What E-Commerce CMOs Say Behind Closed Doors After Two Negronis

bob-buchData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Bob Buch, SVP of social at Rakuten Marketing

I recently hosted a roundtable dinner series with more than 30 marketing leaders at some of the world’s most prominent retail and ecommerce brands.

We ate house-cured pork, drank Negronis and talked about prospecting and attribution. It was the perfect environment for people to let their guard down and get real about the challenges they face today.

I know that these challenges are not unique to the marketers who attended the event. Recognize any?


Before asking questions like, “Who here is psyched about their attribution methodology?” I learned one should always brush up on one’s Heimlich maneuver skills as folks are likely to choke on whatever they are eating.

Although attribution is a sensitive subject, I picked up on an interesting and unexpected dynamic. In many organizations, the CFO is driving the quest for the unattainable perfect attribution system, having been sold on the false promise of capturing all revenue in an unduplicated algorithmic utopia.

Marketers understand the nuances of measurement challenges and the inability of one algorithm to apply to all circumstances. Marketers, unlike their finance counterparts, have accepted the inherent messiness of measuring attribution and are willing to use any means that even resemble science to prove the efficacy of their efforts.

One methodology that is gaining traction is the use of a multiplier. The critical issue at stake in measurement is that some publishers, most notably Facebook, do not allow marketers or third-party measurement tools to track purchases that occur after a user is exposed to an ad unless the user clicks through.

Publishers have recently begun doing the occasional “checkup” where they match time-stamped order IDs in both measurement systems to identify the true last touch. Once marketers determine this, they calculate how much more revenue they should have given the publisher and apply an ongoing multiplier. For example, if internal reporting says they should have given the publisher an additional $100, rather than just $150, they might apply a multiplier of 2.5 to attribute $250 to that publisher. For Facebook specifically, marketers noted they were marking up anywhere from 30% to 300%.

The lesson for ad tech firms: Give marketers scientific ammunition to take to their finance teams to help them rationalize their marketing efforts.


Prospecting success remains elusive. It is also one of the biggest opportunities for expanding revenue by reaching a broader audience.

One major retailer said 90% of its Facebook spend is dedicated to retargeting. When asked what it was doing with the 10% allocated for prospecting, the retailer replied it was a case of “accidental prospecting” – it was trying to retarget and accidentally acquired some new customers.

One company – an alternative ecommerce model with a members-only site – took the opposite approach and did not do any retargeting, instead going all-in on prospecting. It ascribes a cost it is willing to pay to acquire a member and pays that cost back over time as that member makes enough purchases to cover the cost of acquisition. The peril with this strategy is that if assumptions about lifetime value change, the entire model collapses, and it is often too late to do anything about it.

For example, if you assume a new member will spend $100 a year, you might be willing to spend $10 for each email signup assuming one in 10 sign-ups become members who spend $100. However, if site trends change and new members only spend $50 a year, all those members acquired for $10 will be unprofitable.

Most marketers agreed that Facebook has the most advanced technology for reaching and influencing new customers. While few have found success using Facebook interests to narrowly target customers, it was widely agreed that the best practice for prospecting was to upload first-party data for customers and let Facebook build lookalike audiences using its treasure trove of data about its users.

While most marketers had found some success with this tactic, some larger spenders had a hard time achieving scale because of issues like creative fatigue and audience saturation, where they overadvertised the same offer or put too many ads in front of the same audience.

In private conversations, some marketers let slip other more advanced tactics they employ, such as using more refined seed audiences to build lookalikes that will be relevant to rapidly changing offers or promoted products.


While Google and Facebook have traditionally been positioned as the top two leaders in the advertising space, Amazon is a sly competitor that should be closely watched.

It’s expected that Amazon will expand its offering into a full-stack ad platform, and its troves of consumer data will make it a viable competitor. Marketers participating in the Seattle roundtable saw Google and Facebook as secondary concerns to Amazon. People were literally speaking in hushed tones about Amazon, as if Jeff Bezos had the restaurant bugged.

Marketers want to diversify spend away from Google, but the suggestion that Facebook could overtake Google was treated as fantastical. However, the contest for the No. 1 spot continues as Facebook and Google fight for the lion’s share of programmatic advertising dollars.

One piece of feedback was consistent for Facebook: It is not providing the same level of high-touch service that Google provides. Marketers feel like Facebook is a black box and complained that nobody picks up the phone when you need help.


Everyone agreed that having a new social network on the block to compete with Facebook would be highly advantageous and many were anxious to hear about success from others. Surprisingly, not a single person could share a success outside of Facebook.

Some had published case studies with other social networks and were still lukewarm about the results, which lacked scalability and repeatability. One had even tried a “Pokémon Go” campaign to drive traffic to a store; the results were phenomenal and drove a sharp increase in sales, though the marketer acknowledged it may not be scalable. The consensus is that Facebook remains far ahead of the pack for the advertising technology required to make direct-response advertising work at scale.

Any social platform with the intention of kicking Facebook off its pedestal must be disruptive enough to differentiate from the giant, but also learn from the qualities that propelled Facebook to the top. Snapchat may be the most qualified contender; rumors that behavioral targeting is coming down the pipeline for Snapchat are reason to anticipate its ad offerings will significantly improve.

Other networks, such as Pinterest and Twitter, are rumored to be launching their own versions of native retargeting or product listing ads to mimic Facebook dynamic product ads and Google product listing ads – the two most successful ecommerce ad solutions in the last decade.

The difficulty at hand for Snapchat, Twitter and Pinterest is that they must fight the battle on two fronts – at once battling for user mindshare with a social giant that mimics everything they do while at the same time trying to keep up with the most advanced marketing technology engine to emerge since Google AdWords.

A Glimpse At The Future

One of the most interesting takeaways was the consensus that despite all the technology available today, the best way to achieve success is to have a consistent message that is well-orchestrated and delivered consistently to every point in the purchase funnel. The hoped-for solution to a disjointed attribution system is to hit every touch point with a consistent message – rather than dabbling in each channel with separate strategies.

Perhaps this is why we are starting to see a consolidation to vendors that provide multichannel marketing solutions. The next step, and probably the biggest opportunity, is for those multichannel marketing solutions to actually integrate into a single, cohesive strategy to achieve what marketers really want: to tell a cohesive story about their brand and products to their customers wherever they are.

Follow Bob Buch (@bobbuch), Manifest Commerce (@manifestads) and AdExchanger (@adexchanger) on Twitter.

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