Commentary

Bring On Good Measurement!

Online advertisers are blinding themselves. And they’re doing it on purpose.

The digital channel enables us to track and gather actionable performance data virtually in real time. But we don’t do it. I’m not referring to the much-maligned click-through rate, or CTR. Even though CTR still shows up on an RFP from time to time, most of the industry has rightly downplayed the significance of the CTR as a valid performance indicator.

I’m talking about the antiquated “last click, last impression” standard of attribution. This is the narrow view that 100% of conversion credit should be attributed to the last click, and in the frequent absence of a click, all credit should then go to the last impression. At a minimum, this practice blocks advertisers’ ability to understand the true contribution of each media partner to their online campaign, leaving them with limited information on how to best scale their online efforts. 

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The alternative and more sensible approach is to at least measure all of the advertising events, including ad exposures and consumer actions occurring prior to a conversion, and begin to assign a value accordingly based on one’s ultimate goal. In this type of system, vendors would be incentivized appropriately to convert in all phases of the purchase funnel, rather than just “bottom feed” by competing for the final-final impression and ignoring the branding that sparked a consumer’s initial interest. Woody Meachum, a director at OMD, says, “I like strategies that reward publishers based on their true ability to influence conversions: i.e., by demonstrating the value of that ad exposure in delivering a certain type of audience. Such strategies enable us to scale our clients’ campaigns at a more efficient cost per acquisition.”

The technology to provide a more advanced form of attribution has been around for years.  One of the original solutions, Engagement Mapping by Atlas, was launched back in ’07/’08. Today, a suite of premiere solutions, such as ClearSaleing and VisualIQ (no relation to OwnerIQ), advance the full-attribution agenda. Comparable products are available via standard ad-serving systems. But the idea of full-funnel exposure and the adoption of greater attribution still struggles to take hold.

Several factors contribute to this. The first is a lack of education and institutionalization on the buy side. Most agencies will say they deploy a version of attribution beyond last impression. But usage varies widely by client. And it varies not based on need, but rather by account teams that see the added cost of implementing more advanced measurement but don’t understand the benefit to their clients.

The second contributing factor is on the sell side, where many of us maintain what VisualIQ CEO Manu Mathew rightly calls a ‘loser’ mentality. “Some of largest and most successful publishers and vendors have built their solutions to win the last click/impression, and they’re very good at it,” says Mathew. “These companies fear they would lose in the short term if the measurement standard changes, because some of the credit will be attributed to other companies.”   

However, with the growth of programmatic buying and increasing interest among advertisers to leverage “big data” across their online marketing campaigns to generate ROI, the importance of proper attribution is becoming obvious. The current last click/impression standard places too much focus on bottom-funnel strategies. That in turn creates a competition among vendors to convert the same consumers — the individuals in an advertiser’s retargeting pool; those who have already shown interest.

In addition, as many advertisers are starting to use data-management platforms to build more comprehensive advertising targets, measuring these targets on the last click/impression standard can devalue the quality of customer targets.

The solution is to measure every impression served along the path to purchase. Such measurement practices will foster long-term success for the entire industry. As things stand today, the system fails to help the one group that is ostensibly its center: advertisers. The players brave enough to adopt better measurement will initially lose some credit for conversions. It’s better, though, to accept this near-term loss, and rebuild companies and technologies around solid measurement, so we can all compete to serve the factors that actually drive business.

 

3 comments about "Bring On Good Measurement!".
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  1. Marc Engelsman from Digital Brand Expressions, May 8, 2013 at 11:01 a.m.

    I totally agree that marketers need to move away from last click/impression attribution models to justify spend. Google Analytics assisted conversions and conversion path tools are a good place to start to see the integrated impact of all impressions on results.

  2. Pete Austin from Fresh Relevance, May 8, 2013 at 12:50 p.m.

    The solution is testing. To keep this comment short, here's a simplified example: Suppose you have several technologies to engage, recovery and convert. Simply run an experiment, with one test group of shoppers per techonology. Turn them off and note the effect on conversions.

  3. Lisa Naughton from Multi Channel Reporting, September 5, 2013 at 12:37 p.m.

    We have just finished developing a system that reports on actionable items, removing all the distractions of over thinking every click. In the end all that matters is sales. Check us out.
    Www.multichannelreporting.com

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