We at CellStrat are in research and I personally always hated clicks model in online advertising world. WHY???…
For the simple reason that clicks are so costly and often without desired results . Industry, mostly has not seen better than 0.1% click through success rates for ages. Ad networks tout success at a 0.05 percent click-through rate. Still, advertisers and publishers run for them. What’s the use of these, when the first time a person sees a banner ad is the time, they’re most likely to click. But ad recall happens after five impressions, and changing purchase habits takes even longer. How on earth can the research reports be promoted online on so costly real estate.
We also organise conferences around our research themes like the one we are organising now aptly titled India Digital Forum on digital media (our latest research area). Our last conference was Mobile Apps Conclave in Bangalore organised around our recently concluded Mobile Apps Research. I tried promoting this conference for the first time on inMobi mobile ad network as Bangalore was a new area for us and deliberately chose CPM model instead of CPC. I made sure that banner ad contained complete information about date, venue, theme, website etc. ad received a whooping 1.83 million impressions just in 3 days time which was amazing against just 33 clicks. We also got a few attendees who mentioned about seeing our ad on mobile ads which was satisfying enough to make my belief go stronger in CPM model. I fail to understand how can companies spend millions even billions in CPC ads when there is so low success rate.
Today I read an article on reasons why people should hate the click by Peter Platt, the President of Tipping Point Media. Below you can find briefly, the main points given by him and you may relate them directly to my above example:
Reason 1: 99.9 percent of banner ads don’t get clicks.
Reason 2: As cost erodes, so does content quality.
Reason 3: Clicks and sales are not the same thing.
Reason 4: E-commerce is not the centre of the economy: People research online, determine their product interests and needs, but then go to retail to buy.
Reason 5: Cost-per-click comes at the cost of targeting: Since the early days of online advertising (late 90s), there’s been a lot of interest in only paying for response — thus, the advent of cost-per-click (CPC) marketing. After all, what marketer wouldn’t want to only pay for response? But the problem with this approach is that all too often, CPC ads end up being targeted to people who click the most, instead of being targeted at your desired audience. The typical outcome of this type of effort is a sudden increase in response, but no noticeable increase in sales.
Reason 6: Clicks are contrary to every other media effort: Ever wondered why advertisers keep on advertising day in and day out on TV? TV ads interrupt the flow of a program, but they don’t expect an immediate response. Then why is online advertising held to a different model?
It’s more about exposure then clicks… Advertising is about building awareness, consideration, purchase intent, and — yes finally — sales.
So stop focusing on clicks and instead work a little harder to demonstrate business impact. It’s there. You just need to look a little harder.
July 21st, 2011