Why poor display ad click-thru is a good thing.

 Display ad conversions – a 90 lb weakling?

Display ads have been having a hard time lately. It just doesn’t seem as sexy or effective when compared to the promise of search advertising, social networking, web 2.0 strategies and mobile applications. And if all the recent talk about emerging message environments and technologies wasn’t enough, like the hapless 90 lb weakling in a Charles Atlas ad, along comes a report from comScore to kick sand in the display ads’ face. How much sand? Try new statistics that reveal only 16% of internet users click on display ads in a month. This is a 50% drop from the last time comScore reported on the same behavior in July 07 when 32% of internet users would engage in a click behavior on an online display ad. comScore’s research goes further to indicate that a core 8% of the internet population produces 85% of all display ad clicks in a given month.

 So what does this mean? Is it time for display ad campaigns to throw in the towel and make the internet a banner-free wonderland? Not at all. Instead, this is an opportunity to rethink where display ads fit into your overall strategy. So less people click on display ads than have in the past – this shows that the internet and user behaviors on the internet are changing over time. That makes sense, the display ad was the first form of internet advertising available and as advertising formats and options have emerged it would be silly to think that the one-time, standalone online ad wouldn’t see its’ place in the online advertising world shift. These numbers don’t mean that display ads are only good for engaging 16% of the online population – instead they raise two questions: 1)Is the click the right measurement for display ads?, and 2) how do you speak the remaining 84% who seemingly ignore display ads?

 The tendency to measure display ads by click is, I believe, a well intentioned mistake and leftover from early banner advertising. Let’s put this in perspective. Until online advertising came along there was no reliable, detailed way to measure the impact of an ad campaign in print, TV, billboard, radio, etc. The internet changed all that. Suddenly we have the ability to measure the performance of an ad campaign by so many different metrics and dimensions that it’s often a challenge to sort out, identify and track the truly meaningful information. After the impression, the click was the first metric that was easy to identify and track as an actual engagement measure, and lately even the click has given way to a desire to track conversion (i.e.: sale, lead gen, etc.) as the primary metric of value. In short we have seen a tendency in metric reporting to ‘race for the bottom’ of the engagement funnel.

 Funnels aren’t just for frat parties

 Let’s look at the typical user engagement funnel: Attention – Interest – Desire – Action. These are the core stages of engaging a person with your message and getting them to take the action you want whether it’s buying a time-share,  a toaster or having them complete a job application online. As we race for the bottom of engagement tracking, all the focus is on stage four – having the audience take an action. But this action doesn’t happen in a vacuum, there are three crucial stages a person must go through on their way to being ready to take an action.

 New research is indicating that display ad performance measurement and value is closer to the top of the engagement funnel instead of the bottom. According to comScore, display ads should be evaluated by their view-through impact. Additional research has shown that display advertising creates a noticeable long-term lift in areas like trademark search, sales (both online and offline) and brand site visitation by internet users who were exposed to online ad campaigns. This is whether they clicked on the original display ad or not. These results, which were tracked across seven distinct verticals, show an average 46% lift in site reach from 1-4 weeks after a user was first exposed to the display ad creative.

 The take-away: brand matters, message matters, impressions matter. Impressions and visibility make, well, an impression. Are clicks important? Absolutely — and so are conversions. But before people will take one of these deeper engagement actions you have to build awareness. This is why it’s crucial to build employer brand identity with your audience. So display ads have poor click through rates… that’s fine. Stop measuring them by the wrong metric. What’s important is to have a strategy that properly engages 84% of the display ad audience: the people who don’t click.

 Next week: Part II – How to prime the top of the funnel to build a traffic stream.