The world has changed a lot, and so has the digital market. The old algorithms need to be updated to help marketers make better decisions. In line with this, Pinterest outlines its new metric system on ads. Last July 2020, the platform released an advertising guide and updated its algorithm. It also published a report on eCommerce data in June 2020. All these become the basis in outlining their new metrics.
Pinterest notes that clickthrough rate can be a faulty metric. But a simple improvement can make this metric useful. Pinterest’s new metric system on ads goes beyond CTRs. Pinterest considers CTR on ads as the first metric. It’s because they are easy to analyze, calculate, and track. They’re a clear measure of user engagement.
Weighted Ad Engagement Rate
Pinterest then uses CTRs to consider the weighted engagement of ads. This is by measuring the ads’ hide and save rates over CTRs. Weighted engagement is equal to CTR less than 20% of the ads’ hide rate. Here’s a sample table of a weighted ad engagement rate.
|CTR||Hide Rate||Weighted Ad Engagement Rate|
|Ad Sample No. 1||1%||0.01%||0.8%|
|Ad Sample No. 2||1.2%||0.05%||0.2%|
Weighted Engagement on Neighboring Organic Content
Pinterest also takes into account the weighted engagement on neighboring organic content. This is by looking at the data of a control group and a treatment group. Organic reach equals the number of times an ad has been without a paid promotion. The data under organic reach equals the data under a control group. Data on a treatment group is based on the A/B experiments for the ad. To get the final engagement rate of an ad, Pinterest divides the weighted engagement on neighboring organic content over the weighted ad engagement rate.
To sum it up, Pinterest now accounts for the engagement rate and relevance of an ad besides single-handedly using CTR. Pinterest outlines its new metric system on ads as of 09 November 2020.
Implications for Marketers:
Pinterest’s new metric system on ads is a better reflection of the performance of an ad. Marketers should look into these new metrics. Considering different elements can help them make better decisions in their ad approach. Pinterest boards are a great option to advertise new products. They make discovery easier. With the platform’s new metric system on ads, they can eventually lift conversion.