Marketers 'addicted to CTRs'

24 September 2014

NEW YORK: Marketers need to wean themselves off an "addiction" to click through rates, which in themselves are a poor indicator of an ad's performance, research has suggested.

A study carried out by market research giant Nielsen for xAd, the location marketplace, analysed the performance of 80 mobile campaigns from 12 national brands that ran on the xAd platform. Campaign success was assessed on various measures including click-through-rate (CTR), secondary actions such as calls and navigation and the uplift in in-store visits.

While CTR is a common way of measuring engagement in online advertising, it totally fails when used as the sole metric for success in the mobile context, where it is "glaringly inaccurate", according to xAd.

"Not only do small touchscreens often lead to accidental clicks, inflating CTR, but the metric also fails to capture post-click engagements," it said.

Quite apart from simply measuring clicks, many marketers may be trying to optimise mobile display ads to generate those clicks, noted Marketing Land.

The study showed that that CTR appeared to be completely unrelated, or even negatively correlated, with Secondary-Action Rate (SAR), while lower CTRs were often associated with the highest lifts in store visitation rate.

"In the same way that marketing needed to be re-evaluated at the advent of PCs, the mobile advertising industry needs to rethink mobile campaign measurement," said Monica Ho, SVP of marketing at xAd.

"With most purchases still happening offline, one of the primary goals of any mobile campaign should be to drive in-store traffic and sales," she added. "Clear indicators of purchase intent, like SAR and Store Visitation Lift (SVL), provide the most accurate picture of how well a mobile campaign has achieved this."

In fact, SVL, or the percentage of ad-exposed audience that visited a retail location divided by non-ad-exposed visitors, appeared to be the best purchase indicator for all verticals, with SAR a close second, according to the report.

Given the variable relationship between the metrics and the fact that optimising towards one often negatively impacted the others, xAd emphasised the importance of selecting the correct Key Performance Indicators (KPIs) for a campaign before it began.

For example, the positive impact of optimisation was most extreme for SAR, where this measure increased by up to 200%, while at the same time decreasing CTR by 25%.

Data sourced from Marketing Land, xAd; additional content by Warc staff