10
24
dev

A Digital Advertising Future without Clicks?

By: dev | December 31, 2013 | 
23

A Digital Advertising Future without Clicks?By Jason Konopinski

Once upon a time, marketers working on behalf of agencies or as part of an in-house team really had no idea if their ad buys were working.

Print and broadcast campaigns were notoriously difficult to measure.

At best, you could correlate the increased visibility with a corresponding uptick in sales, but more often that not, it came down to some fuzzy math, and a whole pile of confounding variables.

Variables such as:

  • Did the direct mail piece actually activate purchasing behavior at the moment of receiving or was it the cumulative effect of multiple touchpoints during the consideration cycle?
  • Did the beautifully designed, full page ad in a nationally distributed publication with a readership in the millions directly lead to an increase in inquiries or product sold?

These are the questions that continue to frustrate marketers and clients alike, but it doesn’t appear that traditional ad spends are slowing.

According to data released by Kantar Media and as reported in Ad Age, print advertising in consumer magazines increased 1.9 percent while the number of ad pages fell 2.1 percent.

Digital Advertising is Different

Digital advertising networks emerged to provide answers to the return-on-investment question that has stymied more traditional advertisers, allowing marketers to follow click-through data from ad impression to landing page to purchase. Sounds pretty simple, right?

Not so fast.

As it turns out, the digital advertising model based on clicks suffers from the same problems it hoped to solve. While marketers have access to more data about how potential buyers are responding to their online ads, attribution is still tricky.

If I see an ad on Facebook, don’t click, but make a purchase tomorrow — did the ad work?

By the numbers, click-through rates on Facebook ads continue to climb, but linking offline sales to online ads isn’t always the easiest thing to do.

The New Offline Sales Measurement Tool from Facebook

As I was researching this piece, I stumbled across an announcement from Facebook that got me thinking about the future of the online advertising model as we know it.

Their Custom Audiences features allows advertisers to locate offline audiences on Facebook using a list of email addresses or telephone numbers, but it’s only been available to a select group of advertisers working with Facebook’s managed sales team.

How it Works

Let’s say you own a small brick-and-mortar boutique and have built a database of email addresses, perhaps as newsletter signups or loyalty program participants.

If you’re using a CRM such as Salesforce or Nimble, you can export this list, upload it to the Custom Audiences tool, and create an ad specifically targeting this subset of customers.

Marketers and businesses will submit hashed data, including encrypted transaction data, directly to Facebook, and Facebook will in turn match that hashed data against their own user database, comparing sales from those who were shown the ad against a control group.

From the Facebook blog:

Say Town Sporting Goods, a fictional national retailer, kicked off an advertising campaign on Facebook to promote its new line of ski gloves to existing customers. Town Sporting Goods has always wanted to measure in-store sales lift from Facebook ads, but needing to work with a third-party has prevented them from doing so previously. Now, the company can work with its Facebook representative to understand the connection between Facebook ads and in-store sales of the new gloves.

Mobile: The End of the Click?

One potential outcome of this new focus on impressions is the end of the click as a success metric, especially as more and more users are accessing Facebook via mobile.

Consider the mobile screen. Clicking on a sponsored post in the mobile experience is cumbersome and disruptive, so clicks through mobile are typically low. However, simply because an ad goes un-clicked doesn’t mean it didn’t trigger future purchasing behavior. Measuring the ROI of impressions in addition to clicks gives advertisers a more holistic view of their digital advertising efforts.

It’s too early to declare the click dead, but perhaps its days are numbered.

22 comments
ronmartin05
ronmartin05

Can't play too conservatively when you're doing PPC. You have to bid to win that traffic. You should be receiving >90% impression share of the keywords you are bidding on and that means bidding a little higher sometimes. What happens is that you have to have an optimized sales process to justify the ability to bid higher. If you make more per sale, you can bid more per click, and squash your competition.  My buddy Simon would be willing to help anybody that wants help with their PPC campaigns, just give him a call. His number is 256-398-3835.

dbvickery
dbvickery

Good point and nice title, Jason. I never click on ads or sponsored posts, but I will "make a mental note" and then go Google the product or service. I'll then read the results that were NOT sponsored with a focus on reviews. Of course, I'll also pose questions to my immediate social circles to get more personal perspectives.


Then I do my comparative shopping online and sometimes engage the providers on social...just to see if they engage back. That engagement is generally my tiebreaker when "all else is equal".


So you definitely can't tie my purchase behavior to a click even if I was initially intrigued by what I saw in my feed/sidebar.

Howie Goldfarb
Howie Goldfarb

Clicks have been dead for years dude! No one clicks ads.


I personally view all digital ads as banner ads equal to print and billboards. The only difference (as the Facebook model I will say achieves) is help you confirm the viewer is in your demographic. But attributing a sale is impossible. Always will be. Something that has always been hard to prove. Say with FB Unless the only advertising you do is on Facebook, and you mention nothing anywhere including inside your store that something is on special, attribution is really hard (marketers LOVE this btw. It is the source of the famous '50% of your ad spend is wasted we just don't know which 50% so keep spending!)


Coupons and direct click to purchase are the closest you can get to assigning the sale, but even then it is murky with so many factors come into play. For example P&G Old Spice man on a horse. The CMO said they did so much advertising and couponing knowing if the man on a horse event spurred sales was impossible to know. during that time I had a $2 off 2 coupon from the newspaper. Which wasn't enough for me to buy! But the store with my club card had it so that the 2 which retailed for $7.50 only cost me $2.50 so I bought it. So even there they couldn't prove my sale. BTW tried the body wash...both stuff sucked never to buy it again.


Facebook has a habit of trying to make believe brands only advertise with them. In their S-1 filing they gave examples of success with ads that had no proof (I was blown away their lawyers allowed this to be included in the filing). For example there was a Gillette Shave Cream campaign that wasn't just on Facebook. They claimed responsibility for the whole sales bump even though Gillette used TV, Print, Coupons etc off line. But they are no different than other channels. Fact is in store in person trumps everything. I have changed my mind to a different brand just because I saw a deal. Except for with Chobani. LOL

But this stuff is always great for discussion because marketers need to be kept grounded in reality. Just like the title of this blog.


LauraPetrolino
LauraPetrolino

Great post Jski! I'm a habitual non-clicker. I refuse to click because I don't like being told what to do and so instead I'll google anything of interest in a different screen. So, here again, no click but still goal accomplished. 


Also, using the Vitacost example that I mentioned earlier today  of instream Facebook cookie ads....those ads are for things in my cart already. I'm probably not going to click, but it is a friendly reminder...'oh hey, that's right I was interested enough to put that in my cart...and here is some more great info about the product to push you to a purchase'


Digital advertising is a brave new world, which is crazy exciting from the mere psychological aspect of it, not to mention power it gives brands that are smart. 

susancellura
susancellura

Fascinating piece, Jason. Here's a thought regarding the "end of the click": what about the fact that many, many companies are still just beginning to include social media in the communication toolbox? My thought process behind this question is as follows: If they are FINALLY adding it, do they understand how to use it effectively? To them, they are still thinking a click is a win.

Of course, this provides many opportunities for agencies, consultants, and passionate insiders to educate. :-)

JoeCardillo
JoeCardillo

This is really interesting. 

Click-throughs are troublesome not just for attribution, but also because they are more easily gamed than most people think (we did an infographic w/stunning #s on this for Pixalate a couple months ago ---> http://visual.ly/truth-about-fraud-digital-advertising).

From what I've seen impressions and CTRs are on the way out, as general metrics. The part that's not easy, as you and anyone who's ever been responsible for a marketing funnel knows, is figuring out what prompted someone to take a purchase action (which, outside of credit card fraud is the real proof that what you're doing works).

One possibility is keeping current metrics and campaigns but reducing their standalone value. In other words, touch points are still measured but only over the long haul as they relate to sales data. This is a total pain, because relating campaigns to each other is a lot less easy than saying "X performed better than Y." Which brings up the problem with A/B testing, but I'll rail about that on another post. 

@jason_
@jason_

@jasonkonopinski  First off, this was a great post. 


If I see an ad on Facebook, don’t click, but make a purchase tomorrow — did the ad work?

I admit that I've been reminded by an online ad to make a purchase IRL.


Thanks for the information about the new Facebook offline sales measurement tool. I admin SF, so I'd like to have this tool available for our next campaign.



ClayMorgan
ClayMorgan

I wonder if Facebook's move isn't in some way related to their own admission that the effectiveness of their advertising is dropping.


There have long been third party sources for this information. For example, several newspapers I worked at used Polk Data to help measure effectiveness of automotive ads.


There is no 100% reliable way to measure what factor(s) caused a person to go in a buy those skis. Everything from the Facebook ad to store signage has at least some impact. I think it comes back to asking though - most store owners/managers who are in tune with their customers have a pretty accurate sense of what brought them in the door that day.

Latest blog post: Livefyre Conversation

jasonkonopinski
jasonkonopinski

@LauraPetrolino Retargeting is where things really, really get interesting. We've all had that experience of surfing a website and seeing an ad based on recent search history, including browsing online inventory. 


@ClayMorgan can speak to this a bit, as I'm seeing more and more newspapers (our local, for instance) using retargeting as part of their basic advertising products for clients. 

joecardillo
joecardillo

@jasonkonopinski Indeed, reveals that long view of earned/owned media and defining success in digital = still in development

jasonkonopinski
jasonkonopinski

@susancellura Well, sure, but social advertising is just a small piece everything that encompasses digital advertising. For me, it's not an either/or proposition with regard to impressions and clicks. They're both useful in the right context. 

jasonkonopinski
jasonkonopinski

 Thanks, amigo! 
Are you using the self-service ad platform or working with a FB rep? Right now (and I hope this will change), the new tool is only available to businesses working directly with FB sales staff, given the amount of data being passed. 

JoeCardillo
JoeCardillo

@ClayMorgan Bingo. Part of the problem, finding better ways to let customers tell you WHY they are there and balance that against other metrics.

@jason_
@jason_

@ClayMorgan I tried to explain this in a similar way to a local business owner. He was convinced their Facebook ads was going to bring all the business. I explained FB was meant to gain attention to funnel people to the website to drive signups.

Howie Goldfarb
Howie Goldfarb

@jasonkonopinski@LauraPetrolino@ClayMorganwho uses Facebook in store anyway? I don't even have the mobile app on my phone. Google is different and amazon shopper that lets you compare prices I sometimes use. But I have never used social for small purchases. Big stuff it is a part of my decision making. Like when I was deciding between the new Apple 4S and DroidX I asked many people on and off line. But for something like pasta sauce or even jeans? never. Those are often in store decisions made usually on price.

jasonkonopinski
jasonkonopinski

@JoeCardillo @ClayMorgan I just had a conversation with a friend about this very thing. He's starting a mobile BBQ truck in Omaha and got his cart ahead of the horse so to speak with his FB page. His website isn't quite functional and he pushed to get the social outposts working first -- but hasn't seen any real growth in the vanity metrics of fans and engagement.  


Joe is right that clicks can be gamed (and there was a story running some time ago about bots artificially inflating CTR on Facebook ads, burning through budgets), but it's ultimately on the other side of the click. Most FB ads are part of a fan acquisition strategy (and that's usually where I start in building out paid media), so the conversion rate is going to mean something completely different from a brand that uses the retargeting tools to close the loop on someone who viewed the product onsite but didn't complete the purchase.

LauraPetrolino
LauraPetrolino

@Howie Goldfarb @jasonkonopinski @LauraPetrolino @ClayMorgan I agree.  I think overall digital advertising falls short in conversion for smaller pricepoint items offline. It can grab smaller priced items that can be purchased online because of convenience and immediacy factor, but that translation offline doesn't exist. 


Big ticket items are a bit different though, because as you say the decision making process, keeping it front of mind and the comfort/trust level created from the familiarity of consistent brand interactions. 

Trackbacks

  1. […] you’ll start seeing much better integration. Facebook just released (to a few limited brands) impression tracking and advertising spend that can integrate with Point of Sale and CRM so you can track online impressions and offline spend, without the help of click throughs, coupons, […]