The following post is a special contribution from Jay McQuillian, Director of Chitika’s Data Solutions Engineering Department:
As the head of the Data Solutions Engineering department here at Chitika, I work with my team every day to find interesting trends and stories about the world of online advertising by analyzing data found in our extensive ad network. Chitika Insights, the research arm of Chitika, produces a series of reports each week covering trends on the Internet and also creates special reports and tools for advertisers and marketers to plan and optimize their campaigns for the best possible ROI. One of the most exciting and pertinent tools we have produced is the Chitika Ad Monetization Matrix or CAMM. The Boston Consulting Group Matrix and the Gartner Magic Quadrant have long been fundamental tools in conducting business analysis for a wide variety of industries. These tools are invaluable in helping businesses direct resources toward the segments with the highest worth or potential to optimize their revenue stream.
In an effort to contribute a similar tool to the world of online advertising, my team here at Chitika Insights created the CAMM, which measures the three key aspects of online advertising markets: volume, click-through-rate (CTR), and the value per click to an advertiser (CPC). In our quadrant, each category (like Health Care, Real Estate or Transportation) is represented in a circle that is proportional in size to its market share or volume. On the horizontal axis, we plotted the CTR, which directly corresponds to the likelihood of an ad being clicked by a user. Finally, on the vertical axis, we plotted CPC, which refers to how much an advertiser is willing to pay a publisher when an ad is clicked. The quadrant can be broken down into four distinct market segments, as seen below:
Some interesting insights:
- Insurance can be found within the Special Interest segment, as it captures the highest CPC across all quadrants, but has a relatively low CTR
- Banks reside in the Click Kings segment, with exceptional performance in both CTR and CPC
- Transportation captures the highest CTR but with the second-lowest CPC, it ends up categorized in the Economic Essentials segment
- Media has the lowest CTR and CPC across all units, and takes its place in the Obscure & Unpopular segment
Why is this matrix important? By understanding the implications of each of these market segments and incorporating them into dynamic campaigns and SEO strategies, advertisers can effectively increase the potential for site monetization. One of the biggest aspects of control for publishers and advertisers is the volume of their particular markets. Using a tool like this can help you discover where your ads have too much or too little volume, and adjust the volume within categories by looking at revenue produced.
Ads with high CPC but low CTR (Special Interest) are really meant for a narrow audience – meaning, that to maximize their monetization, they should only be shown in cases in which the audiences intent is clear (e.g., showing ads for baseball gear on an sports blog). Alternatively, ads with a higher CTR are generally applicable to a wider audience, and therefore do not require such targeted scenarios to be profitable.
Interested in more reports like this from Chitika Insights? Head over to our blog for the latest studies covering trends on the Internet as seen on our network. You can always reach us by emailing firstname.lastname@example.org with any questions you may have!