Get On Board – The Incrementality Train Is (Finally) Here

By Lewis Rothkopf, President of Martin

In the past year, we’ve witnessed ad tech companies merge, acquire, change names, evolve business models, upsize (and downsize), go public (and go private) and modify targeting and attribution strategies. Despite all the turmoil and noise, has it been enough to solve the fundamental problems that have long plagued programmatic media buying?

It’s natural for marketers to demand more certainty from their advertising, including how it helps them achieve their business goals. Assessing media’s true value requires marketers to optimize to modern metrics. Incremental impact, i.e., how many consumers felt compelled to take specific action after seeing an ad, is the most casual and effective way to measure performance.

With this type of lift data, marketers can take their findings, learn from them and optimize future advertising for better results quickly and easily. In fact, with lift measurement capabilities now available to every marketer for every size of organization, it’s almost malpractice not to use incremental impact to measure advertising performance.

Old vanity metrics – including click-through rate, effective cost per thousand impressions (eCPM) and even cost per acquisition (CPA) – tell marketers little to nothing about ad effectiveness and can even steer them in the wrong direction.

The last touch for CPA-based metrics

Marketers who use “last touch” conversion tracking generally optimize their campaigns to CPA-based or similar metrics. But what are they really learning about their advertising?

While buyers can understand the correlation between folks who saw the ad and the total number of actions that were taken, it doesn’t measure whether their advertising caused people to convert. Marketers can’t differentiate between how many of their conversions happened because they saw an ad versus inevitable conversions that would have happened anyway.

Traditional CPA-based metrics provide insight into targeting relevance but fail to adequately measure marketing effectiveness. They can even have a detrimental impact on campaign success. The metrics don’t capture the benefits of quality creative or premium inventory.

They simply reflect the propensity of a targeted audience to purchase, regardless of media exposure. As a result, campaigns often deliver positive CPA metrics that fail to translate into real-world sales.

Raise campaign effectiveness with lift measurement

Lift measurement gives marketers an easy-to-calculate formula that’s also easy to understand and replicate – unlike proprietary multi-touch algorithms that can serve as indecipherable black boxes. With the removal of third-party cookies, marketers can no longer measure every user’s behavior, so sophisticated experimental designs with a representative, consented audience sample become even more critical.

But not all forms of media lift measurement are the same. The “Ghost Bids” methodology is best. It’s not nearly as costly as other types, so marketers can afford to keep it “always on” to replace CPA-based metrics. The demand-side platform (DSP) uses deterministic identifiers to segment the target audience into “exposed” and “control” populations. Then it delivers the marketer’s ad to the exposed group.

Here’s where it gets really interesting: In some cases, when the impression opportunity was compliant with the campaign’s target, the DSP doesn’t run the marketer’s ad. Hence, they become the Ghost Bids. Since both groups are randomly selected from the same pool of users, the difference between the conversion groups reveals the impact caused by the campaign.

Every marketer should be using lift measurement and incremental impact to ensure their advertising is fully addressable, accountable, actionable and acceptable to all consumers. In 2022, marketers will be wise to shed the antiquated, inaccurate methods of campaign management for new methods built to preserve privacy and reveal real-world performance.

The lift train is here: Get on board.

 

 

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!