Want to more than Double the Effectiveness of Your Online Advertising? – Here’s How

Two recent developments have suggested ways to more than double the effectiveness of online advertising – a combination of ad content, frequency and placement.


It seems a little premature to be blogging on the subject of online advertising again but there have been a couple of developments in the past week that have compelled me to put ‘fingers to keyboard’.


The first is a report released by Eyeblaster based on a study of online advertising by the airline industry. How I know the airline industry isn’t representative of the whole travel and tourism industry but I do think some of the learnings can be applied more widely.


The report covers how online creative, environment and frequency can optimise the effectiveness of online travel advertising.


The biggest win, if you haven’t actioned it already, is to replace your old fashioned banner ads with interactive or rich media ones. From Eyeblaster’s study of the airline industry, this change was found to increase click thrus by a factor of 2.7 and to double conversions. This makes sense – not only are rich media ads more prominent, they’re also by their very nature more interactive and, if you’re clever, more dynamic and therefore more likely to be relevant.


Eyeblaster also investigated the optimum frequency. The figure they arrived at was 4 – that is 4 impressions per target user was the optimum to maximise click thrus. The conclusion was that even the airline industry was significantly under-investing in online advertising as 82% of campaigns served users 3 or fewer.


Online Ad Conversion  Rate by Placement - Airlines

Online Ad Conversion Rate by Placement - Airlines

The really interesting stat however was to do with environment. Most travel companies would opt for ‘travel’ sites and/or travel sections in other more general sites as the optimum place to serve their online ads. Eyeblaster’s study found that travel sites were not the best environments for either direct response or branding.


For direct response, news and finance sites performed better when both good ‘post click’ conversions (conversions from those who click thru from an ad) and ‘post impression’ conversions (conversions from those who see an ad but don’t click thru from it) were analysed. Travel sites delivered good ‘post impression’ conversions but poor ‘post click’ conversions, probably due to the competition with other travel advertising.


For branding campaigns, Eyeblaster used Dwell Rate (proportion of users who see an ad who interact with it in some way) and Average Dwell Time (the average length of that interaction) as the key metrics for success. In this case, travel performed well for Dwell Rate but poorly for Average Dwell Time, again most likely to do with competition from other advertisers. News, lifestyle and finance sites were the best performing overall, with finances sites warranting an mention as a particularly good place to engage a more upmarket user.


Dwell Rates and Average Dwell Times for Online Ads - Airlines

Dwell Rates and Average Dwell Times for Online Ads - Airlines

So these results are suggesting that you should be looking beyond pure travel sites to news, finance and lifestyle sites which can yield more fruitful results dependent upon your objective.  However, I certainly wouldn’t rule out travel sites’, it’s just that in this environment you’re going to have to work harder to stand out.  That could be by using rich media, including video, it could mean by ad synching (running 2 related creatives on the same page) or it could be by making the ad content dynamic and personalising it to the user.


And it’s on this latter topic that I move on to the 2nd development – the launch of the personalised ad service by Google. Now totally personalised ads are not new – as you know I blogged about Struq only a few weeks ago. But the launch by Google of this service means that it has moved into the mainstream.


So how does it work? Well, in the same way that Struq does in that visitors to an advertiser’s site will be receive an ad with content bespoke to their actions on that site when they visit any part of the Google content network.  Hence, if a user visits your site, searches and clicks on a holiday and doesn’t go on to book, you can serve an ad to that user when they’re on a Google content network site (which includes YouTube) which offers a discount on the very same holiday they’ve been looking for.  Clever stuff.


It’s by doing clever things like this that services such as Struq have claimed better CPAs than search. And the reach of the Google Content Network, over 1m sites in total, makes this launch even more exciting and significant.


The one caveat is consumer reaction to behavioural targeting. Services such as Phorm have run into difficulties in the UK over privacy concerns.  Cookies are ‘anonymous’ but the launch of services like these not only make personalised advertising mainstream for advertisers, but more visible to users to.  I think it’s unlikely but a backlash could result.


* Eyeblaster found that for every conversion ‘post click’, 6.7 conversions were generated ‘post impression’. So when judging the effectiveness of your online advertising campaign, you should be applying a multiplier of 7.7 to your ‘post click’ conversions.

Online Display Advertising – Time for a Re-Think?

Online display advertising has always been a ‘nice to have’ rather than a ‘must have’ in my own promotional plans.  But recent developments have prompted me to re-think my position – in fact, its poised to make a leap between the 2 camps.


I must admit that online advertising is one of those disciplines I’ve probably misjudged.


I remember having a conversation with a senior online marketer at TUI 5 or 6 years ago in which he revealed to me that online advertising was very much an after thought in his digital marketing mix, trailing in a poor third behind search and affiliate activity.


That impression has stayed with me ever since, and although I’ve dabbled, I’ve never found the results so compelling as to make me divert significant budgets from other activity.


But new research is leading me to reappraise my opinion for 2 reasons. First of all, I’ve been too simplistic in the way I’ve been measuring it. Secondly, the targeting options are getting ever more sophisticated.


Let’s tackle the measurement issue first and let’s be frank, the click thru rates for online ads are not that great –  somewhere in the region of 0.1% is the industry average and your search campaign is probably delivering at least 10 times that. So surely it makes no sense to divert any budget from search to online advertising, right? But that’s precisely what some recent research would suggest that you do.


The argument is that search works at the sharp end of the purchase funnel, so targets those most likely to convert. The problem with taking a pure search approach is that consumers may already have formed brand preferences by then, making it hard to for you to change their mind so far down the track. It’s also super competitive down at that end of the funnel – who hasn’t already invested in search engine optimisation and PPC?


Online advertising, however, has more impact at the wide end of the funnel – in fact, it pulls people into the funnel in the first place, which in turn, makes your search campaign more effective as you’ve built awareness and hopefully preference before they see your search ad.


New ad formats like on also make online advertising more attractive

New ad formats like on also make online advertising more attractive

‘Sounds logical but where’s the evidence’ I hear you cry. Well Eyeblaster conducted some research in the US and found that across all business sectors for those businesses running cross channel search and display ads, 23% of the conversions came from search only and 5% came from search and display.  5% may not sound much but effectively online advertising is making search campaigns 20-25% more effective, and that’s on top of the conversions the campaigns are delivering themselves.


And of course online advertising is doing things other than deliver conversions and make your search campaign work harder. It’s building awareness and shaping preferences, if done in the right way.


OK – that’s the measurement issue dealt with so let’s move onto targeting.  Put simply, the options available are becoming more and more specific and hence more and more attractive, especially if you’re a smaller or medium sized business without huge sums to throw around.


These days publishers and ad networks (organisations that sell advertising on a range of sites, often in addition to the publishers themselves) offer a range of targeting options from geographic, to contextual (i.e. content on the page relevant to your offering), to demographic to behavioural (i.e. interested based, from data collected anonymously on the individual’s browsing habits). And in some instances, you combine 2, more or all of the above.


Imagine as a tourism attraction being able to target your marketing geographically (within 30 miles of your attraction), demographically (families) and contextually (things to do locally) – you’re going to be in front of a highly targeted audience.


However, it’s with behavioural targeting that things get really interesting.  Take the service offered by Struq.  It uses information collected from web browsing behaviour, combined with 3rd party data, to deliver what it calls ‘totally personalised’ ads.  Try the online demo and you can see what I mean – not only can the system ensure your ad is delivered to the right audience but it personalises the ad aswell.


Behavioural targeting has had a bit of a bad press – if you’re curious just google ‘Phorm’ (in fact, I’ve done it for you) and you’ll see what I mean – but it’s nothing new. How on earth do you think that Amazon works out which books to recommend (although as my wife and I both use the same PC it offers up a strange mix of historical non-fiction, marketing text books and chick-lit)?  Once people understand the anonymity of the data, how to opt out and realise that it makes the web more relevant for them, objections are likely to fade away.


So my advice – free up some budget for online advertising, explore the options and see what it delivers. And by that I don’t mean click thrus or acquisitions alone – look at how it influences the effectiveness of your search campaign and whether it drives an increase in your branded search traffic. My guess is that you won’t regret it.