Comparing Clickthrough Ratios
Clickthrough is affected by many factors, including the following.
Targeting - The appropriateness of a particular site for a particular ad campaign has a huge effect on click rate. A banner ad touting shampoo that appeared on a site aimed at bald men would probably get an abysmal click rate, while an ad for a magical hair-growing tonic would presumably get a good one. Good ad agencies devote a lot of effort to finding the best sites, and indeed the best sections of sites, for each individual campaign.
Reach - The more times each individual user sees a particular banner, the lower the click rate will be. This seems logical, and it is a very well-established fact. For this reason, the total number of impressions bought on a particular site should represent only a small fraction of the site's total traffic. Different sites have different average numbers of pages seen by each unique visitor. This number is useful in calculating how many people (user sessions) see each banner.
Creative Quality - Ad agency types refer to the banners themselves as "creative". Some banners are much better than others at generating clickthrough, often for unfathomable reasons. For this reason, a campaign usually starts out with several different banners. After a week or two, the banners with the lowest click rates are pulled out of rotation.
Creative Variety - It's well known that the click rate for any particular banner goes down steadily the longer the banner is up. To maximize clickthrough, rotate banners often.
So, the click rate for a banner, or for a campaign, is affected by various factors. Click rate can be a useful measure of effectiveness, but only when all these factors are taken into account. Alas, it's often hard to judge the relative importance of each factor.
Besides click rate, there's another major factor that must be weighed in judging online advertising effectiveness, and that is the cost. This is a lot more complicated than it sounds, as we'll see in the next section.
