New customers are what you need

No ecommerce site owner needs to be told that one of the best ways to keep growing its business is by adding new customers or clients. But when digital marketing and advertising vendors are approaching online businesses about using their services, many times marketing managers for these online companies still have that knee-jerk reaction and ask, "What sort of click through rates can you get for us?"

This, plain and simple, is the wrong question to ask.

Stop asking about click through rates

new customers and click through rates

Click through rates, while they can provide you some insight into your business, in truth only scratch the surface on how effectively your marketing and advertising dollars are being spent. If you have a higher than average CTR (say 0.5% - average CTR is 0.06%), which garners you 1000 clicks on your display ad, but not one of these clicks parlay into purchases, sign ups for your e-newsletter or new visitors returning back to your site are any of those clicks really meaningful?

Here are some better indicators to see how your marketing and advertising spend is working for your ecommerce business:

Bounce Rate

Based off of this post in, the range of bounce rates for ecommerce sites are the following:

  • Minimum Bounce Rate - 14.3%
  • Maximum Bounce Rate - 68%
  • Average Bounce Rate - 33.9%

So, to take the previous example of 1000 clicks on a display ad found online for your business, if 68% of these clicks to your site bounce (680 of the 1000), then you need to seriously question if the landing page these visitors are being taken to needs to be rethought altogether or is this display ad you are using to entice new visitors to your site misleading in some way.

View through conversions

View through conversions are a much better way to measure of how your display ads are moving new customer down the sales funnel. View through conversions is when a user sees a display ad, does not click on it, but then because the user was exposed to this ad goes to the site directly or by searching the company in their browser before heading over. The usual window for attribution for a view through conversion is 14 days.

Click through conversions

Click through conversions is one of the most direct ways to measure how your display ads are performing in regard to your sales. A click through conversion is when a user sees a display ad, clicks on it and then converts. The normal window for attribution for a click through conversion is 30 days.

.06% CTR

Understand this number above - .06. This is the average click through rate across all ad formats and placement ads (source: display benchmarks tool). That means less than 1 person will click on a display ad for every 1000 impressions. For a guy who enjoys writing immensely, I actually love math, so let's break this down:

Fictitious example of a display ad campaign:

  • 1,000,000 impressions @ $3.50 CPM = $350 spend.
  • With the average CTR of .06%, this means 600 clicks (not users) were initiated on the display ad. In the second-party data we collect in our co-op at Hivewyre, we find there to be at least a 2:1 ratio between clicks to users on ads. So for this example, those 600 clicks are coming from at most 300 people (and remember, a person may click 2-5 times on a display ad if it's not loading fast enough or if the leave the site and then are shown the same ad again and decide to hop back to the site for another look, which would drop this number down even further).
  • If you have a good bounce rate (20%), you will be left with 240 people (300-60) remaining on your site.
  • Average conversion rate on ecommerce sites is between 2-3%, if we say 3%, then 7 visitors would convert.
  • To get a 3:1 ROAS the average purchase needs to be $150. If a 10:1 ROAS is required, then this brings the average purchase up considerably to $500. Depending on the product/service you are selling, a $150 or $500 average sale maybe fine (high-end jewelry, furniture, appliances, electronics, etc.), but if you're selling kitchen magnets at $10 a piece, you may think that spending $350 is not fiscally responsible, if you're only tracking CTR.

As a kitchen magnet ecommerce company, you may have purchases of $900 from your $350 marketing campaign, but because you are only tracking CTR, where you only see 20 magnets purchased from 7 visitors ($200), you see this campaign as a failure.

If you want to get a better understanding of your marketing strategy, you need to track way more than just CTR data; you also need to find ways to increase traffic to your site. Because the more people visit your site, the more people will make purchases based off of simple conversion rate percentages.

Time to start filling that top-of-funnel in your marketing strategy.

Keep that top-of-funnel full

top of funnel marketing and new customers

What second-party does better than any other data (yes, even 1st party) is give you access to qualified new users who are actively on sites, just like yours, looking to make purchases in real-time.

3rd party data is based off of demographics, and although you will get a hellava lot of it, many times most of it is garbage; even if this person you are targeting fits the demo of your online store, it doesn't mean he/she is looking to buy something right now, does it? It's sort of like going to a thrift store - a lot of stuff  on the shelves that may at first look pretty cool (♬♪I'm gonna pop some tags...♪♬), but you soon realize as you shop further along, that 98% of it is useless to you. 


First party data is great data because it gives you real insight into your visitors, but does nothing for you when it comes to learning about or growing new customers. This is where second-party data comes in. Because companies like ours can track what type of ecommerce sites a user is visiting, we are able to show these users ads, which are quite relevant to what they are shopping for, when they leave a competitor's site.

Remember, while CTR is something to be aware of when tracking your marketing campaigns, the bigger focus for any ecommerce owner should be how to find new customers who are a good fit for its business by using top-of-funnel marketing practices, like second-party data and ecommerce data cooperatives.