For my latest piece for Harvard’s Nieman Lab, I interviewed several big players in the display advertising industry about the obsession with click-through rates and what this means for AOL’s content strategy
According to several studies, click-through rates — the number of people who actually click on an ad — run well below 1 percent on most sites, and each year these rates get lower and lower. Some industry analysts have said this is a result of “banner blindness,” the idea that we inadvertently train our eyes to ignore certain parts of a web page, including sidebar and banner ads.
Depending on which side of the aisle you are on, these metrics are either a blessing or a curse. On the one hand, the Internet allows us to measure ad success like never before. In the past, advertising agencies would have to employ arcane formulas using Nielsen or circulation numbers to guess how many eyeballs saw a 30-second spot on television or a full-page ad in The New York Times. Now, we can open up Google Analytics or click-tracking software to determine exactly how many users engaged with an ad. We can even in some cases determine conversion rates, measuring not only how many people clicked on an ad, but also how many actually purchased a product after making the click. These metrics are a welcome relief to the client who famously said, “I know I am wasting half my advertising budget; I just don’t know which half.”
But many publishers and advertising agencies have expressed frustration that their industry is beholden to such confined measurement. By focusing so much on direct response, they argue, advertisers are missing out on the larger branding opportunities afforded by creative advertising. The Geico Gecko is not successful because he inspires people to jump up from their couches and purchase car insurance; he’s successful because when a person decides months later to shop around for car insurance, his image springs to mind.