Click-Through-Rate (CTR) in Google AdWords or PPC is like opening a Direct Mail piece

Click-Through-Rate (CTR) in Google AdWords and PPC (pay per click) is like
opening a Direct Mail piece, if you
think about it. Here is how:

  • Direct Mail
    involves preparing a mailer that has a letter and some kind of a response
    form along with a reply envelope. This is what we call "junk
    mail" and last year US Post delivered  84 Billion
    pieces of junk mail. By definition, junk mail is something you just throw
    out. Research suggests that 60% of Americans do respond to
    printed offers/appeals.  The trick is in getting the right mailing
    list and framing the right content in the direct mail piece. Here, data
    analysis can play a big role. For example, if a bank wants to send out a
    new credit card offer to its existing customers and decides to mail all of
    its one million customers it might be wasting money. Instead, by identifying
    key characteristics of customers that might predict better response the
    mailing list can be cut down to say 100,000 from 1 Million saving the
    mailer cost for 900,000 mailers. In either case, the mailer reaches the
    customers' home mailbox and may or may not be opened. The open rate of a
    direct mail piece is sort of similar to the CTR i.e. number opened divided
    by number mailed.
  • Click-Through-Rate (CTR) is similar to the open rate of direct mail. CTR is the
    number of times the Ad is clicked (like letter opened) divided by number
    of times the Ad is shown or the impressions (like the number of letters mailed). However, there are important differences between CTR in PPC (Pay Per Click)
    programs like Google AdWords  and Direct Mail:

    • On the Internet, the advertiser pays for only clicks,
      not impressions. In Direct Mail you pay for every letter and postage
      whether or not the letter is opened.
    • On the Internet, a skillfully managed Google AdWords
      campaign shows Ads and content exactly when the Internet searcher is
      searching. The ability to show when someone is looking is probably the
      best thing about search advertising
      . In contrast, the best crafted Direct
      Mail campaign is still called "junk" mail.  OK Internet
      banners can be sometimes annoying, but the overall Internet advertising
      has so far avoided  the"junk" label mainly because it is relevant to search.

So will
Direct Mail disappear? Not really, because there will always be room for printed
stuff at the local level like local newspapers for all manner of services like fall cleanup, plumbing
etc. But even local plumbers will want to advertise on the web because they can
show Ads only around a specific geography by geo-targeting. More on
that in a later post. Contact StratoServe.