If you own a business, determining true ROI for your advertising investments is likely your biggest challenge. For digital campaigns specifically, you’re probably using CTR (Click-Through Rate) as an indicator of campaign performance. Although CTR (Click-Through Rate) has been a primary measure of the success of digital ads for many years, it’s important to know that CTR isn’t telling you the whole story. Many businesses are increasingly questioning the effectiveness of CTR in measuring performance and discovering that there can often be a negligible relationship between CTR and ROI. This article offers three reasons CTR is no longer a sufficient standard of measurement for digital ads.
1. CTR can be misleading.
Until recently, human beings did the majority of digital campaign management tasks. Today’s ad technology allows for computers to optimize campaigns on-the-fly based on real-time performance data. If you are only looking to increase CTR, you may miss the opportunity to drive ROI. If your digital campaign serves 100,000 ad impressions and delivers 50 clicks, your CTR is .05%. But if you’re looking for more clicks to your website, and your digital campaign serves 300,000 ad impressions to deliver 100 clicks for the same cost, your CTR is .03%, which is lower. Would you rather have twice as many clicks to your website, or a higher CTR?
2. CTR doesn't give the whole story behind a click.
Among the biggest problems with CTR is that it does not tell the entire story behind a click. It doesn’t tell you why a user clicked an ad and what happened after they clicked. You may celebrate a high CTR, but what if the people clicking on your ad aren’t actually in the market for your product? What if they went to your website and left without looking at a second page? And in the world of Zero-Click Searches (click here for more information), CTR neglects to assign value to the consumer who views your ad but doesn’t click.
3. A click does not tell you the quality of a visitor
Just because someone clicked an ad does not mean they are interested in your brand and will convert. Your CTR may be high, but you may have a low conversion rate. And isn’t that why you’re investing in digital advertising – to drive conversions/sales?
Measuring the success of a display ad campaign
If CTRs are ineffective in determining the performance of display ad campaigns, what can be used? Other metrics that can help you assess the performance of digital campaigns are:
- Reach: Shows you the awareness your ad is delivering.
- Conversions: Shows you quality, and not quantity
- Branded search: the number of searches for your company and products on search engines.
- Website traffic: number of visitors to your website.
- Time visitors spend on your site.
- Reduced bounce rates.
- Increase in sales
Contact Local Solutions for help analyzing the effectiveness of your campaigns.