Still today I hear advertisers, agency professionals and online advertising reps keep coming back to clickthroughs as a measure of success. Can I take 2 minutes and explain to you how important the almighty clickthrough really is?

What’s a clickthrough rate? It’s the ratio between delivered ad impressions and clicks generated by them.

Oh boy! Now you’ve lost me. Impressions? Clicks? What are you talking about?

Ok then, let me start at the beginning. An advertiser wants to reach a target audience with a particular message and chooses to use Internet as a media to do just that. He buys an ad campaign using ad banners. His campaign is composed of a selection of websites – we hope they’ll properly reach the desired target audience – who’ll deliver the banners a certain number of times against its users. That frequency of exposure against the audience is the number of impressions delivered (5 exposures each for 50 people = 250 impressions).

What’s an ad impression? Online, it’s when 1 person (1 device: computer or mobile phone) is exposed to 1 ad creative 1x (1 x 1 x 1 = 1). This is comparable to other media where a television spot may be aired (see) 1x by 100 000 people. An online campaign generates volume (impressions) by showing ads 1 creative at a time per individual, one impression at a time.

So an ad campaign is composed of lots of impressions. People see the ads (impressions) and have now the opportunity to click on it to do what the message is inciting them to do, to know more. Bear in mind that at any given time, only 1% of the population is in the market to buy any given product or service.

What’s a click? That’s when someone clicks on an ad, regardless of format. Clicks are counted same as impressions; only, there cannot be more clicks than impressions. 10 clicks out of 1000 impressions = 1% clickthrough rate. That math is simple.

Up to now, I’m certain you’re still with me. Everything is clear.

What’s a clickthrough? It’s the ratio calculated between ad clicks and ad impressions.

No, really, what’s a clickthrough? What does it mean? It’s a measure of instantaneous reaction to being exposed to an ad. The clickthrough ratio does not take into account what advertising is most often meant to. It does not track actions after having been exposed to an ad. Here is a short analogy:

I’m in my car, en route to an important meeting. If I don’t get too many red lights, I just might be on time, but I haven’t had lunch yet. En route, I notice a billboard by the side of the highway advertising Big Macs for 25cents.

IF I get off the highway and head for McDonald’s immediately, that’s an instant reaction = a click.

IF I take note of the special and go AFTER my meeting, then I’ve reacted like most human adults. I’ve learned something, considered it and filed it away for when I have time to take action, or when it’s appropriate for me to do so = not a click.

The average clickthrough rate is between 0,05% and 0,3% depending on ad format, ad creative and where it is displayed.

The clickthrough does not measure how many people paid attention to an ad (regardless how long), but only instant reactions to it.
In other words, a clickthrough does not tell us much at all. It is actually counterproductive, capturing out attention on an almost meaningless piece of data instead of looking at other metrics that matter.

What affects a clickthrough rate? Many things affect it. We can start with ad size. The bigger an ad is, the higher the clickthrough rate will be. Is it animated or not? Animation attracts more attention than not. Is it interactive (rich media), can you dialog with it? In other words, will it expand, play a video, audio, game, show you more content, and invite you to participate in a contest, order a sample… The more interactive an ad is, the higher the clickthrough rate.

You must also consider the creative. A branding message will not necessarily invite you to “click here.” Ad placement (environment, editorial context) also counts for an important part of the clickthrough. The more relevant the ad is to the context in which it is shown, the better clickthrough it will generate. If the ad is shown at the top of a page or at the bottom also affects the rate. Not everyone reaches the bottom of a web page (same as not many people read through a magazine or newspaper to its last pages…). An ad within a website, i.e. not on the home page, will perform better in clicks because people are spending more time there. The home page usually acts as a dispatch and people spend very few seconds there.

Everything affecting a clickthrough rate can also be said for every other media. Why should Internet media be held accountable to a metric that not only is not (cannot) be measured in other media, but also really does not make sense, if our (consumers) reacting to ads online and offline are relatively the same. Anyone reading the paper or watching TV can “call now” just like you can “click” online…

It is still THE most important metric for American advertisers and marketers. That is also true in Canada and Quebec.

What do you think of the almighty clickthrough?