A Look at Post Click-Through Conversion Rates

Marketers invest a significant amount of time and money in online marketing campaigns aimed at delivering positive post-click advertising experiences. However, less than 1% of ads get clicked on and 95% of those clicks never lead to a sale. In fact, post-click experiences vary so widely in the same market, it’s likely that one competitor is converting more than five times as many customers than other competitors in the space.

Compete looked at the post-clickthrough conversion rates among wireless carriers. Across 20 campaigns, an average of 3.4% of those who clicked through an ad and visited the carrier’s landing page purchased online from that carrier in the same quarter. In the top quartile, this jumped to 7.8% of visitors. In this instance, improving performance from the bottom quartile to average or best-in-class could translate into a 2-6x improvement in conversion. Assuming the cost of changing the landing page experience is minimal, this increase in conversion would be a direct increase to ROI.

In the credit card space, we have seen instances of campaigns with even greater disparity in conversion between competitors.

Given these kinds of disparities, and the potential for quick, direct improvements to ROI by boosting post-click through performance, we think CMOs spending money in the Online Channel should all be asking their teams some questions:

• What is the Best in Class performance in our industry for engaging and (if applicable) converting people who click on our ads?*
• Where do we stand in relation to Best In Class?
• What can we learn from all the other campaigns our competitors are running?

*According to Compete analysis, Chase (CCF) and Citibank (C) campaign conversion outperformed American Express (AXP) and Capital One (COF) by 15-30x.

Comments

[WD:]

Seeking Alpha is running ads in their columns now? Hmm.

2008 Sep 02 04:56 PM

[sumosama:]

I think you mean JPM for chase...

2008 Sep 03 11:13 AM

[conway:]

this analysis is interesting but misleading.

more important than conversion is the profitability or each conversion.

if only 1% of citibank's conversions gets booked and turns profitable and 100% of cof's gets booked and turns profitable i'd say cof is best in class... the NPV/new account for each of these banks implies this is the case.

2008 Sep 04 02:46 PM