Click Thru Rates Declining? Take AIDA, call me in the morning.

Measuring What Matters

A call to return to basic marketing discipline

A recent article in OMMA (Online Media, Marketing & Advertising) discusses declining click-thru-rates (CTR) and how publishers are aiming to prop up ‘impressions’ again as a sellable metric to advertisers fleeing online display advertising for PPC search ads.

The article cites quotes from media buyers and advertisers alike, all searching for an answer to online display ads where average CTR is approaching or at 0.1%. Catharine Taylor does a nice job of summarizing the situation and what publishers are considering as potential solutions to this issue they’re facing – such as extra large display units (XXL). It seems, however, we could and should evaluate the current situation facing the industry from a different perspective altogether.

Consider the very elementary marketing principles of reaching, communicating with, persuading and convincing an audience to make a purchase. In this case I’m speaking directly to the AIDA model developed by Elmo Lewis long ago that holds true to this day, where:

• A = Awareness
• I = Interest
• D = Desire
• A = Action

Bringing this back to a discussion of advertising / marketing metrics, I contend we evaluate the above based on the following:

• The Awareness (phase) is a measure of audience Reach
• Interest and Desire phases indicate the degree of Engagement and, finally,
• Action is measured in terms of Conversion

That may be overly-simplistic, but to-date it’s worked quite well for us and for our clients. We’ve managed to achieve a great deal of online advertising and marketing success because the programs we propose and implement for our clients are focused on the strategic imperatives at-hand; for instance, if our client strives to establish top-of-mind awareness and presence for their brand in a new market, then we can safely assume that impressions/audience reach is one metric that would be indicate goal attainment. Of course there are other indicators of success for such a program – brand recall, message association, opinion shift, are all acceptable as well.

Likewise, if our client has determined their site visitors are more likely to make a purchase when they spend X-amount of time on site or visit Y-pages or interact with Z-content in the site, then we’d employ a set of tactics and messaging that would drive these metrics north. Whereas impressions indicate audience reach and are further supported by site visits and monthly unique visitor site metrics, we argue that time-on-site and average visit depth are indicators of visitor engagement. We established earlier that Engagement expresses customer Interest and Desire.

Similarly, the Action phase of the purchase process indicates Conversion. In an e-commerce world, conversion equals revenue/orders. In offline sales situations, it’s widely accepted that online conversion is defined as visitor actions that have been accurately determined to eventually lead to sales; in other words, leading-indicators of sales or key performance indicators (KPI’s.)

Finally, if CTR is the only definable metric for online display ads that advertisers care about, then sure, the 0.1% CTR is pathetic and unacceptable. However, the article is written expressly for site publisher’s and agency media buyers where both constituencies are significantly impacted by poor ad unit performance and by the lack of advertisers willing to accept such anemic metrics. For publishers and buyers, it’s understandable that they search for an angle, an effective message to bring clients back to the table.

However, I argue that the best publishers and media buyers are focused on their client’s needs (Reach, Engagement and Conversion) and that a focus on matching advertising vehicles with client’s strategic imperatives (Awareness, Interest, Desire and Action) will lead to these outcomes:

• Ideal placement of ad units for optimal success
• Agreement on the appropriate type of buy: PPC, CPM, CPA, etc.
• Identification of success metrics and KPI’s for the various phases of the purchase process – AIDA

If we’ve arrived at the place where advertising clients, media buyers and publishers have the same objectives and they’ve selected the appropriate media and metrics, then we’ll witness a collective, rising-tide of client success thru ad unit engagement.

So, choose your advertising agencies, media buyers and publisher sites carefully. Be wary of agencies and web sites that seek to discount poor performance as ‘industry average’ or those who improperly promote impression-based metrics to mask subpar customer engagement. If this statement resonates loudly with you, then it may be time for a wholesale change with the people who are supposed to have your best interests in mind.

Instead, demand to work with agencies and publishers that listen intently to your objectives and your strategic imperatives. If they match your needs to the AIDA purchase process and assign appropriate campaign metrics, then you have all the makings of a successful partnership.

How do You Measure PPC Campaign Success?

When faced with this question, some online marketers might tout their AdWords figures such as impressions, clicks, click-thru-rate or cost-per-click. Others might build on that answer by offering that visits from paid search to leads and to conversions. Those online marketers with e-commerce operations would of course point to SALES.

Now obviously, none of these answers is incorrect. However, these are merely responses to the question asked. While I dread the “it depends” response to a rather benign question, the answer has as much to do with the objectives of the campaign as to the financial metrics we might use to gauge the results.

Now, consider the business objectives that you aim to achieve. Those true business objectives don’t include CTR or CPC as key performance indicators KPI’s. Click-rate and costs are factors we can manage to increase our marketing effectiveness.

Leads (conversions) and sales are indeed key performance indicators. However, I’d like to point out there are other measures that may be important to helping you achieve your objectives.

Recall business goals and strategies. Your organization may strive to

·         Create awareness for a new product or service

·         Differentiate your products by communicating features/advantages/benefits

·         Encourage trial of your products or test them out (test drive or purchase samples, for instance)

·         Drive  sales

So, if your business objectives include awareness, interest and preference, desire, trial and sales, then why are we measuring PPC search (marketing) campaign success by click-through rate (CTR), cost-per-click (CPC), leads, and sales?

In our experience, CTR and CPC metrics are just the surface of the true value of a well-managed search marketing program. We’ve been able to demonstrate that search marketing can be and should be measured by any and all of the following.

·         Un-branded vs branded impressions

·         Unique visits

·         Time on site / depth of visit

·         Downloads

·         Task completion

·         Opt-in

·         Contacts (phone/web form)

·         Quote request

·         Purchases/Sales

If marketing objectives include expanded reach or deeper visitor engagement, then the addition of the above metrics will help you better understand the total impact your paid search campaigns are having on your business.

To test this out, go into your web analytics application, Google Analytics or Omniture’s SiteCatalyst or other, and set up two reporting segments to compare the above metrics for (1) visits from paid search and (2) all other visits. What sort of trends and patterns do you notice? How do these segments compare?

If someone questions the value of the paid search marketing program in your company, then the additional metrics above should help build that value story for you.

So, how WILL you measure your pay-per-click search campaigns from now on?