Engagement metrics evolve beyond CTR along with Web display ad technologies

The New York Times ran an article on May 31 titled “Put ad on Web. Count clicks. Revise.” However, most savvy online marketers and Web publishers have known for some time that it’s not nearly so simple to measure the effectiveness of online display ads, and developments in Web analytics and rich media are driving innovation in the space with the goal of providing more exact ways to examine how ads affect online consumers.

“The notion that, ‘If someone doesn’t click on an ad, the campaign has failed’ is totally illogical from a display advertising perspective,” says Dean Donaldson, digital experience strategist for Eyeblaster. “Clicks are in serious decline — something like three in a thousand — and I refuse to accept that the other 997 people who saw the ad are worthless.”

Donaldson and Eyeblaster have developed a metric called “dwell time,” which he asserts gives a fuller view of how consumers respond to ads.

“You can’t say, ‘this many people are looking at a billboard or a TV ad,’ but we can measure this online,” he explains. “What consumers do as a result of [seeing an ad could be] click, search, or go into a shop and buy. They may go the client’s site, or they may buy it on Amazon. But we want to know, did they see they ad, what percentage played with the ad. It’s not always about going to a Web site.”

Looking at interaction is very valuable for marketers, agrees Mitch Spolan, VP of North American field sales at Yahoo — especially as ads themselves are becoming more complex and offering a number of different ways to engage users beyond simply inducing a click.

“When you can run rich media — when you can mouse over an ad and watch a video or fill out a form — it’s like a mini Web site delivered to the right user,” Spolan says. “It’s not uncommon to have an interaction rate of 10% vs. a click-through rate of .10%. It’s not like I can just get a click-through rate of point-two and everything will be OK — it’s about making an impact for my business, and if I can design the display media in the right way and measure the time that I have people engaged one-on-one, that’s a very powerful way to measure display media.”

From a marketer’s perspective, it’s important to define metrics that fit the specific goals of the campaign, says Sean Cheyney, VP of marketing and business development at life insurance broker AccuQuote.

“There are a lot of companies out there still focusing on click-through rate, but it depends upon the objectives of the campaign,” he says. “Depending on objective, the most important thing is the number of impressions served divided by your conversion metric.”

Further complicating the value of click-through rate is that it does nothing to explain what goes on once consumers reach a marketer’s Web site. An accidental click is weighted the same as one that leads all the way to a sale. And, the profile of a regular clicker may not be the target audience for all display advertisers, as Starcom USA, Tacoda and ComScore found in their joint Natural Born Clickers study. That study, which was released in February 2009, found that, “heavy clickers are not representative of the general public.”

“The type of people who do the clicking may not be the most valuable people — there may be a lot of clicks, but there may not be purchasing,” explains Kim McCarthy, research and analytics manager for Starcom USA.

There’s also the chance that a consumer could reach the Web site through a search either immediately upon seeing the ad or further down the road when they are ready to make a purchase, she continues — either way, the display ad contributes to a sale without ever being clicked by that buyer. That’s where serious back-end analytics come in, notes Emma Pop, associate director of research and analytics for Starcom USA. She points out that successful online marketers are already well on their way toward implementing these analytics on a wide scale.

“In terms of getting outside the heavy clicking profile, the marketers doing in-depth analytics are already going beyond that,” Pop says. “Click-through rate is relevant when you’re trying to drive people to a site, but it’s only one of the metrics that you’re using. Your analytics determine what’s happening there: am I getting the right people, am I leading them to the right page, are they purchasing.”

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