Hitmetrix - User behavior analytics & recording

Still Hung Up on Click-Throughs?

It’s 2001, and online marketing is no longer a new phenomenon, though we still seem to treat it like one.

For the past two years advertisers, publishers and agencies have struggled with strategies and technologies to turn this unique medium into the definitive marketing tool that it should be. They haven’t found the grail, and the jury that has been out on the effectiveness of online advertising is getting cranky. They’ve got the wrong guy. The problem is not the medium — it’s the way we’ve been using and measuring it.

Despite the recent press, online advertising is here to stay. And it’s set to become a growing slice of a broader digital marketing boom estimated at $63 billion by 2005, according to Forrester Research’s January 2001 report “Online Advertising Eclipsed.” In fact, online marketing budgets are set to double by 2003. With all this promise, isn’t it about time marketers put click-throughs to rest and started taking a more meaningful approach to measuring the results of these large investments?

Once upon a time, click-through rates were considered the best standard for measuring the performance of an online ad. Click-throughs, however, much like TV’s Nielsen ratings, show only how many people view an ad. At a stage in our digital evolution when driving traffic to a Web site was critical to a business’ valuation, this was considered a valid tool — except that users got frustrated with being forcibly dragged to URLs by these ads and became loath to click on them. Over time, click-through rates have shrunk to 0.25 percent, according to the Interactive Advertising Bureau, down from 8 percent five years ago.

Enter interactive and rich media ads as a means of creating more dynamic user experiences. The word “ads” doesn’t capture what these things can do. They are capable of anything that a Web site can offer with call-to-action features like video and sound. These features entice surfers to interact, and fulfillment technologies allow them to conduct transactions within the ad itself.

Sure, it has taken marketers and their agencies time to figure out the best technologies and execution. Even today, this learning curve continues as technologies for the creation, targeting, optimization and measurement of rich media ads become dramatically more powerful. To borrow from Mr. Kent (Superman’s dad), “with great power comes great responsibility,” or in this case, great amounts of information, new kinds of information that require a higher and more thorough understanding of what users are doing as they interact with digital marketing.

With the acceptance of rich media, a shift has begun in the measurement and valuation world. Companies are beginning not only to measure traffic but also customer interaction and acquisition. For example, did a potential customer sign up for e-mail, a newsletter, enter a contest or register for custom stock prices to be sent to his inbox? This important transactive element provides marketers with deeper customer data and behavioral patterns enabling them to further marketing efforts. And so, cost per acquisition became an important new measurement standard alongside click-throughs, enabling marketers to witness more meaningful return on investment.

However, for many Fortune 1000 marketers still grappling with online marketing strategies, this is still not enough to justify the millions of dollars being spent. While measuring customer acquisition is a move in the right direction, we must start examining “customer share” as a truer evaluation of the effectiveness of online marketing. By customer share, I mean a definitive and continuing connection with a customer. This can be measured by the percentage of purchasing or transacting a client performs at a site following his or her interaction with an ad.

Take Amazon, for example, which learned early on that there was only so much share of each customer it could get with books. Customers would go elsewhere to buy gadgets, gifts, CDs. To get more customer share from its base, Amazon quickly expanded its offerings. And this became reflected in its online marketing using ads not only to highlight a product, service or site but also to get users “acquired” to get the most share from them. Isn’t that the point of marketing?

Online marketing planning and measurement must be joined at the hip with business development strategies, not just a pretty add-on. This requires complex and agile marketing development and, critically, working with partners that offer a strong armory of technology solutions to support hard business goals.

To maximize customer acquisition and share, advertisers must work with marketing service partners to design strategies that deliver brand awareness, interaction and even e-commerce capabilities. Advertisers should establish measurement parameters and goals, ensuring that their partners use the sophisticated, learning-based technology solutions available to target, traffic, optimize and measure your campaign’s performance. Demand that they deliver campaign analysis in real time.

Using these powerful technologies will enable marketers not only to measure the reach of their online marketing but, most importantly, they will allow the campaign to be intelligent and nimble. This means optimizing ads that are not performing creatively, placing them on sites at the right time and position for maximum effect, delivering results on the fly — and providing customer data to further enhance follow-up marketing.

The result? A better, smarter return on marketing dollars. All of a sudden, those click-throughs are not quite as appealing. Do yourself a favor and add more meaning to your measurement. You, and the boss, will be delighted with the ROI results.

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