This blog cross-posted at iMedia Connection on July 18, 2011.

As online marketers, we’ve long touted the benefits of online marketing as being the most measurable form of advertising. While in theory there is some validity to the argument, the reality is we spend most of our time focused on a relatively insignificant data point — the click. The click was the metric touted in the very first paid banner advertising when AT&T asked: “Have you ever clicked your mouse right here?” At first glance, clicks seemed like a metric that made sense, but when you dig in, you realize there’s a lot more to be looking for.

Reason 1: 99.9 percent of banner ads don’t get clicks
What other industries base their success on a metric where the industry average response rate is 0.1 percent? My best banner campaign ever had a 5 percent click-through rate. Now this was in the early days of digital marketing (1998), but it’s been a long time since we saw response even close to that. Ad networks tout success at a 0.05 percent click-through rate. It seems to me that the impact we have on the other 99 percent of the audience is going to be much more important.

Reason 2: As cost erodes, so does content quality
Using clicks as a core measurement has driven down the value of online media. A long time ago, I paid $50-plus CPMs to reach highly targeted niche audiences. In hindsight, perhaps we paid too much, but we also saw a benefit in a higher level of quality content. Those destinations had dedicated web reporters, new content came online first, and many sites started to shine as the best place to get news and information. But with clicks as the primary success metric, publishers were forced to lower their rates and in turn they have fewer resources to provide quality content.

Reason 3: Clicks and sales are not the same thing
Low click-through rates have killed many successful campaigns over the years. I’ve seen many campaigns get pulled because of low click-through rates and then months later seen shifts in sales trends during the timeframe the online campaign was running. The problem stems from the fact that sales data typically don’t have the immediacy of online ad data. So decisions get made based on what’s available immediately instead of looking at the whole picture.

Reason 4: E-commerce is not the center of the economy
Online sales account for roughly 7 percent of U.S. retail sales. So, unless you’re selling airline tickets or books, there’s a pretty good chance that more than 90 percent of your business occurs in the offline world. It’s hard to track click response to offline sales, so we tend to align our impact with e-commerce sales and miss what’s happening at retail. 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.

Now, I must admit that, at times, I use cost-per-click for my clients. But as a general rule, I do believe that CPC is the sign of a lazy media buyer. It’s a media buyer’s job to make sure that that our ads don’t end up on an uninhabited island, but with cost-per-click, we sometimes end up on an island full of people offering a Caribbean vacation. Sure, they’ll show interest because there’s nothing else to do, but the last thing they need is a week at the beach. We’re supposed to do the research and determine the best way to reach our audience, not turn to the publishers to let them decide.

Reason 6: Did Google put us on the wrong track?
OK, so I can’t malign CPC advertising without talking about the king of CPC advertising: Google. CPC is actually a pretty good model for paid search — when you have an active audience researching a specific topic and an opportunity to gain response from a page that’s built to click on. Search engine results pages are all about providing searchers with the opportunity to find the next place to go. But the model should be different for display ads that most often appear next to content designed to inform and engage the visitor.

Reason 7: Clicks are contrary to every other media effort
Expecting advertisers to click on a banner ad is like expecting an magazine reader to turn to a page and suddenly get up and run out to buy a burger. TV ads interrupt the flow of a program, but they don’t expect an immediate response. Why is online held to a different model?

Reason 8: We lose focus on what’s important
When we focus on clicks, we lose sight of the other 99.9 percent of the audience that’s been exposed to the ads. Advertising is about building awareness, consideration, purchase intent, and — yes — sales. We need to reorient our thinking around how digital advertising helps our clients’ businesses find true success.

Reason 9: Engagement isn’t any better
When many of us recognized that clicks weren’t the best measurement, the term “engagement” came to the forefront as a metric. Rich media ads allowed us to track more than just clicks, and there was a big push to talk about “engagement” metrics with clients. We talked about expands, time spent, videos played, etc. But the reality is that “engagement” had as much meaning as clicks. In order to be successful, we need to stop creating our own terms and instead focus on metrics that marketers understand and embrace.

Reason 10: Are branding studies the solution?
Marketers are used to age old brand metrics — brand awareness (aided and unaided), favorability, purchase intent, etc., and we can measure the impact of these efforts online as well. But there’s a flaw in the system we’re using. How do we recruit responders to the studies? By showing banner ads and surveying the folks who… yup, you guessed it… click on the recruitment ads. We all know the click rates, we all know that clickers are not a representative audience, but still this is the “best we have.” You don’t run a TV awareness study by running ads on TV; we shouldn’t be using this approach for online.

Now, let’s think back to the original AT&T campaign that launched this industry (and started this article). AT&T’s You Will campaign was about the potential that technology provided for the future. It was aspirational. It talked about what “you will.” It made you think, wonder, and dream. But instead of asking, “What if you could carry the entire Library of Congress in your pocket?” or “What if you never had to ask for directions?” the banner asked, “Have you ever clicked your mouse right here?” Well, now we have 15 years of history that proves you won’t.

While ROI seems elusive in any advertising effort, there are ways to demonstrate the impact. It’s time to stop focusing on the click stream and instead on other metrics that indicate interest and awareness. And surprisingly enough, the data isn’t that hard to find. Take a look at your web analytics — the shifts are pretty easy to see. Over the years, I’ve seen increases in search volume and website traffic with pretty much every online campaign I’ve run, and the numbers surpass the reported clicks. More people searching for your products or services and more traffic to those product or service pages sure sounds a lot like awareness and interest to me.

We also need to stop the knee-jerk reaction when we see a week of low click rates. Changing consumer perception takes time and frequency. Yes, it’s true that 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. When you build out campaigns, make sure you allow adequate time to measure what happens in the market. After all, isn’t that what’s really important?

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.

About the Author: Peter Platt

Peter is a 30-year veteran of the agency business and has been involved in Internet marketing since the early 1990s. He was also one of the first 100 people certified in the Google AdWords program in 2004. Peter’s experience brings together a unique combination of business development, account management, technology and strategic planning skills. Peter provides an active voice to the internet marketing community, blogging and writing for iMedia, presenting at an array of conferences (including MediaPost & iMedia) as well as providing specific sessions on social, search and other forms of internet marketing.


* indicates required