Should you worry that the people clicking on your ads aren’t the people buying your product?

Posted by IAB Australia On January 22, 2014

Many times I’ve heard people talk about the purchase process that exists for online advertising: people click on your banners, they land on your site, start the purchase process, before completing a sale.

Just because people talk about it all the time, it doesn’t mean it’s true. So what’s the problem with the above idea? It’s the claim that people who click on your banners are the ones buying your products.

When we run display advertising online, our adservers or site analytics tools measure all conversions generated. Then we can see which conversions have been made by people who have interacted with our advertising.

Across a number of sectors and a range of products, most of the people who buy your product and have been exposed to your advertising never click on a banner. For most campaigns I see, a normal result would be for 5%-10% of your online tracked display sales to come from people clicking on the banners with the remaining 90%-95% coming from those who have seen, or had the opportunity to see, the advertising without clicking on them.

But is this a problem?

If you have focused on clicks as the key success indicator for your creative, your publishers or placements then this is a problem. These clicks are not generating the sales you crave and if you optimise to click through rate (CTR%), cost per click (CPC) or the placements that generate the most clicks you are likely to see your sales volume decrease and your cost per acquisition (CPA) increase.

This idea is support by a Comscore study showing a 0.1 correlation between clicks and sales versus 0.35 between visible impressions and sales.

You may be asking, is it right to allocate a sale to our advertising if someone has only seen it?

Well, let’s take a look at what we’re tracking. When we record a post view conversion (a conversion where someone has had an opportunity to see the advertising but has not clicked on it) we are recording that someone who bought our product has seen our advertising. We know that we are reaching people who are buying our product with our advertising. This has always been the objective and a measure of success within any advertising medium.

The other thing to consider is what we do with our campaign when we see a sale from someone who has seen our advertising. We view that as a success for that placement or site or form of targeting. We then continue to deliver impressions to that same site. This means that we deliver impressions to people who are similar, based on their web behaviours, to the people buying our products. By recording which sites generate our post view conversions we get an idea of where we are likely to find more customers and we then deliver more advertising and impressions to those areas; an extremely sensible approach.

My message to anyone using online display to drive online sales is to ensure you’ve thought about how many of your conversions come from clicks on your banners and how many come from people who have merely seen the banners. You will improve the performance of your campaign not by focusing on click through rate but by increasing the number of people who see your banners.

IAB Australia

IAB Australia is the peak trade association for online advertising in Australia. As one of over 43 IAB offices globally and with a rapidly growing membership, the role of the IAB is to support sustainable and diverse investment in digital advertising across all platforms in Australia.