Lies, Lies, Lies: xAd study exposes fallacy of CTR’s having metric-value for mobile advertisers
Detailed research into mobile advertising, instigated by xAd and conducted by Nielsen, has compellingly identified that click-through-rates have no metric value for evaluating the effectiveness of ads on mobile devices.
Whilst this notion has been the topic of heated discussion across the marketing community in the last two years, advocates have failed to acquire the concrete proof to justifiably disclaim that CTR’s have no analytical worth.
However, it seems such groups have now been provided with the ammunition they have been looking for after xAd’s study vociferously asserted that marketers learn very little about the effectiveness of their display and mobile display advertisements from evaluating its CTR.
In fact, according to xAd, CTR only has indicative value when it comes to the assessment of consumer interest and awareness of an ad, and even then should be used collectively with other metrics as well.
Such remarks are a scathing indictment of CTR as a metric with any usefulness at all, and will need to be seriously considered by marketers across the globe, particularly considering just how extensive and complex xAd’s research was.
Study Findings: CTR is detrimental
The entire study was conducted on xAd’s platform itself, and analysed and scrutinised 80 campaigns supplemented by 12 national brands. Moreover, a staggering 200 million impressions were estimated to have been evaluated across the varying campaigns, which were undertaken during the opening 6 months of 2014.
The primary findings consisted of:
- Click-through-rates being an inaccurate and inadequate way of measuring the performance of advertisements, and might have no relation, or an adverse correlation to other areas used as metrics like calls, directions and in-store visitation rates.
- Marketers who decide to optimise their click-through-rates in order to improve their mobile display campaigns actually end up damaging the quality of other metrics like calls and directions.
- The samples which exhibited the lowest click-through-rates actually had higher offline in-store visitation figures.
The overarching nature of the findings was that the usage of click-through rates as a metric for measuring the effectiveness of mobile display advertisements is actually more detrimental to helping marketers make improvements than it is useful.
xAd argued that whilst a multitude of businesses possess an “intellectual understanding” of the deficiencies of using click-through-rate based measuring, a lack of research into this area has made it extremely difficult for them to commit to using a different success metric which has proven credibility. As such, advisers have erroneously remained “addicted to the click”.
The image below, taken from the findings of xAd’s research, illustrates the difference between utilising click-through-rates, secondary metrics – such as calls & directions – and in-store visitation rates, as success metrics for mobile display ads.
The graphics convey that using both secondary metrics such as calls and directions, and in-store visitation rates are superior and more accurate ways to measure the performance of mobile display ads, as well as the more important area of purchaser intent. Conversely, click-through-rates were illustrated to have no positive correlation with these alternative metrics, emphatically undermining the idea that they serve as a representative success-metric.
The study also concluded that advertisers and businesses which have decided to solely use click-through-rates as their gauge of ad-effectiveness, were actually putting themselves at risk of wasting money each and every day.
This is because of its inadequacy as a success metric at all; the study asserts that companies using it consistently attain an inaccurate indication of how much engagement and interaction their ads have been garnering. xAd argued that this notion was reinforced by the large volumes of inadvertent clicks by web-browsers that occur across the internet, which undermines the value of click-through rates even further.
Kick CTR to the curb
If you are one of the many advertisers who are currently using click figures to evaluate and improve your mobile advertisements, then the time is now to re-examine this practice and start using different metrics. Not only will you save a lot of time by needlessly optimising your display advertisements to draw clicks, but you will also be in a stronger position to make actual enhancements to your mobile campaigns.
As one of the few genuine examinations into how useful click-through-rates actually are, the findings of xAd’s study should be carefully considered, particularly when its conclusions assert that CTR optimisation actually has a negative effect on the figures for other metrics such as calls, directions and offline in-store visits. Moreover, when these other metrics were optimised, click-through rates actually fell, highlighting how unimportant CTR’s are for drawing any conclusions about the effectiveness of a mobile display ad.
Considering the emphatic mobile revolution within the consumer market in the last few years, marketers would do well to register the findings of the study. A failure to acknowledge that CTR’s have no value for ad-success measuring will inhibit you from optimising them to draw more engagement, traffic and conversions, and this will ultimately prevent you from capturing the sales you could from the rapidly expanding mobile consumer community.