Why CTRs do not make sense now?

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Until 5 years back one of the most important metrics performance marketers used to look at while evaluating the performance of a campaign was- CTR.

I have seen marketers looking at CTR data first, and conversion data second.

CTR is such a relevant metric when you look at closely how it is calculated- clicks/impressions*100

The number of people who saw your ad vs the number of people who clicked on it.

Today, Talking about Meta platforms, CTR ads to more confusion than helping out.

There are many scenarios that you will observe if you look at CTR closely today:

• Creatives with less CTR have Lower CAC

• Creatives with less CTR have higher CR (conversion rate)

• Creatives with less CTR have better RoAS

• Creatives with high CTR have high CAC

• Creatives with High CTR have low CR

• Creatives with high CTR have low RoAS

  and so on

The same was the case with Look-a-like audiences.

Until sometime back (around 3 years) Look-a-like audiences used to work like a charm. Today that’s not the case.

Why is this happening anyway?

Because of 3 primary reasons

1. Apple introduced a feature that limits tracking in apps.

2. The European Union has strict rules about how user data can be stored.

3. Web browsers are getting rid of third-party cookies.

On top of that, Android is planning to introduce a new privacy feature next year.

Ad machines are now getting fewer signals about audience behaviour on different platforms.

Earlier, you would target your ad creative to a very specific audience set. So it was audience first and creative second approach.

Today, it’s the other way around. You make a specific creative and run broad campaigns.

Ad machines figure out the best working creative combination with the help of engagement people show on the ad creative and their behavior upon landing on your page from a creative.

So it is important to try out different creative combinations to understand which one is working better.

Relevant creatives find their way to converting audiences.

The second point is on how to measure the efficiency of a creative now.

Since CTR is not an important metric most campaigns use open targeting now which means your ad is shown to many more people now compared to what it was 3 years ago for Facebook machines to find the right audience for your ad.

Now you measure the efficiency of a creative in 2 ways:

• Number of events that happened that the creative was pushing for (sign-ups, downloads, purchases, leads etc.)

• At what cost (cost per sign-up, cost per download, cost per purchase, cost per lead etc.)

Bottom funnel metrics are looked at to measure the efficiency of creative communication.

Most of the time, an Ad will have low CTR (because of a higher denominator) but can result in more purchases or low CPA (cost per acquisition) purchases.

This is where one of the most critical soft skill comes into the picture- Collaboration.

In most companies, performance marketers do not have direct control over creatives. Creatives are delivered by the brand team.

Performance marketers set them up (mostly with open targeting), start running them and let the machine figure out the best-performing ones.

Today, brand managers and performance marketers need to work together to try out different communication routes or different thematic creatives and see which one needs to be double-clicked to get better conversions at a lesser cost.

If you are the one who reviews the performance of a campaign primarily with performance team, you need to change that.

Both the brand and performance team need to work hand in hand to drive a project to success.

This newsletter puts forward the perspective of CTR on Meta ads only.

The role of creative communication has also enhanced in performance marketing because of these reasons and I break this down in detail in the Dream Performance marketing masterclass.

The next batch starts in March.

Learn the latest updates in performance marketing, how digital is evolving and how businesses can solve efficiency and scalability problems with performance marketing.

There is a special offer for the Top Decoder’s community (TDC) members.

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Cheers,

Apurv