The Value (or not) of a Click

My co-worker and friend Scott Hoffman wrote a piece about how agencies and marketers value success in online media.  There are still many people who think a "click on a banner (CTR) is the holy grail of internet advertising."

You see, Scott was an early employee at Yahoo!...he was one of the people who helped Yahoo deliver results (revenue) as well as "scale" their sales organization....and, he did it from the lean days of working with the company in it's initial stages.....

I have tremendous respect for Scott, and his accomplishments at Lotame have been nothing short of, "heroic and amazing..."

Below is his view on judging online media based on "clicks."  I wanted to share it with my blog readers, because I believe it has a ton of value, makes alot of senses....and is just plain correct.

The click regime must be overthrown:

(A manifesto for online marketers to reach the elusive majority of non-clickers)

By Scott Hoffman aka “ScottyRocksBig”- March 3, 2008

In today’s world of online media, a consumer is far more likely to see a “catch the gorilla” banner than to see an advertisement their purchasing patterns. Why is that? Why are advertisements geared toward “tricking” the consumer to click the prevailing norm? What makes a brand think that a “click” is the most relevant measurement of success?

The Answer...the online advertising economy rewards marketers and publishers on the click. In the same way Pavlov’s dogs reacted by salivating to the sound of a bell, industry executives drool when they see high CTR’s even if there is little relevancy behind it.  The click has become the great arbitrator of value within a media campaign.  Effectiveness of entire online media schedule’s are judged on the great and mighty click. Online giant, Google, has generated tremendous wealth from this simple action.  We have all become really good at generating clicks. This is the point in the evolution of media however, that marketers need to realize that even though they still salivate when the “bell” rings, there may not be food on their plate! 

Click, Click, Click…

But what is a click? Ask anyone around you (or even yourself) and they will emphatically tell you that they “never click on a banner.” Guess what, now there is research available that supports your friend’s claims. According to a Jan 2008 study conducted by Starcom MediaVest, only 6% of the web population has been “trained” to click on ads.  That leaves 94% of us outside the marketing feedback process. Think about it, who is going to click on an advertisement about bleach?

Now ask the non-clickers how they decide on which restaurants they frequent, what cars they drive, what laundry detergent they purchase. They will have hundreds of different answers.  Not one of them, however, will say that clicking on an advertisement was part of their decision making process. According the click regime, these individuals representing 94% of the purchasing power and revenue dollars, aren’t important because they didn’t “catch the gorilla.” 

A Lesson from the Past

So how do you really measure the impact online advertisements have on consumers?   If someone simply views an ad does that directly impact them? I personally believe that for the vast majority of the online population, seeing advertisements alters purchase intent. To clarify, just think about the advertising theory of old which (some call it common sense), that says consumers cannot want what they do not know exists.  So that brand new MP3 player with all the new features will never sell one unit unless people are aware of it. End of story, that’s it and everything else is just gravy. 

My father, who was a successful clothing retailer his entire life (and never once took a marketing class) imparted this pearl of wisdom to me when I helped him out in our store.  “People only buy the clothes that we display on the shelves, not in the stock rooms, fill up the shelves.”  In other words make people aware of your products.

Stop it with the Click already…it’s annoying…and lazy

I know that it is technically easy to measure to a click. It is also technically easy to measure almost any activity that a user does on a web site after a click. Truth be told, it’s pretty easy to measure anything, if the user reacts to it. Existing web marketing companies have become very good at it, but I am proud to work for one that is advancing how and what is measured.   We correlate user engagement and behaviors and layer that data with surfing patterns.  This allows us to build the most customizable and targeted audiences that “look like” the people who clicked.  The trick becomes measuring the impact of advertising on the users who didn’t click. Positioning, brand appeal, consumer acceptance, marketplace conditions…these are outside of the prevue of the media executive today…what is within our reach is to deliver these advertisements to an interested audience thereby increase brand awareness.

Share of Mind

The success of a media campaign should be evaluated on how effectively a marketer can tap into the intelligence of a consumer.  In the analog world it’s easy.  Think about a ½ hour Sitcom TV show.  If an advertiser delivers a :30 second commercial within the show, the viewer spent 1.6% of his/her time being made aware of the product or service being promoted in the commercial. In the online world the math is a little more complicated, but with the automated nature of the web, those data points to calculate are much easier to come by. Being able to gauge whether a marketer has commanded share of mind with a consumer is far more valuable than understanding a click. 

Don’t buy it? Don’t believe the hype? That’s fine, last night I went to a movie which was heavily advertised on the internet and I never clicked on the banner, go figure. 

More to come…

Scott Hoffman - CMO/Lotame

Comments

[Brian T]

I couldn't agree more with this but I think there is a continental divide in most ad salespeople's heads right now. When getting challenged on the click vs view question they decide to drive hard and fast in one direction or the other. I think there is validity to the click, but not the conventional click. Click as an interaction, a mouse over, or a brand interaction. Getting the user to acknowledge the ad on the page drives much more purchase intent or brand favorability down the road. Using this as a middle ground and tracking interaction-to-conversion...now that's something that is palatable to agencies and DR focused clients as well as a logical assumption. I think in reality agencies and advertisers don't need the direct path click and convert in one session to justify their media spend. They just want to have a little bit more compelling evidence that the user was actually behaviorally impacted by the ad. They want a story to tell that their creative advertising concept and campaign is driving more sales or more brand adoption. This requires creative designers and flash developers to integrate with ad-servers and purchase tracking software. This scares adservers because it starts rocking the boat of the whole "last view" philosophy that is being adopted across our industry. That said, I think if adservers start opening their eyes to more sophisticated tracking the ad revenue will follow and from a tracking and media spend justification budgets will open up to truly realize the impact of internet display advertising.

[Andy Monfried]

Great points Brian, and incredibly insightful....thanks.

[Scott Hoffman]

Brian, I don’t know you personally…but I am sending some eLove way. You are dead on with your comments. Yes I agree, I think the biggest hurdle (and biggest opportunity) is to think about measurements for success of online advertising utilizing methods that divorce themselves from the click.

Today's measurement of success is based on the “conventional click"...it is a simple and easy way for marketing professionals to "validate" their expenditures. It is a very pragmatic approach to marketing.

And this is the crux of why I wrote the post. As an industry, we have been trained by the successes of “click” based organizations. In their economy the click/interaction is the real commodity. This is so pervasive that some of the rest of us have dismissed that the real commodity is the amount of attention that a marketer can garner from a consumer. The real opportunity is how we measure the gained attention…

I don’t have the answers (and I don’t think that there are absolute answers) but I cringe when I think that we will bias our thinking about these new measurements with a click/interaction.