There is no correlation between a click and actual in-store or online spend. That is not a typo, it is a truth that we continue to see across all categories with few exceptions. Unfortunately, while as an industry we have become experts at driving efficient means to drive clicks, these clicks can’t be used to pay down overhead, invest in R&D or increase gross margin. Clicks are not a currency. Currency is a currency.
As marketers, we crave more deterministic methods to demonstrate that our marketing executions work (and, better understand how to fix them when they don’t). We believed that clicks, as indicated by a consumer action, were a significant improvement versus the obvious limitations of measurement using circulation, placements, and estimated audiences. A click provided us a way to measure consumer action taken on ads across digital platforms. From these clicks, the first true pay-for-performance metric – cost-per-click or CPC – was born. But, CPC was deceptive. A click is only a proxy for consumer intent to buy, but it doesn’t tell us if a purchase is actually made.
Related to CPC, we use ROAS (or Return on Ad Spend) as a way to measure the return of our online campaigns. But, ROAS has two key flaws:
Attribution: Who gets the credit for the sale? Is it the last click? Do all clicks get a share? Should we divide sales among impressions and clicks? There are countless attribution companies to help marketers answer these questions, but they struggle to deliver a definitive answer.
Online to Offline Impact: Since digital marketing is often linked to online sales, companies tend to group them together – that is, digital marketers are evaluated on online sales. But, 92 percent of sales happen in stores, so how do we understand the impact these digital campaigns have on offline sales?
Digital marketing teams are held to the KPI of online sales because there are few alternative measures of effect and ROI. As a solution, I’d offer that there is a new currency for measurement: currency.
Working with our advertiser clients, we see that campaigns optimized on clicks – as with most programmatic buys – do deliver thousands of cost-efficient clicks. However, as counter intuitive as it seems, our experience is that clickers are not spenders. In fact, they are just as likely to be spenders and non-clickers. Therefore, optimizing on clicks will not provide the same level of actual purchases as that same advertising dollar could generate if targeted and measured based on spend likelihood. We help marketers optimize campaigns based on true sales. Our patented method links online consumer behavior – like exposure to an online display ad, frequency, creative – to online and offline purchases to help marketers accurately evaluate the true sales impact of their efforts. Digital advertising works. If we optimize for currency, returns will increase significantly.
Want to read more from about why sales trump clicks as the best metric for marketing effectiveness? Read our full white paper at http://bit.ly/21ReKhH.