IAB UK CEO: How Did We Become So Obsessed By Click-Through Rates?

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In 1994 Hotwired.com (today Wired.com) launched the world’s first banner ad.

Its click-through rate (CTR) of 78% remains unheard of, in-spite of the fact banner ads had to be downloaded over measly dial-up connections.

For marketers, it was their first taste of a digital advertising revolution. They were handed the ability to know how many people saw an ad, and even further, know how many people interacted with it. From there the digital display ecosystem ran riot with largely the same game-plan: eyeballs. Lots of them.

Unfortunately, this is where the problem lies.

Last year from the Advertising Week Europe stage, Jon Mew asked an audience largely to blame whether given the chance to revisit these early days and push a reset button, would we do the same things today?

As the CEO of the IAB UK, Jon’s role is to remind the industry of the perils of short-term thinking.

Q: If given a reset button, would we behave in the same way?

I think the answer is probably no. We’re much more likely to learn from our mistakes and change some of the unintended consequences of our behaviors. In particular how we have become obsessed by click-through rates, which has led to some pretty bad behaviors.

In digital we have become so obsessed by this last click that it becomes very easy to forget everything that came before it. We reward people who got the last click.

Q: What role does the IAB have in promoting change, and what does good behavior look like?

We have a really important role in helping people think about the long-term but there is clearly only so much we can do.

When you look at particularly successful businesses over the past 20 years it is possible to take a number of lessons and apply them today. I believe tech companies, for example, have been so successful because of the culture they create for themselves internally. It comes down to the fact that they focus on the long-term.

Amazon has worried less about making a profit in the short-term, and instead, have focussed on owning entire markets.

This year marks the 20th anniversary of both the IAB and Amazon. And if you look at the first letter written by Jeff Bezos back in 1997 to his shareholders, he wrote about how Amazon is going to be different and focus on the long term. They weren’t going to do the wrong things and mimic others in an attempt to make money as quickly as possible.

Amazon has worried less about making a profit in the short-term, and instead, have focussed on owning entire markets.

It is so hard to compete with that because so few companies in practice actually think like that. They use something called ‘The Law of Requisite Variety’. It is the principle of looking at a market and getting as much data on it as possible to try and determine a suitable approach. It helps them understand why people win and why people lose, and whether certain markets are appropriate for them to enter into.

Q: Can you share any specific initiatives the IAB has run recently to help educate the advertising and marketing industry?

Yes. We launched something called the Gold Standard recently. This started with our 24-company board which comprises some of the biggest brands in the world, to all agree to do three things.

We asked them to do this so they would lead the industry in thinking about the things we had to do to ensure that in a few years’ time we would have a digital advertising space that is thriving.

Everyone agreed to implement ad.txt, which is a technical solution designed to protect web publishers from any unauthorized companies selling their ads via programmatic ad exchanges.

All of our board also agreed to work with Jicwebs with a view to signing up to DTSG. This is around brand safety and the industry standards surrounding it.

You can do very clever things online. I gave an example of being able to track people’s facial reaction to understand how engaged with an ad people are as they watched it.

Finally, they agreed to stop serving up ad experiences that consumers don’t like. The Coalition for Better Ads produced some research identifying 12 ad formats that consumers disliked.

Q: In your talk at Advertising Week Europe in 2017 you gave some examples of ads that you felt were measuring things better beyond click-through rates. Can you share them with us?

In no other media do you try and measure things via click-through rates – you’ll use econometrics, you’ll do brand studies, or intention to purchase. For some reason we don’t use these in online probably because they are harder to measure.

You can do very clever things online. I gave an example of being able to track people’s facial reaction to understand how engaged with an ad people are as they watched it. There are a few companies who offer services like this, where they can monitor how people look at a screen.

Another example was a gaming app called Sea Hero Quest that pooled data from thousands of handsets and used the results on player behavior to inform scientists how people think about problems and challenges. They were then able to use that to help understand more about Alzheimer’s. Charity’s do some amazing things using digital. VR is a great example. Headsets just with Google cardboard can create incredibly powerful experiences.


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