What kind of person clicks on ads? When I talk to ad companies, there’s a lot of discussion about how ads are supposed to be relevant, targeted based on user intent, and so on, but I’ve never entirely shaken the suspicion that the real answer is: Suckers.
That suspicion? A company called Criteo just released some research saying it’s pretty much a myth. Keep in mind that Criteo offers ad retargeting for e-commerce sites (which usually means targeting ads at people who visited a site but left without making or completing their purchase), so it’s not exactly surprising that the company would make this argument. On the other hand, the research is supposedly based on the 147 million unique browsers who saw a Criteo retargeted ad in the first seven days of March, so there’s some real data here.
Specifically, Criteo is disputing what it calls the “myths” about people who click on ads, as embodied by a 2008 comScore whitepaper called “How Online Advertising Works: Whither The Click?” Criteo argues that clickers are actually much more valuable than most folks in the industry think.
You can read the full paper embedded below, but here’s a quick summary of the myths (in bold), followed by Criteo’s refutation.
- “People who click don’t buy.” comScore’s research showed that people who click on ads are usually younger browsers earning less than $44,000 per year — “hardly an attractive target segment for most advertisers.” Criteo, however, notes that these demographics are just a proxy for more direct measurements of user value. The company says that in its study, it found that clickers buy three times more frequently than non-clickers.
- “Nobody clicks on ads anymore.” In Criteo’s research, it found that 43 percent of regular buyers on its clients’ sites click on the company’s retargeted ads. (The number is 33 percent for occasional buyers and 15 percent for non-buyers.)
- “A small number of people are responsible for a disproportionate number of clicks.” Criteo isn’t really disputing this idea, since it found that 20 percent of browsers accounted for 50 percent of clicks. However, it says this isn’t a problem, because it represents “a classic exponential distribution.” In fact, the company claims that a small number of people are similarly responsible for a disproportionate number of sales.
- “People who click a lot don’t buy a lot.” In Criteo’s data, the more people clicked, the more likelier they were to buy.
Are you convinced? Well, you might be thinking that Criteo is looking at a relatively narrow slice of the audience, so it’s hard to generalize. In fact, that’s almost Criteo’s point — it’s not saying that all clickers are valuable, but that clickers on the right kinds of ads are more valuable than you think:
“Nothing here should be taken to cast doubt on comScore’s original paper, which was based on the performance of low-CTR, branding-oriented advertising. However, the clear message is that their lessons cannot be applied to properly-executed performance display advertising.”