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PEAR, or Why a .3% Click-Through Rate for a Banner Ad Is Perfectly Acceptable

by Michelle Eichhorn  |  
December 3, 2012
  |  14,122 views

Back in 2007, Ford ran a banner ad that was a simple yet attractive photograph of the inside of an Explorer. It was a sleek-looking interior, and I could easily envision myself sitting in that vehicle, my young children safely strapped in the back seat. It made me feel good to just imagine that for a moment. However, at the time, I drove a year-old 15-passenger van, so a new vehicle purchase was not on my radar.

Did I click on the ad? No. What would be the point? I wasn't ready to purchase.

Three years later, a driver crossed the highway median, hit us head on, and totaled my 15-passenger van. The replacement vehicle purchased with the settlement money was (surprise!) a Ford Explorer.

And that is why a .3% click through rate is perfectly acceptable.

Because what are the odds that at the very moment people see a banner ad for a product, they are going to have their wallet open, ready to purchase?


So, why bother with online ads if consumers aren't going to click on them and purchase?

Online ad response looks even more daunting when we look at reality. According to Pew Research, in 2011 companies spent $32 billion dollars on digital ads—an increase of 23% over 2010. Online ads make up 20% of all advertising in the United States.

Looking at those numbers, it's obvious that consumers cannot possibly make a purchase with every ad that is presented on their screens.


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Michelle Eichhorn is director of marketing and events for Apologia Educational Ministries, Inc.. She can be found on the Web at eyecorn.com and @eyecorn on Twitter.

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  • by Lynn Mon Dec 3, 2012 via web

    Great article but .3% is extremely high for standard banner sizes.

  • by Elizabeth Mon Dec 3, 2012 via web

    I think this is a conflicting message and that the overall recommendation towards brand marketing and buying more display is less valid for most businesses than the contextual piece . A large brand advertiser (like a Ford) can afford to blanket a brand message cross-platform in order to build mindshare and influence preference over time. However, with more niche brands - not necessarily small businesses, but not massive brands- I'd go for context every time when buying display. A message bought to live in context - which is point #2 and #4 yet pretty much glossed over here - will react far better than one placed by the numbers.
    That said, I also think a smarter play is to start moving away from display altogether and spend on content and integrated marketing (context again).

  • by Bryan Tue Dec 4, 2012 via web

    I think this is a great article. Like the other comment, 0.3% is very high for display ads- something more around 0.05% is standard.

    That being said, I think this article hit the nail on the head about branding and display ads.

    As far as content and integration, at some point, there's going to be too many brands playing in the same space. Look at what is happening with Facebook. Organic posts used to see more engagement, and now user newsfeeds are becoming filled with an increasing number of brand posts, leading to a decrease in user engagement and increased aggravation.

  • by Michelle Tue Dec 4, 2012 via web

    I agree, content is a top priority for building relationships and establishing trust between brands and customers. However, banner ads still have a place in a marketing plan--again, mostly for putting the brand name/logo/product photo in front of potential customers. In the niche market we serve, we typically see a 1% to 2% click-through rate on e-newsletter ads and some banner placements--part of this is the level of engagement overall in our niche market, and also in play is where we place-we do a lot of targeted placements on blogs and e-newsletters. (@eyecorn)

  • by Darryl M. Tue Dec 4, 2012 via web

    The article recaps strong basics. These concepts are also coved in AdWords certification. Additionally, when running paid or nonpaid banner campaigns within content networks, don't forget to tag links along with changing the campaign expiration because even click throughs at time take longer than 6 months to convert. Nothing worse than having a fuzzy optic of what drives conversion.

  • by Mike Wed Dec 5, 2012 via web

    Good Article. I agree a good creative is key to "PEAR", the other thing that is vital is hitting the right audience. From what I've seen behavior/click streams are not a valid representation of whether or not someone will buy something (as you clearly defined in the article), which is why cookies are not effective and why a .05% CTR is considered acceptable. My company has developed a custom audience building solution using our extensive offline address level database that we were then able to cluster into what we deem "IP Zones". This technology has been consistently producing CTR's from .11% to upwards of .69%. People vote (purchase) based on their wallets, not based on their browsing behavior....www.semcasting.com check it out - Key to staying on par with PEAR

  • by Lauren Proctor Wed Dec 5, 2012 via web

    Well said. If a user doesn't click on an ad it doesn't necessarily mean they didn't see it. I'm curious to see what happens when tracking and interactivity becomes more rigorous for TV ads. Will people take action as often as they do with banner ads? It will be an interesting comparison and like you say, immediate action isn't everything.

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