CTR: The KPI You Don’t Need for Digital Success
Digital marketers are often hard-pressed to identify key performance indicators (KPIs) that justify a client’s digital marketing campaign or display advertising spend. One indicator perceived as vital to driving conversions (or a marketer’s coveted objective) is the pesky click-through-rate (CTR). You may have heard CTRs are important KPIs in your digital campaigns, but we’re here to debunk this myth.
More clicks = more clicks. Not conversions! Did you know that only around 16 percent of consumers click on display ads in a given month? This means most visitors arrive at an advertiser’s site through some other way than clicking on display ads. So if you’re requesting more clicks, you’ll get just that: more clicks.
Consumers are clicking less and less: Research has shown a decline in the number of clickers from 6 percent to just 4 percent of Internet users over a two-year period, running well below 1 percent on most sites, and each year these rates dip lower.
8% of Internet Users Account for 85% of all Clicks. Only about 16% of users click on an ad at least once a month. Why not optimize your marketing and ad campaigns to the other huge chunk, or 84%, of Internet users who are not clicking? Let’s lower our clickspectations once and for all.
The marketing landscape today: Consumers evaluate and reevaluate their purchasing decisions all the time. And while they may click or a display ad at some point in time, it’s more likely than not that the click will inspire interest along the path to purchase, rather than produce an immediate click-to-conversion. In other words, consumers rarely click and buy (consider your buying process as a prime example); instead they continue browsing and researching before making a purchase decision later on.
Optimizing for just clicks doesn’t help you reach your campaign goals: One study compared a company’s conversions (sales) attained directly through clicks with those that came after consumers saw the ad (view conversions). The outcome: 100 times more view conversions for the campaign, with more than 23,000 view conversions and nearly 300 click conversions. Therefore, optimizing for click conversions influences just the 300 people who clicked through. Optimizing for all conversions, on the other hand, optimizes for the 23,000 people (or views and clickers combined). In the end, the optimization choice is yours.
Click-fraud is on the rise: Not all clicks are random. Sometimes they’re just fraudulent…
Not all marketing channels work like display advertising: Marketing is an amalgam of various channels. It’s important to use what works in the right channel, and evaluate each channel differently. And when it comes to display advertising, CTR should be the last metric you call.
Tips for Digital Success:
Assign (way) more value to your CPA metrics: Effective cost-per-action (CPA) measurements, including formulas such as cost per site visit, cost per conversion, cost per action, cost per sign up, cost per lead, etc., can help you better understand the entirety of your campaign. By optimizing your marketing campaigns towards one of these CPAs, you’re driving real, quantifiable outcomes on an ongoing basis and enabling a truly well-rounded CPA-first approach.
But this is just the beginning. We have plenty more insights, as well as some must-know campaign measurement tips and tricks up our sleeves. Check us out.