Click-through rate past sell by date

Tom Langley, Head of Media Propositions at dunnhumby, writes about click-through rates and how they may be hazardous to your brand’s health.

Clicks are one of the oldest measures in the marketer’s toolkit. Since the dawn of digital, we’ve marvelled at the ability to directly measure how our campaigns are performing based on how users engage with them. Clicks are a clear, unambiguous sign of customers’ love for our campaigns, brands and products. Great CTR? Great campaign, obviously.

Except it’s not really true, and deep down we all know it.

Think about when you last clicked on an advert (and not as a result of fat thumbs, poor site functionality or the sort of pop-up ads that just refuse to die)? In the UK, an average click-through for display ads hovers around 0.10%- that’s around 1 in 1,000 before you account for the mistakes and the bots.

In fairness, there’s often a lack of good data available for measurement of digital campaigns. If you’re a pure play online retailer, and you’re smart and scientific about how you set up campaigns, you can get solid measures of campaign performance. If, like many brands and retailers, the majority of your sales happen offline, to truly determine the success of your digital advertising campaigns, you need to be able to attribute this activity to real sales.

Rather than clicks, the true measure should be the impact on purchase behaviour after exposure to the campaign. While this might seem like an unattainable holy grail of measurement, it IS possible. By linking display campaign exposure data directly to customer-level store behaviour, you can understand the effect of digital advertising on actual sales.

To determine whether click-through is predictive of campaign performance or not, we recently conducted a study using data from over 60 FMCG and General Merchandise digital advertising campaigns run in the UK over the past 12 months with a minimum of 1M impressions:

Click through rate

Hands up if you can see a pattern in there? We certainly can’t. We’ve found no evidence that click-through is in any way related to sales performance for display campaigns. We’ve carried out a similar study in other markets with the same results. Whilst data isn’t yet available for other channels, it’s a safe bet that the story is the same.

What’s also interesting about these results is that the campaigns do, in general, work. In fact, we’ve found plenty of predictors of campaign performance – relevant target audiences, tailored, simple creative messaging and the right frequency of exposure – these are the key drivers of performance.

In other words, good marketing practices lead to high performing campaigns – and the right approach to measurement brings this to light. Concentrating on clicks does not. At best, you’re having no tangible impact on your digital media performance, and at worst you could be promoting bad campaigns at the expense of good ones due to a flawed measure.

Click through rate is well past its sell-by date, and may be hazardous to your brand’s health.

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