When is a click a click in CPC basis for PPC

All clicks are not made equal

Are clicks by themselves sufficient? Consider the following scenario (See table):

On the face of it all three scenarios are attractive since they have about the same CPC and the variability in the number of clicks between the scenarios is low.

Now, reconsider these scenarios with business metrics added to them:

As is apparent from a business point-of-view the second scenario is far more attractive than the other two scenarios, which on a mere CPC basis are as attractive.

While clicks and the attendant CTR is an improvement over conventional media metrics, the above example shows why it is not enough.

To make it complete, the click should lead to an interaction that has a demonstrable business value. Such business values depend upon the business situation. For example, in an e-commerce situation, the business value would be an online purchase, for a branding campaign it could be the page views on a website or the increase in time spent on a particular page. The fact is that a business value can be determined and needs to be determined, to reach the ultimate holy grail of measuring return-on-investment.

So buying clicks without the attendant business value is a chimera that gives a false assurance that money is being well spent, when in actual fact it isn’t.

When is a click a click?

Numbers easily seduce hard-nosed businessmen. However, are the clicks reported by the ad-servers for real?

Typically, a click on an advertisement leads to a destination – either a web-site, a landing page or a transaction page.

There is sufficient evidence, both, anecdotal and backed by tracking data that the two numbers often mismatch, sometimes as high as twice as many clicks being reported as the page-views of the destination page.

In the early days of PPC these were usually attributed to click fraud. This to a large extent has been reportedly curbed to a very great extent.

However, a number of technical factors also contribute to fewer than reported clicks being registered on the destination page.

So the adage of ‘Half-my-advertising-is-wasted-I-wish-I-knew-which-half’, continues to be as relevant to PPC.

This in fact has now extended to the social-media network environment and, the leaders in the space, Facebook and Twitter, have announced their commitment to weed-out malpractices that lead to inflating metrics that demonstrate the success of campaigns on their lack of it.

The bane of the algorithm

Notwithstanding these inherent issues in evaluating whether PPC is an appropriate strategy, the twin factors of budget control and RoI, lead a headlong rush of advertisers opting for PPC campaigns that are managed by algorithms.

These algorithms promise to run the ads in millions of scenarios within specified constraints of budget and desired number of clicks. They certainly meet the twin goals of budget and clicks, and even progressively manage to opitmise the plan by lowering the CPC.

The moot point though is whether the clicks deliver business value or are a mere fig-leaf to justify the enrichment of the purveyors of the click.

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