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Are click-through rates a waste of time? Shock figures in US report


By Noel Young | Correspondent

April 24, 2012 | 3 min read

How successful are click-throughs in converting your online display ads into meaningful business? Almost not at all, most advertisers seem to agree.

Analysed 260 million ad impressions

Now a US study has revealed that when a user clicks on an ad, the correlation between that click and a conversion is virtually nonexistent, according to a report in AdAge.

The study was carried out by the startup Pretarget and ComScore,the internet marketing research company.

Over nine months, Pretarget analysed 260 million ad impressions across the campaigns of 18 advertisers, the company said. They tracked conversions - from filling out an online form to downloading software.

Their findings: Pretarget found that the correlation between clicks and a conversion was 0.01, just about as low as it could go..

At the high end of the correlation spectrum for the metrics tracked was what the companies referred to as "ad hover/interaction." This is when a web user moves his or her cursor over an ad, thus "engaging" with it. That registered a correlation of 0.49.

The findings bolster the view that it's time the industry makes a serious move away from measuring campaign success based on click-throughs.

Says AdAge , "this foundation of online display advertising looks more and more flawed by the day."

Pretarget founder and CEO Keith Pieper said, "My key takeaway is that optimizing to viewable impressions or hover time is a better proxy for a brand advertiser than a click-through rate."

ComScore VP Kirby Winfield said the findings could push direct-response marketers to focus on metrics that have largely been the domain of brand advertising.

"Metrics like 'hover' and 'view' that have typically been thought of as more brand-focused metrics actually can end up being super appropriate for direct marketers," he said.

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