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Study: Hate the Metric, Not the Display Ad

Attention marketers: abandon the click-through metric, but not the display ads.

That's the take away from a study out today that says the click-through metric for rating the success of online display ads should be replaced by a holistic approach that takes into account overall ad impressions.

While the amount of people clicking online ads is dropping severely, display ads still deliver benefits to marketers, according to the report issued by comScore and media agency Starcom.

The number of online display ad clickers dropped 50 percent in less than two years, and just eight percent of Internet users comprise 85 percent of all display clicks, says the report.

In July 2007, 32 percent of people online clicked on display ads, but that fell to 16 percent this year, according to comScore.

Also down dramatically is the percentage of people doing all the clicking. The eight percent of Internet users that conduct the majority of clicks – 85 percent of them, to be exact – is also down by half from the last year, when 16 percent were responsible for 80 percent of the banner action.

Still, comScore says that display ads have major value in delivering successful brand marketing -- but their success should be measured by "view-through impact," as opposed to clicks.

"Today, marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don't click on an ad. That's precisely the wrong thing to do, because other comScore research has shown that non-clicked ads can also have a significant impact," Linda Anderson, comScore vice president of marketing solutions and author of the study said in a statement.

Online display ads generate a significant increase in brand site visitation, trademark search and both online and offline sales among those Internet users who were exposed to the online ad campaigns -- whether they clicked on the ad or not, according to comScore's data on 200 clients.

This mirrors other data from comScore published in June that says one in five consumers who view display ads searched on the advertised brand, and one-third visited the advertiser's site.

Furthermore, that report said online shoppers exposed to display ads spent over 50 percent more time than the average visitors had at these sites and viewed more pages. It also says users spent 10 percent more money online overall, and more on product categories related to the advertised brands.

As a result, savvy marketers are moving to an evaluation of the impact that all ad impressions -- whether clicked or not -- have on consumer behavior. That means mirroring the manner in which traditional advertising has been measured for decades; using reach and frequency metrics, says the report.

"A click means nothing, earns no revenue and creates no brand equity. Your online advertising has some goal -- and it's certainly not to generate clicks," said John Lowell, Starcom director of research and analytics in a statement. "Regardless of whether the consumer clicked on an ad or not, the key is to determine how that ad unit influenced them to think, feel or do something they wouldn't have done otherwise."

The findings come at a time when recession-strapped companies are increasingly looking to social media marketing as a more affordable way to promote their products and services as compared to standard online display advertising, and as interactive marketing overall gains purchase on traditional offline advertising.

Facebook and Twitter see the highest adoption rate in social media marketing while customer reviews rank number one for increasing sales and customer engagement, according to a recent study by the e-commerce consulting firm e-tailing group.