Pinterest developed new process to provide more accurate reflection of ad performance
Pinterest has outlined a new process that it's developed which looks to provide a more accurate reflection of ad performance than basic click-through rate data, which Pinterest says "suffers from some serious shortcomings".
As explained by Pinterest:
"There’s a joke about a drunkard who drops his keys on a dark sidewalk and then walks away to a streetlight to find them because the light is better over there. Similarly, CTR sheds a lot of light on things, but it’s not the key to user engagement."
Pinterest notes that CTR can be a flawed metric because it fails to take in additional nuance, like where an ad is placed ("ads higher up the page are more likely to be clicked"), while it can also incentivize clickbait if it's used as a focus goal. Pinterest also notes that with more advertisers looking at variable goals (like awareness, view time), CTR is not always the best representative data point to reflect user intentions.
Pinterest also says that CTR doesn't take into account negative signals:
"Users have a number of ways they can engage with content on Pinterest besides clicking. They can Save the content to one of their boards for future inspiration or Hide it to indicate they don’t want to see this sort of thing. These are rarer events than clicks, but they give strong signals of user interest in or dislike of an ad."
Those negative signals, while less common, are important, and can provide more insight into your ad metrics.
So how can you better account for these elements? Pinterest has come up with a new, weighted formula for its ad performance metrics.
"We incorporated these concerns to create a new metric that combines multiple engagements (with Save having a positive weight and Hide a negative) and accounts for position bias by comparing this to the engagement on nearby organic (non-ads) content."
That, essentially, means that the final calculation takes into account negative and positive signals, so your weighted engagement metric provides a better indicator of performance by accounting for these actions.
In this example, you can see that the lower ad had a better CTR, but with a weighted hide rate factored in, it provides a more accurate indicator of actual performance overall.
Is that a better approach? I mean, if people click through, that's often the key goal, and while some others may hide your ad, that doesn't necessarily mean that those who have clicked through are any less likely to be interested. Pinterest says that this approach provides a better indicator of overall ad quality and performance, but it is relative to your end goal and how you view each response.
Pinterest applies similar weighting to placement, accounting for reduced click rates lower down the page.
The end result, Pinterest says, is that this not only facilitates improvement in data tracking, but also in performance, with the new, weighted metrics leading to better results in ad relevance and engagement.
Pinterest is looking to take these studies further, and provide better ad metrics to help maximize campaigns, which could eventually provide Pinterest marketers with more data points and insights on ad specifics.
And that could be a better way to go, with a whole new metric focus for your ads, with weighting taking into account different elements and responses to help guide your decisions.
It's an interesting experiment, which shows promise, and could eventually have a major impact on how your approach your ads.
You can read more about Pinterest's CTR improvements here.