MEASURING THE VALUE OF USERS WHO CLICK ON ONLINE DISPLAY ADS
Patrick Wyatt
Head of Business Intelligence, CriteoJune 2012
RESEARCH PAPER # 1
ABSTRACT
A common belief persists among marketers: very few people click on online display ads, and those who do are
not the kind of people worth advertising to anyway. This leads to the conclusion that the efficiency of display campaigns should be measured not with clicks, but rather by whether an ad was displayed (so-called “view-
through”).
This Criteo research paper aims to show that the bias against clicks is misguided. We have reviewed over $10B
of e-commerce sales and have learnt that the audience who clicks on timely, relevant ads is extremely valuable.
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INTRODUCTION
A much-cited comScore research paper from 2008 entitled
How Online Advertising Works: Whither the
Click?
found that a small subset of people – less than 10% of all internet browsers – were responsible for more than 80% of all clicks. Most worryingly, it produced evidence to suggest that the demographics of clickers are
skewed towards younger users aged 25 to 44 earning less than $40,000 per year. comScore concluded that
clickers were “…hardly an attractive target segment for most advertisers”
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. Taken at face value, these findings
cast significant doubt on the value of clicks and clickers. This study has been so often repeated that it has become
axiomatic within the world of online advertising.
But it is often forgotten that the original intent of that study was to discover whether clicks in a
brand
context were meaningful, and that the study is based on untargeted, non-personalized banner ads. At some point, it
became accepted that clicks in
any
online context are not valuable.
Normally, marketers go to great lengths to get responses from customers, using the marketing channels in which
they invest. So before writing off the click, it is worth taking a second look. What we found was surprising and does much to counteract some of the myths that surround click-based advertising.
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DATASET
Criteo collects purchase data from the sites with which it partners in order to provide personalized display adver-tising. For each purchase that occurs on one of our partners’ sites, we record the items bought and their prices,
and link this to an anonymous unique identifier stored in a cookie. This provides Criteo with what may be the
internet’s biggest structured database of e-commerce transactions. In 2011, Criteo recorded nearly $100BN of
online transactions, an amount that is larger than the e-Commerce revenues of either Amazon or eBay.For this study, we looked at internet browsers exposed to a Criteo retargeting ad during the first seven days of March 2012. This population numbered 147 million unique browsers.
We then split this population into two – those who had clicked on a Criteo banner in the previous six months,
and those who had not. For each group, we looked at the sales that these browsers had completed online
during the entire first quarter of 2012 – January 1
st
to March 31
st
, 2012. We should note that any browser who clicked on other ads but not on a Criteo ad is therefore viewed as a “non clicker” in this study. The total sales considered in the study amounted to $11.5 billion dollars.
RESEARCH PAPER # 1
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MYTH 1
“People who click don’t buy”
“The demographics of clickers are skewed towards younger browsers aged 25 to 44 earning less than $40,000
per year. This is hardly an attractive target segment for most advertisers
”
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Demographics are taken by comScore as a proxy for user value. We have the luxury of being able to measure user
value directly, in terms of the online purchases of clickers and non-clickers. We see that the clicking audience is much
more valuable than the audience who does not engage with our ads.
Figure 1. Number of tracked online sales per 100 browsers exposed to an Ad (Q1 2012)
1.130.39
00.20.40.60.811.2
RESEARCH PAPER # 1
3
3
EXPLODING MYTHS ABOUT CLICKERS
ClickersNon-Clickers
REALITY 1
Clickers Buy 3x More Frequently than Non-Clickers
S a l e s p e r u s e r d u r i n g Q 1