How Valuable Is the Information Contained in Clickthrough Rates?

Individual ad clickthrough rates are little more than noise, and certainly not something that marketers would want their decisionmaking or performance evaluation to be based on.

SiriusDecisions benchmark data shows that b-to-b marketers spend up to 9 percent of their field marketing program budgets on banner ads. To measure performance, they often use clickthrough rates, since this is also the most easily tracked form of measurement.

Data analysis suggests that this may not be a good approach. In fact, HP researchers Suzanne Leighton and Sibel Satiroglu have found that clickthrough rates are a highly random, unreliable measure of effectiveness. They also found a statistically significant negative correlation between clickthrough rate and engagement rate on the destination site, with the latter measured as the ratio of engaged to unengaged visits.

But this doesn’t mean that online advertising is not worth doing. Researchers at Media6Degrees (m6d), a company that delivers targeted online display advertising using predictive modeling, indicates that the impression left by a display ad – even without the clickthrough taking place – may carry more valuable information in determining whether it will translate into a site visit within a certain period of time.

The data showed a significant effect on the conversion from impression to site visit. Furthermore, the effect was most significant for audiences that were targeted using machine-learning algorithms, compared to previous site visitors or untargeted audiences that had not previously visited the site. In b-to-b, m6d found a positive but widely varied effect on conversions based on the company analyzed.

While clickthrough rates may provide some information about the quality of the creative used, display advertising that drives relatively high clickthrough rates must be matched with a highly relevant destination site that meets expectations and drives engagement. Ultimately, marketers need to connect media behavioral metrics (e.g. impressions, interaction rate) with site behavioral metrics in a reliable way to warrant using them in decisionmaking. With the right measures in place, marketers will be one step closer to improving their prospecting efforts.