The click-through rate is not dead, it's morphed into a zombie

Online trends are changing, so it makes sense for a new digital metric but does this mean the death of the click-through rate?, asks Mel Exon.

Is the age of CTR over?
Is the age of CTR over?

In October not one, but two, cracks of light appeared in the -otherwise fairly dark land of online advertising: Facebook -announced the relaunch of Atlas as an ad-buying tool and the Financial Times launched an advertising rate that it is calling CPH, or cost per hour. 

We’ve been studying what was measurable, not what was meaningful

Stop the clocks. Or rather, start them.This is radical, dear reader. Let’s start with CPH.  The FT has started selling advertising based upon an attention metric: the length of time an ad appears in front of targeted audiences. This particularly plays to the strengths of the FT, which captures a disproportionate share of a comparatively small but affluent audience’s time.

The move may not be unique – attention-based metrics, as well as social sharing, have been used by online media as secondary measures to indicate engagement in the past – but this is the first time a publisher has squarely centred its ad model on time as a currency.

The lack of credible success metrics and too much poor, clickbait-y content have created an unvirtuous circle in online advertising. For two decades, digital ads have been sold on the basis of eyeballs (on a cost-per-thousand basis), while engagement is still judged by whether a user clicks on your ad. When click-through rate (CTR) was invented back in the mid-90s, it probably made sense. The ability to interact was a unique and -defining characteristic of online, after all. But to borrow from -Warren Buffett, we’ve been studying what was measurable, not what was meaningful.

RIP CTR

So does the FT’s move also signal the death of the CTR? I’m not sure the CTR is still alive. Or perhaps it is simply undead. Zombie-like, it still sits on media reports, in the absence of anything else deemed useful.

By contrast, attention becomes more valuable as a metric to advertisers. "Time is the only unit of scarcity on the web. You only have 24 hours a day per person," was a bold statement of fact made by Tony Haile, CEO of Chartbeat, a digital analytics company, in Time earlier this year. "That directly correlates with the goals of advertising. Just like any economy of scarcity, anyone who captures most of it can charge more." 

Audiences whose attention was held for three minutes were twice as likely to return than audiences whose attention was held for a minute

If this sounds vaguely familiar, that’s because it is. TV advertising has been sold on this basis since its inception. 

In terms of analytics, research by Chartbeat showed audiences whose attention was held for three minutes were twice as likely to return than audiences whose attention was held for a minute.

So this ‘cost per hour’ metric isn’t noteworthy just for media buyers, it changes things for -analysts. 

However – not surprisingly for someone who works in a creative agency – what really excites me about this is the potential to force a universal change in how online ads are made. If the task is to hold a user’s -attention, you’d better be offering something useful and/or entertaining – something people actually want.

To quote Haile again: "In the seeds of the ‘Attention Web’ we might finally have found a sustainable business model for quality on the web." This doesn’t mean every piece of content needs to be long, deep and meaningful, just good (and perhaps episodic).

Facebook Atlas

I started this month’s column saying there have been two things that made October interesting. Facebook’s retooled Atlas has the potential to be just as disruptive to online advertising as the FT’s CPH model, if not more so.  In short, Atlas measures ad campaigns across devices (fixing issues associated with cookies) and targets real people across mobile and the web. When 41% of purchases now start on one device and end on another (Atlas data), this is something worthy of your attention. More to follow next month.