This holiday season, as more companies rush to market their hi-tech electronics, digital handhelds and downloadable software over the Internet, the year’s hottest and most discussed marketing topic is turning out to be the measurement mechanism.
This is especially evident as ad agencies, clients and ad networks clamor for an effective means to measure the success of online direct marketing campaigns where increasingly larger dollar volumes are being spent on hi-tech purchases.
For many, of course, the only acceptable method is click-through. But given the power and technology of the Internet, click-through should be considered – at most – an elementary tool. When Internet advertising was in its infancy, click-through provided the first means of instant measurement. Since then, however, technology has advanced to provide more detailed tracking information that gives a clearer, more accurate representation of an ad campaign’s success or failure.
Moving Past Click-Through
According to Webster’s New World Dictionary, direct marketing is the “distribution, promotion and selling via one or more media linking the seller and buyer and designed to elicit a direct response.”
The most important words in the definition are: “designed to elicit a direct response.” What is a direct response? In the offline world, it is a sale; sometimes a completed survey or attendance at an event designed to elicit a sale. For the purpose of this article, the desired direct response is a sale, not a click of the ubiquitous consumer mouse. Advertisers who focus too heavily on immediate clicks vs. the ring of the e-register have a greater chance of choosing poor advertisements and discontinuing campaigns that may be clandestinely reaping hundreds of sales.
For example, which is more appealing: banner ad A with a 5 percent click rate followed by a 5 percent sales rate or banner B with a 1 percent click rate that carries a 50 percent sales rate? In the first case, 10,000 ads would yield 25 sales; the 1 percent click-through rate in the second case generates 50 sales. Furthermore, if 0.5 percent of customers who saw ad A respond, but without a click-through, then total sales jump to 75. However, if 1 percent of those who saw ad B respond the same way, then sales burgeon to 175.
Judging a banner’s success by looking only at the click-through rate would cost a company 100 additional sales.
Those same advertisers who rely entirely on click rates, however, would consider it foolhardy to use just one measurement method to evaluate their offline campaigns. For instance, advertisers monitor retail activity in various markets to test the effectiveness of the messages communicated there, use promotional codes, create separate phone numbers to handle those campaigns and conduct user surveys. A potpourri of several of those tools is often used in conjunction with each other to measure just one campaign.
The same must ring true on the Internet. Rather than counting clicks, advertisers need to start implementing new tracking technologies and online surveys in conjunction with click-rate measurement to get the most accurate picture of how their campaign is working.
Survey Power
One company surveyed its user base and discovered that 10 percent joined its network by clicking on its ad banners, but 60 percent joined because of an ad banner they viewed.
Had that company not surveyed its users, click-through rates would have declared the campaign only a moderate success when, in reality, the banner ad was the nitroglycerin behind the network’s explosive growth.
Unlike their offline counterparts which take weeks and months to track and compile, online survey results can be seen in real time as consumers complete them.
Online direct marketing links the seller and buyer in a certain response. It doesn’t matter when or how often the response occurs. What matters is that the response, whenever it happens, is measured effectively.
The fact is that a click-through is not a response; it’s a simple action at the base level of the sales cycle. Therefore, it should not be used as the exclusive and ultimate test of an online campaign’s effectiveness.
