Single Metric Madness

Takes Control

Maybe you've seen this pithy little moment of nonsense in your travels around the Net: that you are more likely to be approved to gain admittance to Harvard than to click on a banner ad. Since no one loves ads other than the people who get paid to make them, it's big chuckle time at those foolish people who make ads, or those that use them.

Beyond the silliness of the comparison -- after all, only really bright kids bother to apply to Harvard in the first place, it costs money to do it, it's not as if they get millions of people trying to get in every year, regardless of life situation, and it's not as if you've thought about that rate any other time in your life -- there's also this.

If banners really were such a bad idea, why do so many smart brands run them, and why is such a significant amount of coin spent on them?

The reason is simple; the click is not the true metric of success. What is the true metric of success is the amount of business that's being done, and the banner buy is just part of a balanced marketing and advertising plan. Removing it doesn't make sense, so it stays.

Even from the dubious notion that brand impressions in a banner have no value (which would be unique to advertising) pure direct marketing standpoint, banner click rates are a tip of the iceberg metric. If a user opens up another tab, the banner clearly caused the awareness, but doesn't get credit for the click. If search engine traffic spikes following the display of a banner, it's also pretty obvious it had an impact. But it's not seen in a click rate. Where it is seen is in an A/B test, where a portion of the audience doesn't get the banners, and is measured against the viewed group.

A similar point happens around click rates in email (again, you aren't getting the full value of the impression from increased use of other channels, direct dials from direct mail letters, response rates on business reply post cards, and so on. And even if these single metrics are good, they don't tell the full story, or ensure success. If you run your North American banner in China, you could easily achieve a 10X click rate boost, but if none of that traffic converts, it's pointless.

That's because marketing is more complicated than a single metric. It's a lot of moving pieces on many chessboards, with impacts beyond the known, the easy, the simple. Measuring the simple stuff is good. Knowing the context is harder, and requires more analytics.

Or, failing that, a little faith that there are reasons why smart brands do what they do...

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