Embracing Outcome-Based Measurement For Growth

Ever heard of “Don’t buy if you can’t track”? This is particularly true for digital advertising. In the U.S., advertisers are expected to spend $129 billion in digital media this year, per eMarketer.

While the business objectives could be anything from increasing brand preference to foot traffic or sales, most digital media KPIs tend to stick to the basics, such as percent in-target and click-through rates, which many refer to as “vanity metrics.”

As easy as it is to optimize for CTR, it often doesn’t align with true business outcomes. In fact, when analyzing location data vs. online clicks, there is little overlap between users that clicked and users that visited store locations.

How about optimizing for demographics? Just remember that both Lady Gaga and Kellyanne Conway belong to the same popular demo: females 25-54. Beyoncé and Sarah Sanders are the same age, both “women with children present at home.” While demographics help inform some of the targeting strategy, it is insufficient as the key measurement metric. 

The industry has been shifting its focus to outcome-based measurement.

The MRC, for example, has been working on establishing guidelines and shifting the measurement focus away from current basic media metrics, including considering deprecating clicks as a measurement metric for accreditation in the future. However, for publishers like Google, expected to receive over 37% of U.S. digital ad revenue this year, according to eMarketer, “clicks” is part of its currency.

Just like viewability and IVT (invalid traffic), it will take time and discussion to potentially diminish CTR.

The first challenge is to define what outcome-based measurement is. While companies may define their own KPIs, there should be standards, core metrics on measurement parameters, process, controls and inference models.

The Underlining Challenge: Identity

When it comes to measurements, data and methodology are key. Given the complexity of the media schema, it would be ineffective or even misleading to measure outcomes in silos. Even the most digital-centric consumers don’t live exclusively in cyberspace. Connecting the dots between various platforms and attributes to the proper users is critical to understand the outcome of your marketing efforts.

To solve identity does not mean for everyone to collect and store PII. It is to connect different media usage and actions to the right unit, whether it is individual or household. To find out whether a QSR campaign that uses TV, desktop, mobile browser, mobile in-apps and outdoor billboards, is driving consumers to visit, the attribution provider will need to connect various datasets to ensure the people exposed to the messages were the same individuals that went to the restaurant.

It seems intuitive, right? Especially since we have dozens of identity-resolution providers, all with access to a tremendous amount of data. The reality is that each of them has their own methodologies, strengths and gaps.

The same business logics that work for activation may not be adequate for attribution. Qith GDPR hitting its one-year anniversary, and the anticipation of CCPA, the solution seems falling behind the challenge.

In certain aspects, walled gardens could be the biggest obstacles for outcome-based measurement. If a third-party measurement provider does not have access or visibility into the walled gardens, is the partial and fractional measurement result still valuable and actionable?

One approach to overcoming the challenges from walled gardens in cross-site measurement is a combination of MMM and MTA. Smart marketers have tested “walled garden on” vs. “walled garden dark,” which gave them a sense of walled garden’s incremental impact on ROI. Combining with MTA outside the “walls” would provide certain visibility for planning and validation. While it is less than ideal, it’s a start.

What’s Next?

The recent announcement on blocking cross-site cookies in Chrome has stirred conversations among measurement parties. While the details are still TBD, the balance of privacy, accountability and transparency is a delicate play. The same goes for the hot-off-press Safari Privacy Preserving Ad Click Attribution and “Sign in With Apple.” 

If we don’t want an oligopoly between the walled gardens, their moves impact on independent third-party measurement should be everyone’s concerns.

In our society, ad-supported content enables a free internet; it is incumbent on the industry to pursue outcome-based measurement in order to prove and improve the value of our advertising efforts. While there are barriers and challenges ahead, with the rising demand for transparency and accountability, we have seen progress and remain optimistic.

We should never ever take our eyes off the bottom line with the end game of driving growth. While not an easy task, abandoning vanity metrics and embracing outcome-based measurement is the right thing to do, because it’s good for growth. After all, it’s the outcome that counts.


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