Though unsurprising, a new study released today by a consortium of big players in advertising found hard numbers to back up what you might have guessed. Specifically, that only 6% of people online are contributing 50% of the clicks to display advertisements. Starcom USA, behavioral targeting network Tacoda and comScore performed the study.
Those people who click heavily have a number of other characteristics of note. "Heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000," the study said, and they "are also relatively more likely to visit auctions, gambling, and career services sites – a markedly different surfing pattern than non-clickers."
The authors conclude that the heavy clickers do shop more online than the population at large, but not at a rate proportional to their click rate influence. In other words, if your ads are getting a lot of click-throughs and you are holding your breath that they will monetize better any day now - you're not likely to find relief any time soon. The study also found that there was not a high correlation between heavy clickers and increased brand loyalty. Search ads were not included in the findings but add in the fact that after a few years online more people won't help but be able to learn the difference between their browser's address bar and search bar - and the overall ad money pot doesn't look terribly reliable.
These numbers probably speak for themselves, and will mean different things to different people, but we do hope that our unusually engaged readers will enjoy checking out the services of RWW advertisers. :)
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I am worried that since > 15% of the clicks is fraud coming from tireless algorithms from overseas, that these 6% might fall victim to those.
Posted by: Alex Iskold | February 12, 2008 9:14 PM
I didn't get to finish reading this article. I was distracted by clicking every advertisement on the site.
Posted by: Fraser | February 12, 2008 9:18 PM
Indeed, the fact that a small percentage of users do most of the clicking is not surprising, as it follows the typical power law inherent in human behavior. It's just the long tail in another form. Take another example: a small percentage of Facebook applications have more users than all the thousands of other applications combined. Or for something from the offline world: a small number of countries have more wealth than the rest of the countries in the world combined.
I do, however, find the characteristics of the group interesting. I think it's proof of the fact that online advertising just isn't valuable to most people - if it were, they'd be clicking away. As a user, I click on and engage with ads when they bring me some value, but those ads are unfortunately rare. We're all on the quest for information when using the web - whether it is delivered in an ad or on a search results page or on a website doesn't really matter. Fact just remains that most ads don't contain the information we're looking for or aren't related to what we're seeking. As Internet advertising matures and offerings become available to harness the powerful medium of the web (as opposed to the simplistic banner ads and keyword targeting that exists today), I think we'll start to see far more compelling advertisements - ones that act more like features of the publisher site and less like an intrusion.
Posted by: Jon Aizen | February 12, 2008 10:33 PM
There are two points that I would like to make. Firstly, adverstiment as a character is already changing. By this I mean that ads are moving from intrusive to more of service/useful content. This fact is simply because of a simple reason that users will click on ads if they want to, and they would use a service if its useful. So, we see adsense ads on google search result page which is very profitable for google and facebook ads which bring in money much below expectation simply because intention of users arent there. Secondly, other modes of advertising like Nike+ (a campaign by Nike) and sponsored posts by techmeme are worth a look.
Second point that I want to make is that subsription as a revenue model would never die out. It is because while advertising makes money flow from advertisers to publishers, it is not profiting the online industry as a whole. So, companies either need subscription model if they provide online services or need some other kind of offline money source. Also, users dont mind paying a small subscription if the service being provided is worth it.
By these two points, all I want to say is that even though click based advertising is a good idea and better metric then page views and advertising is meant to grow for many coming days, there are other avenues like service+advertising that is more profitable for both publishers and end users and will be adopted in future. Subscription for value based services also wont die out!!
Posted by: Mayank Kumar | February 12, 2008 10:58 PM
I click only if they are relevant to the article. Many cases you don't see valid ads, so no point in clicking them.
Posted by: Chris | February 13, 2008 3:38 AM
Two thoughts:
1. I wonder how much this phenomenon varies depending on the context of the ad -- are ads in some kinds of sites (blogs, for instance) or categories (e.g., tech news) more or less susceptible than others? Another way in which "all publishers are not equal".
2. Certainly "all clicks are not equal". Although online advertising is still where most of the attention is paid these days, I believe more and more signs like this are pointing us towards a future emphasis on post-click marketing -- taking equally if not greater care with the second, third, and fourth clicks. Need to do a better job of early segmentation on these clicks, instead of treating them like a commodity.
Posted by: Scott Brinker | February 13, 2008 5:06 AM
The low quality of clickers may be surprising, but it's not necessarilly uncommon. In every form of advertising you get people that use the advertising (meaning visit a website, call a company, visit a shop, download a demo) with no intention of actually purchasing a product. Whether online is better than traditional adv. is quite a different matter. The obvious advantage is that it's trackable, so advertisers can react faster if ad is not working (generating sales). However, the ever prised supremacy of online advertising is probably a bit overestimated.
Now, online advertising is really young. In mainstream we have just second generation of it (CPC after CPM) so I think we have a lot more to see. And as the market will change so will the product. In short - I don't think online ad rev is in danger, if it will continue to innovate.
At last about the report itself. I guess the findings would be similiar if not the same for all ad products (if you watch TV for 4 hours a day you hardly notice ads anymore, and you hardly have any money to spend on products you see). Also, the 6/50%, I guess if you strech the numbers you would get that 20% of clickers generate 80% of clicks, which is a simple Pareto optimum. So again - nothing new here. However, I'm surprised the heavy clickers are so old. Normally I would expect them to be below 30. Maybe it's the "not knowing the difference" between search and navigation of the older group...
Posted by: Marcin Grodzicki | February 13, 2008 5:25 AM
Interesting. I stopped using content ads because they were accounting for 90% of my paid search budget and almost 0% of sales. I chocked it up to being click fraud and haven't looked back since.
Posted by: Matt | February 13, 2008 9:50 AM
The bigger issue here is that the Web2.0 monetization scheme has not been able to do what other industries have done in terms of maximizing as much revenue as possible from as few clicks as possible.
In retail, 80% of the revenue comes from 20% of the inventory. The web was purported to extend the long tail, and deliver on the promise that 100% of the inventory should be contributing to the revenue. I think that studies such as this one show that this is not in fact the case. The long tail is a good start in terms of targeting ads, selling ads, or placing ads, but it falls short of delivering ads.
Case in point, Google is selling ads and making billions of dollars whereas the total income for blogs outside of the top 30 who can name their own price from ads in 2006 was a fraction of a quarter of earnings for Google.
However, I don't think that this should mean panic. How many ads on radio and television are listened to versus the number of individuals who listen to the content or watch a program respectively?
The ultimate goal needs to be delivering ads such that when there is an audience, you've maximized the ability to incite that audience to click on your ad. That would solve the delivery problem, and it would truly bring the long tail economic theory to fruition as the premier economic model on the Web.
Posted by: Melih Onvural | February 13, 2008 2:30 PM