NEW YORK (AdAge.com) -- The number of people online who click display ads has dropped 50% in less than two years, and only 8% of internet users account for 85% of all clicks, according to the most recent "Natural Born Clickers" study from ComScore and media agency Starcom. As the pool of people who click on banner ads rapidly decreases, it begs the question: Is the long-used click-through rate now officially useless?
Clickers only represent 16% of U.S. internet users, according to ComScore data from March. The study initially found that 32% clicked on display advertising in July 2007. If that first study, released last year, crystallized skepticism that click-through rates weren't the be-all end-all success metric for display, this most recent report might just be the last nail in the digital coffin.
What's more, the 8% of internet users that compose a majority of clicks is also down by half from the last study, which found 16% are responsible for 80% of clicks. The 2008 study found half of all clicks come from lower-income young adults, so prizing clicks ignores the vast majority of internet users, especially the types of users many marketers want to reach. This year, the study focused more on alternative measurement, suggesting that a low number of clicks doesn't necessarily mean banners don't work, but that marketers are looking at the wrong success metrics.
From client studies, ComScore found that display ads, regardless of clicks, generate significant lift in brand-site visitation, trademark search (searching for, say, Toyota or Prius) and both online and offline sales among those exposed to the ads. Within one week, consumers exposed to a display ad were 65% more likely to visit the advertiser's site than users who never saw the ad. Even at four weeks, people exposed to displays ads are 45% more likely to visit the brand's site.
"The click has always been of dubious value," said Joshua Spanier, director of communication strategy at Goodby, Silverstein & Partners. "But clicks are easy to understand and easy to measure. We still know that display advertising has unequivocal value; your search performance improves as well. Together, search and display are much stronger than apart."
Banners lead to search
ComScore found that online users exposed to a particular brand's display ads conduct more searches on that brand's name than those in the control group. Still, the percentage who search is relatively small. When exposed to both paid search and display ads, consumers were found to be nearly twice as likely to make an online purchase on a retailer's site, which is greater than the sum of each ad tactic's individual effects.
Steve Kerho, senior VP-analytics, media and marketing optimization for digital agency Organic, has also seen a strong correlation between banner ads, higher interaction times on brand sites or branded microsites and better-performing paid search.
"Clicks are only one measure," Mr. Kerho said. "We look at how much an ad costs, how many people saw it and, more importantly, if two or three days later that person comes to our client's website. That ad is an impression. Go back and think of TV. When we put ads there, it's about carving out space in someone's mind. Banner ads create awareness and familiarity, too."
Mr. Kehro describes Organic's measurement model as considering banner ads and paid search in relation to site visits. Each site activity -- be it 10 minutes spent on a brand site or a visit to the store locator -- is assigned a dollar value. A site visitor's activities are then tracked back to see if there's been exposure to display ads or purchased keywords, and the agency can determine the value of those digital investments.
John Lowell, Starcom USA senior VP-director of research and analytics, points out that certain marketers may not have associated action with their display creative. But with more creative that doesn't demand clicks and few clickers online, it's time to look for new metrics online.
"For the most part, clients get it," said Mr. Lowell. "The problem is, what's the alterative? Clicks are easy to measure, so it's a good default. It does put the onus on 'What are we going to do instead?' like looking directly at sales. We look at clicks in a world of isolation. Consumers aren't only exposed to online ads. Digital has only been measured in the past on its own; increasingly you need to look at everything they are exposed to."
Tips for living in a post-click world:1. Goodby's Mr. Spaniers points out that it's important for marketers to ask their agencies how display ads fit into the larger marketing plan. "With the media mix, how do you set up overall metrics?" he said. "It's unrealistic to look at one element of one media for success. Since online media is so trackable, it's is held to a higher standard. The reality is no one looks at print advertising like that. You can't measure print that way or TV because they don't have built-in capacity. It's a little unfair that display becomes the whipping boy."
2. In the digital space, look at how elements like display and search coalesce, Mr. Spanier said. How do people end up at a website to make a purchase? Look at sales of a product on-site with consumers' exposure to ads. "There is no way display advertising is wasting money," he said, "even if people don't click."
3. Clicks are a direct-response measurement. For display campaigns, look at brand-awareness studies, purchase-intent lifts and engagement rates. "Users might work with an ad, but not click on it," said Paul Gunning, CEO of Tribal DDB Worldwide.
4. Look at display view-through rates. "CTRs have a value, there is still a hand being raised, but view-through is more important," Mr. Gunning said. "How many people actually end up where you wanted them to? How much time are they spending?"
5. Look at the creative. While consumer attitudes online have undoubtedly changed, think about how messaging does or doesn't demand clicks. If you want to measure success against click-throughs, include strong calls for action. Or, if you have a rich-media experience, other metrics such as engagement time are probably more telling. And that may be the case as more banners include innovations such as embedded video and rich media, said Atmosphere BBDO's Warren Griffiths, group account director for Visa, Emirates Airlines, Hertz and Starwood. "More banners have become the destination. I don't believe that would account for a 50% drop in clicks, but this may have had some impact."