Existing Metrics May Perpetuate Ad Blocking

By some estimates, about 10% of the U.S. internet audience is using ad blockers. Of course that number might be higher. RTBlog spoke recently with Patrick Hopf, president and co-founder of ad-tech firm SourceKnowledge, who argued that existing metrics—namely, click-through rates (CTRs)—are serving to perpetuate ad blocking.

“We’re making the point that ad blocking is coming from a misunderstanding of what metrics should be looked at,” Hopf said. “If you’re an agency that’s entrusted with dollars for a brand and your mandate is to get better CTRs, then you’re buying traffic that’s going to accommodate that goal. …Ad fraud and ad blocking are interconnected in a drive to reach certain metrics.”

Hopf maintained that third parties on the supply side have developed disruptive ad-serving technology that pushes users to generate fraudulent clicks to generate the key performance indicators specific brands are looking for.

Hopf wants to get closer to actual people and meaningful data. But the push from ad agencies, he said, is to get “big CTR numbers” and “really, all those old-school metrics are doing is burdening users who are on Web sites, because of the intrusive nature of the ads.” He argued that CTRs and video completion rates misrepresent the user experience.

Hopf took issue with the claims made by agencies that video ads performed well because of a 3% CTR, for example: “People are trying to disengage with the ad. We’re trying to get closer to real users, real data, and understanding about where a user is interacting with a brand or product and seeing the results in a hard metric.” He dubbed that metric “measurable actions.”

So what’s a measurable action? It’s a measure of an outcome for an advertiser.  For example, if the advertiser’s goal is to get people to sign up for a free sample of something, it’s “much more of a direct marketing exercise,” Hopf said. Or, it could be an interaction made on social media platforms, a sign-up for more information, ticket sales, etc. Hopf’s company works with entertainment, auto travel, electronics, and apparel retail clients, among other segments.

“We want to make sure that clients can track intent signifiers and post-click metrics,” said Justin Adler, director of product and marketing, SourceKnowledge. That means that after a consumer sees an ad, the company wants to know whether the person is doing something right away on the site. Does this action indicate an intent to purchase? Did the person add the product to a favorites or wish list? Were there multiple views within the same product vertical? And a measurable action might also include looking at people who abandon a site after an ad view which might indicate a lack of intent.

“Our goal is to get away from complete views of videos and clicks. We want to bring customers to clients who spend more money on a site and at a lower cost,” Hopf said.

In the service of that goal, Hopf shared a case study of his client BuildDirect, an ecommerce-based home improvement products company that partnered with SourceKnowledge to run a cross-device performance campaign.

 Campaign Challenge:

The goal of the campaign was to generate new prospects and re-engage high value site visitors who didn’t initially convert. The campaign sought to generate purchases, free sample orders, and to qualify all leads and conversions based on lower-funnel activity. BuildDirect asked SourceKnowledge to create custom audience cohorts for the campaign.

Campaign Strategy:

Audiences were segmented based on their position in the buying process. They were siloed by the first-touch creative they had been exposed to, the product category vertical of the campaign, ad unit interactional information, and over 50 unique user attributes. Campaigns were created to drive prospecting traffic to each product line with video pre-roll. Then the campaign sought to re-engage prospects with display advertising as each user moved through the conversion funnel.

Ad delivery was weighted to favor new opportunities based on how closely they resembled the best performing cohorts. Campaign data was compared with site and performance benchmarks and delivery was further adjusted scoring each conversion based on return on ad spend and average order value.

Campaign Results:

-- The campaign generated a return on ad spend of 6.62x.

-- The campaign generated an 8% improvement in average order value compared to other prospecting and remarketing partners.

-- SourceKnowledge’s Engage platform achieved a 72% reduction in cost-per-acquisition compared to other prospecting and remarketing partners.

-- In Q1 of 2016,  the campaign delivered more than 13 million impressions to valued prospects in Canada.

-- The campaign generated 490% better margin on ad spend compared to other prospecting and remarketing partners.

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