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We often discuss the impact of digital advertising from a branding perspective, but a recent report from Drawbridge, on the topic of click through rates, merits a closer look. It’s no secret in the early days of the Internet, the novelty of being able to click on an ad and visit an advertiser’s website to learn more about a product, get a coupon or make a purchase resulted in impressive CTRs. We estimate that an average click through rate was about 2.5%, but as more and more ads cluttered web pages, and consumers became savvy—and then weary—of online advertising, CTRs rapidly declined. According to the Drawbridge’s most recent “Cross-Device Advertising Benchmark Report,” the average CTR was .32% in the 3rd quarter of 2017. No surprise there.
However, Drawbridge took a closer look at CTRs by type of ad, size of ad, and type of device the ad was viewed on, and found some interesting variations. Utilities, entertainment and telecom ads had the highest CTRs, at .96%, .75%, and .64% respectively. As Drawbridge notes, this is undoubtedly due to “calls to action,” particularly with utilities and telecoms, as viewers perhaps look to save money as they rack up their bandwidth usage or ponder cutting the cord after their latest cable bill. And entertainment is exactly that—it’s fun to click through to see the trailer for the latest blockbuster or a sneak peak at an upcoming episode of a favorite show.
As for the size of the ad, larger ads performed better, to the surprise of no one. In general, desktop ads performed poorly, with CTRs ranging from .02-.05%, from smallest to largest. On the other hand, mobile ads showed greater variability, ranging from a low of .07% for a 160x600 ad, to a surprising 3.68% CTR for a 1024x768 ad.
In general, tablets featured the best overall CTRs, with an average of 1.13%, followed by smartphones at .49% and desktops with an abysmal .03%.
So what can we take from this? Based on click through rates, digital ads on desktops continue to perform as poorly as ever, but ads on smartphones and tablets perform much better, some even exceeding the rates of the Internet’s early days. Is this a reflection of the relative novelty of such devices, or is there a connection between the use of these devices and a stronger interest on the part of the consumer to exploit the interactive attributes of the medium? Only time will tell.
Although the focus of our analyses is often television, it’s important to look at other media, especially because—as we point out in our just-released annual, Intermedia Dimensions 2018—they are crucial elements in a well-rounded media plan. With this in mind, we looked at Nielsen’s Total Audience Report, for the 2nd quarter of 2017, to see how radio and digital are faring in today’s media environment.
In general, radio and digital have healthy average daily time spent numbers, with the typical adult spending just over three hours with digital (Internet on a computer and app/web usage on smartphones and tablets), and two hours 43 minutes with radio. This, compared with TV, which clocks in with about 4 and a half hours, including both live and time-shifted viewing. When it comes to variations by age, radio shows significantly lower usage among younger adults (under age 35), but this is also the case with television. And, as one would expect, digital usage is highest among this age group.
The fact of the matter is that, in terms of time spent, radio has always lagged behind TV, and for the time being, digital continues to do so as well. However, a key benefit of both media is their reach beyond the home. Most radio listening is done outside of the home; according to Nielsen’s report, 68% of radio listening by adults 18+ is done away from home. And obviously, smartphones (and tablets, although to a lesser extent) travel everywhere with us, so these components of digital are key to reaching consumers outside of the home. TV just can’t do that.
As we discuss in Intermedia Dimensions 2018, is there a better time for a Midas muffler ad to reach a consumer than when she is in her car and painfully aware that her muffler isn’t working like it should? Radio does just that. And what about a weight loss program? Studies show that most dieters finally decide to do something about their weight during a weekend of overindulgence. Sure, TV has a lot of programming on weekends, but most broadcast network fare consists of high CPM male-oriented sports programs or news/talk entries that draw geriatric audiences. Cable is a low-cost alternative to broadcast TV, but many channels are clogged with infomercials in the mornings on Saturdays and Sundays and, while other programs are available, it is hard to maximize reach on a single day or weekend solely on cable. So why not add weekend radio to the mix and double your reach on those most pivotal diet decision days? Furthermore, since the diet will probably start on Monday, be sure to include Monday AM radio drive and daytime TV in the mix. Additionally, 100% of the digital and radio ad audience is delivered more or less instantly, while approximately 12% of TV viewing across all dayparts and program genres occurs on a delayed basis via DVRs. In other words, radio and digital should be part of any media plan that wants to reach beyond the home and hit consumers with a message that will reach them instantly, ideally when they are in a position to act upon their impulse to buy your product.
