Customers, Click-Through and Conversion

If you’re going to convert folks who click through to your site from an ad, you’ll likely get 60 percent of your response in the first half-hour.

According to the latest Online Advertising Report from AdKnowledge, the Internet is increasingly becoming a quick turn-around medium which makes it ideal for direct-response campaigns.

“It confirms that the Web is very interactive and a very active advertising medium,” said Steve Findley, vice president of analytics at AdKnowledge, a division of CMGI‘s Engage Inc.

But, wait, there’s more. In last quarter’s AOR, the company found that there were more people who converted after viewing an ad and not clicking, than there were people who converted after clicking on an ad. Post-impression conversions accounted for 32 percent of total conversions, while post-click conversions counted for only 24 percent of the total. That finding seems to support the view of the Internet as a branding medium.

Clearly, the Internet is both a dessert topping and a floor wax. But what does that mean for online advertisers and marketers?

Basically, it says that the interaction between the advertisement and the consumer are much more complicated than measurements like click-through can tell you. And it says we’ve got to dig deeper to really see what’s going on.

When you’re concerned about ROI (and when aren’t you?), another set of numbers become significant. Of total conversions, 44 percent were repeat conversions — customers who bought before, after either seeing an ad, or clicking on an ad. So customers that bought before are the most likely to buy again. It would seem to be a no-brainer, and it shows that the recent growth of the customer relationship management focus is right on track.

Other interesting data from the OAR:

• Advertising folks seem to be getting better at driving conversions, rather than just click-through, with their creative. Last year, the creative with the highest click-through rates also yielded the highest conversion rate in only 14.3 percent of campaigns. This year, that number has climbed to 36 percent of campaigns. Another possible conclusion: marketers are getting better at designing Web sites that work well with good creative.
• In a confirmation of conventional wisdom, keyword placements were found to yield the highest click-through of any other types. But they also cost more. On portals, run-of-site or run-of-network buys evoked a response just 43 percent as great as the keyword deals. On non-portal sites, these run-of-site or run-of-network buys compared more favorably to keyword buys. So, on non-portal sites, run-of-site or run-of-network may actually make the most economic sense.
• Average CPM (rate card) rates actually rose slightly during the second quarter, growing from $33.59 to $34.06. But that puts them nearly equal with the rate at this time last year. Meanwhile, the number of sites and networks seeking advertising grew 13 percent in the second quarter, with the highest growth rate among news and media sites.