Viewpoint: Obsession With Click-through Rates Keeps Online Campaigns From Having Greater Impact on Sales
by Hernan Lopez
Published: June 15, 2009
One of the most persistent questions about advertising is: How does it work?
Almost 20 years ago, John Philip Jones suggested it depended on which side of the pond one was on. His paper “Advertising: Strong Force or Weak Force? Two Views an Ocean Apart” described the typical American view that advertising was “expected to work by conversion: by addressing apathetic prospects and persuading them with powerful arguments.” In contrast, “weak force” described the European view: Advertising was a “nudge,” acting as a reminder, reinforcing existing brand perceptions and defending the status quo.
Mr. Jones later argued that advertising was more often explained by the weak-force theory, which was appealing to admen on both sides of the Atlantic for a number of reasons, starting with modesty. Advertising cannot be expected to overcome problems with the product, competitive pricing or word-of-mouth, and that is probably truer today in countries with large online populations.
But advertising can work in subtle ways. It can boost profitability, even for large brands in developed markets, which are normally sluggish and rarely see sustained sales increases. Advertising is not as weak as it seems, just difficult to measure.
Single-source studies from Mr. Jones’ own study of TV ads in the late ’90s to ComScore’s recent “Whither the Click” report have shown that some campaigns work, while others simply fail to defend the brand from competitors. And when a campaign does work, the first exposure often has the biggest effect on sales. Erwin Ephron found a paradox here: “If advertising is a weak force, how can a single ad have a strong effect on sales?” His answer: Consumers act on ads for products they’re ready to buy and ignore the rest. That called for a shift in scheduling, from flighting to continuity; being off the air was “like being off the shelf.”
Both Mr. Ephron and Mr. Jones agreed that the most important factor behind successful TV campaigns was the quality of the creative. When Mr. Jones looked at those campaigns, he found that they weren’t “hard-selling in the conventional sense” but instead shared three characteristics: “They are entertaining and amusing; they are visual rather than verbal; and they say something important and meaningful about the brand being advertised.” More recently, he added the expression “rational arguments enclosed in emotional envelopes.”
That brings me to online advertising — and its missed opportunities. Sad to say, it’s hard to find interactive campaigns with the three characteristics Mr. Jones found among the best-performing TV creative. The industry’s obsession with click-through rates, despite evidence of their small correlation with total sales, results in messages that are rarely entertaining or amusing and are overly reliant on verbal hard sell.
Randall Rothenberg, CEO of the Interactive Advertising Bureau, has called for a “creative renaissance” on the internet, which he said has been “an unthinking hostage to a direct-marketing culture and tradition that devalues creativity and its long-term effect on brands.” Such thinking relies on the strong-force theory, which today looks more like the exception than the rule.
Fortunately, there is a growing body of evidence linking display advertising online with increases in sales. Gian Fulgoni of ComScore, who has seen single-source data on successful TV and online campaigns, concluded that their effects on sales are comparable. At my company we’re working with some of those advertisers and their agencies to find out why and how.
Maybe online is more than making up what it lacks in creative with better targeting. Maybe it’s working its magic in conjunction with TV, by letting brands with smaller budgets afford continuity, or by acting as a “reminder” of a TV ad. Maybe online is working on its own, by adding leverage to a “weak force” and making it stronger. But this much is clear: Online advertising will work even better if there is an interactive creative revolution.
About The Author
Hernan Lopez is president of .Fox Networks and chief operating officer of Fox International Channels