Bad News For Display Advertising
Bad News For Display AdvertisingFeb 15 2008 - PPC - Farhad Divecha
Advertisers working with a pay per click platform will not be pleased to hear the most recent findings from a recent study done by comScore, Starcom Media, and Tacoda. The study has found that about half of all clicks generated on display ads are generated by only 6 percent of Web Surfers.
This information, however, does not apply to clicks on paid search links. People that typically click on display ads are not representative of the total US online population. It should be further noted that most heavy clickers on the net, are not very likely to provide much revenue generation for the advertisers as data reveals that these people are generally in the low income range (below $40,000 per annum), They are usually between 25 and 44 years of age and spend a lot of time on gambling and auction sites; in other words they do not seem to have much work to do.
It was found that more clicks on an ad do not necessarily imply that there is better awareness of that brand. A high click rate does not necessarily mean good performance by the ad.
Some advertisers may already be aware of these drawbacks of the pay per click display advertising system. What is important is that they should start focusing on other aspects like actual sales generated, or brand awareness created through the ad campaign, rather than worrying about how many clicks their ads receive. Based on the findings of this study, advertisers would be better off investing in CPA (cost per action) bidding rather than CPC.
Erin Hunter, executive VP at comScore says, “while the click can continue to be a relevant metric for direct response advertising campaigns, this study demonstrates that click performance is the wrong measure for the effectiveness of brand- building campaigns.”