"Data-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 Joshua Koran, EVP of data and policy at Criteo.
While it’s easy for marketers to fixate on Google’s threatened “cookiepocolypse,” being too hyper-focused on engagement tactics misses the big picture.
Even with today’s cookies, marketers and media owners are struggling to effectively measure media spend and quantify its incremental impact on product sales. Most do not have a sufficient understanding of the larger issues they are about to face, given the role that addressability plays in measurement, frequency capping and real-time optimization.
But measurement is now more pertinent than ever – especially in the dystopian future of time-delayed, aggregate reporting.
In Google’s revised commitments to the UK CMA, published the day after Thanksgiving, Google explicitly includes provisions that there must be quantitative testing and measurement of its Privacy Sandbox. One example of Google’s testing can be seen in a recent blog on its proposed Attribution API.
Marketers should expect to receive less than 20% of the conversions they are able to measure today.
But before focusing on driving engagement in a cookieless world, we need to concentrate on actionable solutions to measure campaign effectiveness and drive ROAS.
Don’t settle for average
For years, sellers and buyers have used average metrics such as effective cost of reach, click-through rate or conversion rate to measure how well their business is growing. But looking at average or aggregate metrics isn’t enough. While it’s helpful to know that a campaign generates an average of one click per dollar, this metric alone does not tell us how much we need to spend before an algorithm learns what’s working and, more importantly, what’s not.
Plus, campaigns take time to overcome the cold start. A marketer may spend $1,000 on the first 1,000 clicks, while being able to generate 6,000 clicks after spending just $5,000. This results in a $0.83 CPC, which is a nearly 20% improvement in performance over time.
Thus, marketers need an accurate-enough signal at the beginning of such a campaign to effectively reallocate spend and generate this improvement. It also requires marketers to invest enough money to see true ROAS.
Overcoming transparency hurdles
Marketers also face other measurement challenges, many of which are tied to a lack of transparency. For example, we do not need to understand the complex algorithms within real-time bidding to recognize why a time delay decreases the value of the data that marketers get.
Without effective measurement, a marketer can’t determine which contextual topic is working better on a website, much less across multiple sites. The longer marketers need to wait before they understand this feedback, the more money they waste, which causes a direct hit to publisher revenues.
Another factor that impairs the value of measurement is limited control over frequency capping. Without the right levels of frequency capping, marketers will overexpose their desired audience. Consumers will become increasingly annoyed after seeing the same ad too many times.
Finally, a lack of insight into brand safety further reduces a marketer’s ability to control spend – and, ultimately, to see ROAS.
Improving ROAS beyond addressable identifiers
To improve transparency in measurement and drive ROAS, marketers and media owners should first identify what metrics are most important to their business. Pay attention to the ratio, such as CPC, as well as to the volume of ad spend required to generate success.
Additionally, be diligent about partnering with ad tech vendors that can clearly articulate how they are protecting consumer privacy.
Joining the ongoing industrywide collaboration and engaging with industry trade bodies that are focused on protecting addressable media identifiers, such as Prebid or the Partnership for Responsible Addressable Media (PRAM), is another helpful tactic.
For nearly two years, measurement and real-time optimization have taken a backseat to the “cookiepocolypse.” However, we must learn to crawl before we can walk.
It is essential that we get measurement right before we can effectively plan for the next generation of responsible addressable media.
Only a holistic solution will ensure media owners and marketers can rely on a competitive market of partners to provide people with ad-funded access to digital content and services across the open web.