Yikes. At first glance it looks like most consumers don’t give a damn about banner ads. ComScore is reporting that the number of U.S. internet users who click on display ads is down 50 percent. Back in July 2007, only 32% of all users clicked on internet banners in a given month; by March 2009, that number had plunged to only 16%, and 8% of U.S. users drove most (85%) of all clicks.
So other than knotting a noose, how should you, a marketer in charge of internet advertising, react?
1. Don’t be scared by concentrated results. Recognize that all response behavior follows power laws, the Pareto idea that a fraction of any resource drives the greatest return. You know, like the 10% of folks at your weekend party who get wildly drunk and make out on the deck while the rest stand in the kitchen sharing tips on accounting. Sure, in a given month only 1 out of 6 people may click on an ad, but that doesn’t mean the rest of the population never does. The concentration of clickers is a normal power cluster, just like those found in your stock portfolio.
2. Measure ahead of the click. As comScore suggests, clicks by themselves are a lousy metric for monitoring total online ad performance. Ad impressions build with reach and frequency and over time lead to action, usually in other channels. We’ve seen the inverse for clients who have launched campaigns on television and driven brand-specific searches through Google. A recent study of 8,824 respondents in the U.S., Brazil, Germany, Japan and the U.K. found TV had the most influence on audience purchasing decisions, even though it is typically one of the hardest media to track. Impressions here push action over there. Banner ad serving tools can track consumers who see your impression and then come in later via search engines. Social media monitoring tools can tell you the chatter among influencers. Find ways to measure the waves, not just the splash.
3. Watch impression costs. If you do begin evaluating internet ads on impressions and not just click performance (or downstream conversions, etc.), you must be careful with costs. Online ad inventory has exploded in recent years, led by social media pages whose users refresh frequently, artificially bloating inventory (think of a Facebook user rechecking her page every 60 seconds, each page with multiple ad slots). Careful online media planning can reduce costs against a given demo target by 90%, often by weighting the buy toward ad networks (collections of hundreds of sites) vs. individual marquee sites. A CPM of $1.50 instead of $30 against the exact same target should be a no-brainer.
4. Optimize, even if hard data is limited. Clicks still matter, in terms of monitoring variances in performance between online media outlets and then optimizing the ad mix. Sure, only a fraction of your prospects might click on your ad, but if costs per click have a 20-to-1 skew across your online media plan, that’s an indication that some of the media venues are working well and others are bombing. Clicks and the associated downstream conversions, sales, and return on advertising can be monitored through each discrete online component to gradually improve the campaign performance — often freeing up 30% or 40% of your ad budget for redeployment.
Sure, not everyone walks through your online banner doorway; but evaluating the ones who do to rebalance the mix will provide lots of impressions where they count — on the CEO who watches your sales figures.