“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Craig Kostelic, head of digital at Bon Appétit & Epicurious, The Food Innovation Group
Although many have noted the shortfalls of using click-through rates (CTR), premium publishers still fall victim to the pressure of direct-response metrics that place an overemphasis on click attribution.
CTR was one of the only metrics available in the early days of the Internet, and it works as a key measure of success for search advertising. Logic may suggest it must still be a lead barometer for all other types of digital advertising, but its use is merely an easy way to break everything down to a common denominator and do “apples-to-apples” comparisons based off a single key performance indicator (KPI) to optimize media mix.
Yet even though research has shown that clicks offer the lowest correlation to conversion of all the non-search digital metrics available, premium publishers continue to be handcuffed by the need to deliver efficient eCPCs as they try to renew or attract business.
Fighting The Wrong Fight
The governing principal of any advertising initiative needs to focus on what motivates and drives the audience marketers want to engage in any given environment. From a macro perspective, everything on any given web page is competing for a user’s attention at that moment. The more aligned an advertiser is with the value that environment provides, the higher likelihood they can make the type of connection that creates the consumer relationship brands are trying to achieve.
Search, for example, follows this ideology by serving advertising that mirrors the value of the organic product by providing relevant text links that provide useful information based on a specific search query. Display banners do not function this way in any type of environment. Efforts that focus on using display as a tactic to drive search-like KPIs are misguided.
All Attention Is Not Created Equal
There is a correlation between the quality of a brand and its content and a consumer’s engagement and attention within that editorial environment. The higher the quality of the contextual environment, the less likely a user will engage with advertising that does not reflect the core value proposition being sought by the consumer. This is due to the focus that the editorial area commands vs. the disconnected form and function of the advertising.
On the opposite side of this spectrum are editorial brands that are not as highly regarded. They tend to have lower engagement rates, while ad units that do not mimic editorial form and function will draw more attention.
This can result in higher CTRs on standard display creative in these sub-par environments. Furthermore, lower-quality editorial environments tend to have lower advertising rates. When you combine higher CTR performance and lower ad rates on properties that fit this description, an apples-to-apples CTR KPI comparison would show that higher-quality advertising environments with higher consumer engagement are always less efficient.
Using CTR as a lead metric could lead some to optimize digital media budgets into sub-par editorial environments where consumers are less engaged. This approach is fundamentally flawed.
I would never argue that there isn’t a place for CTR or direct-response types of metrics in digital advertising. My issue is the use of direct-response metrics to measure success of digital media buys with premium content providers.
A reliance on CTR can complicate the efforts of industries having trouble defining their brand equity and making an emotional connection with an emerging, digitally savvy millennial audience that believes the products they consume define who they are. A media strategy rooted in optimizing spending around demand response-based KPIs can fall short with consumers who above all want a connection with a product, with low price and convenience being an added value benefit, not the core value proposition.
I don’t want the ease and convenience of a “one-metric-fits-all” approach to limit the incredible amount of ways marketers now have at their fingertips to entertain and add value to their desired consumer.
There has never been more of an opportunity for marketers to increase awareness and shift perception. The possibilities abound, including computer vision technology that automates the rendering of in-feed, native advertising placements and new branded content divisions that allow marketers to tap into world-class editorial resources to deliver engaging storytelling and beautiful imagery.
Understanding what metrics correlate to success in an increasingly fragmented digital media landscape requires never-ending persistence. All we can do is continue questioning industry norms and ask if they are actually showing the results we need to move our business forward.