Is the CTR Dead?
'Not everything that can be counted counts,' is an oft repeated Einstein quote, and it's a phrase that would accurately sum up the debate on one of the venerable statistics of the digital world, the click thru rate.So why is the CTR getting such a battering? Is it simply a cynical ploy used by advertising professionals to excuse ads that aren't delivering the CTRs they once were?In fact, research by ComScore and Sequential Media has proved that the CTR is an extremely bad predictor of conversion.The study involved the analysis of 263 million impressions over 9 months across 18 advertisers in numerous verticals. It gave a number of online ad measurement criteria a conversion correlation score, where 1 equaled the strongest possible correlation and 0 equaled no correlation at all.Of all the performance metrics measured, CTR performed the worst with a correlation score of 0.1. Impressions didn't fare much better with a score of 0.17 - perhaps because it doesn't take account of impressions that are delivered below the fold.The highest performing metrics in terms of correlation were found to be hover/interaction (correlation = 0.49) and viewable impressions (correlation = 0.35).This study is not the only one to question the CTR either. Back in 2010, a MediaMind study found that dwell time and dwell rate with online advertising was a much better predictor of eventual conversion than a click. A year later, Casale Media’s 2011 “Ad Visibility Report,” found that “ads appearing above the fold were 6.7x more effective at generating conversions than those appearing below the fold.”So why is the CTR so frequently used? Firstly, because it's so simple - it's the one metric that both the publisher and the client, once that click hits their site, can both measure. Metrics such as viewable impressions and ad interaction/dwell time/rate require more time and investment.It's prevalence may also be related to the dominance of paid for search in digital budgets. Marketers will use it when looking for easy ways to compare digital disciplines for budget allocation purposes. The CTR certainly isn't dead for search - it makes more sense for ads that are generated as a result of consumer intent and work primarily at the 'action' end of the purchase funnel (although the relevance of CTR for more generic, top of the funnel search terms could be questioned).But online advertising is different - it's primarily a top end of the funnel activity which builds awareness and purchase intent, and it makes sense to apply metrics that more close measure these effects (awareness = ad viewability, intent = interaction and dwell time/rate) than those which measure effects that online advertising is less well suited for.Of course, the ideal solution is to take a holistic view and look at online advertising as part of the whole journey through to purchase. Although it takes time and effort to set up, we'd advocate building systems that incorporate front end metrics such as viewable impressions and back end metrics such as conversions via your site. Then you'll fully understand the role that online advertising and your other digital activity is playing in moving consumers into and through the funnel to conversion.What counts can be counted. It just takes a little more time and effort on behalf of agency and client. But in terms of optimizing digital budgets, that effort is worthwhile.