• by David Danziger , August 10, 2018

It’s hard to imagine the CMO of a CPG company or retailer eagerly requesting information on proxy metrics like click-through rates or on-target percentage for their back-to-school ads. Rather, CMOs want to understand how their advertising efforts affect overall revenue and how to improve upon that same success again and again. But in the world of digital advertising, we spend a lot of time talking about proxies.

So in an age when 90% of all sales still occur offline -- although digital media consumption is at an all-time high -- advertisers should move beyond surrogate metrics. Instead, they should adopt holistic ones, including overall revenue and sales lift, to represent overarching business goals. After all, understanding how advertising efforts affect the business’s bottom line is crucial to brand success.

The Right Data

Focusing on proxy metrics for marketing success is too narrow a scope. Rather, advertisers should understand which online ads -- by site, time, audience segment, and creative -- actually motivate people to purchase online and offline. And many data companies in the industry help advertisers do just that.

Mobile-oriented companies offer measurements for in-store traffic, whether at retail stores, auto dealerships, or theaters. Companies with access to spend-level credit card data provide insight into consumer purchase amounts at a given location. And companies with access to SKU-level data share measurements on which products, brands, and categories are bought.

Still other companies can help advertisers understand how phone calls impact the customer journey -- a common request for insurance and cable companies.  For nearly every consumer touchpoint, there’s likely a data company bringing advertisers another layer of information to better measure their campaigns.

The Bigger Picture

As the marketplace of data providers matures, larger advertising platforms find ways to ingest this avalanche of data and make it actionable. With the help of machine learning, advertisers can interpret and execute on this data. And they do so in a way that achieves more than increased click rates -- it drives business growth. This progress stems from technology companies training AI to focus on high-level metrics like overall sales lift as opposed to proxies.

Consider a CPG brand using a demand-side platform (DSP) to discover new prospects. The brand could tell the DSP’s AI to find an audience pool to drive more ad clicks. In the world of last-click attribution, the result would be higher click rates, but not necessarily better performance.

Or the brand could take a big-picture approach. By asking the AI to find an audience pool that mirrors the profiles of their most loyal customers, the brand will reach the best audience and build a more efficient strategy, growing CPA performance as a result.

Ultimately, no matter which metrics the digital ecosystem makes available, the goal of every advertiser, brand, and CMO remains the same: driving business growth. So, whether executing campaigns for back-to-school or planning for holiday, advertisers should look beyond proxy to inform how they plan and buy all media -- both online and offline.