When it comes to Digital Advertising, it can be difficult to calculate ROI. Traditionally, marketers would measure the success of their campaigns based on the rate at which users would click on their ads, but the average CTR on display ads is only 0.35%. While this seems like a logical approach, Click Through Rate isn’t always as accurate as you may believe and it doesn’t tell you the whole story.
This example from Mason Digital explains it perfectly. If your digital campaign serves 100,000 ad impressions and delivers 50 clicks, your CTR is .05%. But if you’re looking for more clicks to your website, and your digital campaign serves 300,000 ad impressions to deliver 100 clicks for the same cost, your CTR is .03%, which is lower. Would you rather have twice as many clicks to your website or a higher CTR?
You could have an exceptionally high CTR, but just because someone clicks on an ad it doesn’t mean that they have any intention of purchasing the products or services being advertised, and it definitely doesn’t mean that conversions are being achieved. People may click on them just because they are curious, or even by accident.
It may not even be a person at all, it could just be a bot. Say you run an ad and it has a CTR that is below your standards. Does that mean that the ad didn’t work and you should stop running it? Absolutely not. If someone doesn’t click on an ad, it doesn’t mean the viewer wasn’t influenced by it.
A lot of viewers don’t click on ads at all. Instead, they see the ad, and then look up the company being advertised and make a separate search. Maybe they will remember the ad in the future when they have a need for the product. Just because you aren’t seeing the click rate you were hoping for doesn’t mean that the ad isn’t working.
Some more reliable indicators that a campaign is working are metrics such as increased website traffic, increased time on site, conversions, and the number of searches for your company or products/services on various search engines. Make sure your organization is putting value on impressions. Clicks aren’t the only measure of the impact an ad has, but the number of times it renders on a user’s screen. It’s important to track the number of times people saw the ad and monitor the activity on your website after ads have run.
Then you can review the analytics, see what worked, and see what needs to be changed which will make it easier to produce quality ads in the future that lead people to your site. While it can still be a useful measure of campaign success, it’s important not to put too much weight on CTR, and to take into account all the different ways to identify the efficiency of your advertising.
