A Click Is Nothing More Than Costing You Money…

Damn if everyone’s got the whole marketing on the web quite incomplete.

Maybe if I weren’t so web-savvy, I could sit back and be proud of the click-through rates. With any ad online, a potential customer might see that ad and, if he or she actually clicks on the ad and is forwarded to your specified destination URL, that’s a click-through.

With Google Adwords and other such efforts, the advertiser gets charged per click. It’s known as a cost per click or CPC ad. Take the number of times the ad is presented to folks (that’s “impressions”) and divide that into the times a potential customer clicks on the ad (click-through) and the resulting percentage is the click-through rate or CTR.

With display advertising (also known as “banner ads”), the CTRs have steadily declined where a strong showing is 0.1 percent, meaning out of every 1,000 impressions, one person will click through. As for Google Adwords, Google claims 2 percent is good, meaning two out of 100 people.

But I rarely see either one of those. It’s more like 0.2 percent or higher means a good performance. And as for display ads, 0.01 percent is kickin’ it in today’s world of web-savvy users refusing to click on obvious advertising.

What today’s businesses need to comprehend is a click-through is like opening an door. The question is what’s next for that visitor.

This again is where bounce rate has a role. If a visitor bounces, then what use was the click?

Here’s a word problem to consider:

Trey has an ad running with a broad series of keywords linking to a few generic pages. Over a six-month period, this generates just more than 5 million impressions and 60,174 clicks for a CTR of 0.01 percent at an average CPC of $0.51.

Michelle creates an ad running with a targeted series of keywords linking to the same generic pages. Over a six-month period, her effort generates 2 million impressions for 35,715 clicks for a CTR (also) of 0.01 percent at an average CPC of $1.12.

Trey’s bounce rate (only on ads) is 83.1 percent. Michelle’s is 51.5 percent. Who’s ad performed better?

Consider ignoring the CTR except as a way to get to the number of visits engaging online. So of Trey’s 60,174 clicks, he had about 11,443 engage online for an average cost of $2.60 each. For Michelle, she had 17,322 engagements online for an average cost $1.66 each.

While Michelle appears to have performed worse on first blush, her advertising strategy reached a better-qualified group who had the potential to becoming buying customers.

Some of my fellow marketing people might argue the old fashioned “brand exposure.” I’m all for opening up the trench coat and showing off, if you can afford it. But that’s a topic for another day…

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Michael Cheek

With more than 20 years of communication experience, Michael Cheek offers solid marketing expertise, especially in the digital frontier. He currently resides in Georgia but he's open to relocate anywhere the opportunities take him. Learn more at http://MichaelCheek.com. You can follow him on Twitter at http://Twitter.com/MichaelCheek and see more about his professional experience at http://LinkedIn.com/in/MichaelCheek. Reach him via e-mail at mcheek@gmail.com.

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