Analysts disagree on whether Monday’s announcement by CBS MarketWatch –that the financialWeb site will stop providing its clients with click-through rate information in itsadvertising reports — will cause the e-commerce industry to break free of theclick-through status quo.
In a direct shot at the industry’s most popular and controversial online advertisingmetric, MarketWatch said that although click-through rates will still be made availableto advertisers by request, MarketWatch client reports will focus on other metricscommonly used in the offline world, including those used to measure ad campaign reach,post-impression analysis and brand awareness.
Jupiter Media Metrix analyst Rudy Grahn thinks that MarketWatch has perhaps shot itselfin the foot with the move.
“Ultimately, they have gone too far with this,” Grahn told the E-Commerce Times, addingthat while the click-through rate should not be a primary metric, “it should be ametric most advertisers should be looking at for all of their campaigns.”
A Fair Shake?
While Grahn dismissed the idea that the MarketWatch move would be the catalyst for amuch larger online trend away from click-throughs, Yankee Group analyst Michele Pelinotold the E-Commerce Times that a revolution is possible, especially in industriesthat are heavily focused on branding, such as the entertainment and travel sectors.
Pelino said that there are better ways than click-throughs of measuring how much brandimpact an online ad is having, including measuring the amountof time people spend with an ad and the number of interactions they have with it.
“My question is, ‘What kinds of metrics will [MarketWatch] release to theiradvertisers?’ Advertisers need some way of analyzing their ads,” said Pelino.”There needs to be a give and take.”
Pelino added that while the decision-makers at MarketWatch are forcing the issue onclick-through rates, “behind this needs to go an education process foradvertisers, and that may be where the challenge lies.”
The First Shot?
Grahn said that even though he understands the reasons for the MarketWatch move,which include the desire to be judged by the same metrics that offline companies are,approximately 60 percent of online advertisers are still using click-throughs astheir primary metric.
“They are getting hammered hard to demonstrate an advertiser’s ROI (return on investment)on such a short cycle, and if they are only going to be valued by the number of clicks,they will never get a fair shake and they are right about that,” Grahn said. “It’s notan either/or choice. Companies should be measuring both the branding and direct response.”
In addition, Grahn said that advertisers are by no means dependenton e-commerce companies themselves to get click-through data,because they can get the same information from a third party.
First Move
Pelino said that MarketWatch’s new policy is the first example that she has heard ofan e-commerce company making such a move against click-throughs.
“It’s unprecedented as far as I can tell,” Pelino said. “We would say this is a goodthing. It pushes advertisers to consider other metrics that would be much more reflectiveof the impact of the advertisement.”
The problem with click-throughs, Pelino said, is that they do not have much to do withwhether an ad is having the impact a company wants it to.
However, Grahn disagrees with the general consensus regarding click-throughs.
“It’s not true when people say they’re ‘virtually meaningless,'” Grahn said. “I can’tthink of a good reason not to track it.”
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If and when the day comes where online advertisers can accurately measure audience reach and
frequency like in the offline world of media, then click through rates can be considered in
concert with the other — equally important — advertising metrics. Until such time the ‘click’ will
remain the key online metric. An unfortunate reality of the way the medium has been built.
The comments by Jupiter Media Metrix analyst Rudy Grahn, about click-through rates
being a meaningful measurement, is just what I’d expect from someone far removed
from advertising.
To understand why a person WOULD NOT click on an ad all you have to ask is
what’s the creative, what type of web site is it on, where is it located on the page,
or what type of mood was the user in when seeing the ad? There are a number
of other elements in advertising that are totally out of the hands of web site publishers
and, therefore, should not be counted against a publisher when users fail to click.
The main purpose of any media is still to gather an audience and deliver them
to an advertiser. What that advertiser does with the group is their own business.
Unless I have total control over creative, placement, and a user’s mood, I will not
accept click-throughs as a form of measurement for our AudioGraphics.com or related
web sites. I’ll deliver people. It’s up to the advertiser, or their agency, to get them to
respond with the right message.
If you want click-throughs, Mr. Grahn, let me sell a Lexus for $100.
I’ll get you click-throughs.
CBSMarketWatch is on the right track – finally.
Jupiter Media Metrix analyst Rudy Grahn said that he cannot think of a good reason not to track the clicks.
I wonder if the reason he said that is because without metrics his job would be nonexistent.
CTR rates are not the bottom line. They do not tell you anything about branding or product awareness.