The U.S. marketing pioneer John Wanamaker mused in 1902, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” This famous quip went on to become a popular cliché in modern advertising.
But with millions of dollars being spent on mining and understanding reams and reams of customer data every year, isn’t it about time we put Wanamaker’s 112-year-old quote to rest once and for all? Given the volume of information now at our fingertips, shouldn’t we be able to identify the degree to which a marketer’s ad campaign really influenced a customer’s final buying decision?
Put another way, did Becky, the mother of 18-month-old twins from Boise, Idaho, really buy that Pampers Cruiser diapers box because of the banner ad on MomsRUs.com? Or was it simply that one of her adorable infants had left her an aromatic “present” reminding her to act?
In spite of the insights we now have about our target audiences, it has, in fact, become harder than ever to get customer’s attention. Data is available to ensure that you’re reaching the right customer with the right product in the right context or environment. As an industry, we seem to have achieved that for the most part, thanks to an increasing emphasis on brand safety for advertisers and the industry-wide push to drive down waste and fraud.
But even as the evolution of data usage has led to markedly improved results, we still have not quite reached the “promised land” – finding out exactly which advertising works.
There are many attribution models in use. A popular one has been last touch attribution as the model for measuring ROI, and most everyone agrees that it’s a flawed model. When we “lose” our keys, it only stands to reason that we’ll find them in the last place we looked! By the same token, just because the user purchased a product via the last ad they clicked, doesn’t mean it was more compelling than the other channels he or she may have touched along the way: email, social, display search, etc. Google Analytics published a study in 2012, which found that on average, customers interact with a brand 4.3 times over a two-day period before they finally make a purchase.
But the traditional attribution models don’t address the most important question: Did the ad actually “cause” the user to convert? That’s what many of us on the creative, planning, ad-tech, and even on the publishing side would really like to know.
This will be the next step in the evolution of data usage in our business. We will be able to use the many layers of data that we have already today to identify what caused conversions so we can focus our efforts – and our budgets – in the right direction. We’ll be able to retrace the steps of the consumer – just as we do to locate those misplaced keys – to determine how he or she arrived at the point of purchase. We can then replicate and refine that path to achieve much greater ROI.
Efficiency in marketing and advertising is an underrated concept in some sections of our industry. But most of us can immediately understand the millions of dollars that could be saved from a more transparent and efficient marketplace when we can tell our partners which parts of their campaigns are really driving sales. It’s the promise of online marketing that could further accelerate the shift in marketing dollars from other so-called traditional platforms to digital.
Read the entire piece here.