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Todd Kellner

Open Season on CTRs
By Todd Kellner

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Ads in your newsletter get at least a 15 percent click-through rate, right?

No? Okay, look at some possible issues: Is your list clean? Double opt-in? Ads relative to your audience? Good, consistent content? Yes, yes, yes and yes, but you're still getting a 1 percent CTR while all the recent industry reports regarding email advertising show a 2-15 percent average CTR?

Here at List-Universe, I am involved on a daily basis with both our own newsletters (such as the one you're reading right now) and the 900 newsletters on our Opt-Influence advertising network. I get bombarded with the question "Why am I so far below the industry average?" from some of the best in the business, publishers who have been around for years, who know what they're doing, who faithfully read their Ezine-Tips ;-)

A few obvious possibilities are bandied about:

  • Campaigns are often over-delivered in an effort to boost CTRs. This is more common in the instance of solo mailings, but some newsletter publishers will deliver the ad in more issues than were paid for.

  • Many of these reports are commissioned by folks who have a vested interest in seeing high CTRs reported, as a weapon against other forms of media. Often, company officials will self-report inflated figures in an effort to push the curve.

  • Some reports are released by list vendors and newsletter brokers. For the same reasons stated above, they manipulate numbers in an effort to show the outside world that, yes, "email advertising is highly effective, and especially on our network."

And it is effective, when done properly. A 15 percent CTR is, however, pie-in-the-sky. How can these numbers be "manipulated" without compromising the validity of the report?

Open Rates

Much has been written about open rates. Open rates are the assumed percentage of recipients who opened a given delivery. Advertisers often take these rates as gospel, but most understand that they are best used as a guide over time. Open rates cannot be computed for text email, which lowers the rate on multi-part deliveries, and recipients who peruse email through preview panes inflate the rate. But that's a discussion for a future Ezine-Tip.

To calculate a Click-Through Rate, divide the total number of clicks or responses by the total number of impressions. However, I've seen several campaign reports come across my desk recently that computed the CTR using the open rate instead of total impressions:

A) clicks/impressions = CTR
B) clicks/opens = CTR

Calculations for a 150,000-impression campaign purchased on a $20 CPM ($20 for every 1,000 impressions) with a 10 percent open rate (15,000 opens) and 1500 clicks:

Ex A:
1500 / 150000 = 1 percent CTR

Ex B:
15000 / 150000 = 10 percent CTR

My response to the publisher is generally, "Are you saying that I only have to pay for opened emails?" Because $300 is a heckuva lot cheaper than $3,000. Obviously, the truth is that basing your CTR on your open rate is an easy way to inflate a campaign's perceived effectiveness. It's also true that this is now common enough in the industry to be termed "pervasive." I believe that the confusion over the definition of "Click-Through Rate" is an important contributing factor to the inflated CTRs reported in industry research.

And yes, I know that 15 percent CTRs can and do happen. But if you're consistently delivering a 1 percent CTR to a qualified newsletter audience that's buying product, there's no reason to panic. Just beware of unrealistic expectations.

Ezine-Tips for July 16, 2002

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