With so many different marketing channels out there today, it’s difficult to identify what drives sales.
In this paper, we present a new solution to an age-old problem – how to effectively measure the long-term effects of advertising.
Some people view this as being impossible, others do it inaccurately but we’ve figured out how to get it right. Here we discuss the issues involved, dismantle existing systems and present our own solution.
Inside this paper we cover:
- Why is this important to me?
- We need a floating base
- What are the existing measurement methods and why don’t they work over long periods?
- What attempts have been made to tackle this?
- What is the solution?
To download the article, click the link on the right.
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Digital marketing channels today are divergent – search, video, social, display, email, mobile – the list goes on. Marketers have a myriad of options to choose from to reach consumers to hit KPIs. But the biggest challenge is understanding which digital media work best…and how to optimize those.
The holy grail of many brands today is establishing which digital investment gets the credit for delivering a conversion event. Where should we spend our money? What can we cut from the budget? How? When?
As more media is bought digitally, more data is produced and with that comes an ability to measure effectiveness at a granular level.
The future is increasingly connected and for some big digital advertisers, requires the right measurement solution.
Digital Attribution can provide the right measurement and optimization solution. But you need the right tools and conditions to do so and what’s more – it’s not for everyone.
We have compiled an 8 Step Guide to Digital Attribution to help navigate marketers through the subject and understand whether it’s a journey they want to embark on.
The 8 steps are:
- Significant Digital Media Spend
- A Clear Online KPI
- A Skilled Team of Data Scientists
- The Right Purpose
- The Ability to Optimize Quickly
- The Right Data Set-Up
- Unified Digital Tracking
- The Right Methodology
You can read the in depth article published in AdMap, by downloading the article on the top right hand corner of this page.
Visit our digital-attribution.com website to view the video.
Matthew Chappell, Partner at Gain Theory, attended the IAB Video Conference: Thinking Differently in London on Wednesday 16th November 2016. Here are his thoughts from the event:
Halfway through AOL’s session, Mark Milling asked the audience to put up their hands if they’d seen the new John Lewis advert. And then hold them up if they’d seen it online first. And then keep them held up if they’d seen it on TV at any point in the last week.
The only people who didn’t have their hands up to start with were probably asleep following lunch. Almost all of those who had seen it had seen it online first. Only seven people in an audience of 600 had seen it on TV at all. Seven.
Online video is no longer the future – it’s here. But how do we make the most of it? And, as the question posed by the conference title asked, how do we think differently?
First, a look back. In the early noughties, when digital was emerging, brands talked about how much money to invest in digital. Then, they talked about how much to invest in specific channels. Now, with the biggest digital channels we need to be asking how we allocate spend within them and how we create content that fits – what is the right message at the right time to the right people?
This is especially pertinent in video. In the past, brands put their TV ad online and that was that. Now the opportunities are limitless. Indeed, according to Millward Brown the average consumer spends 65mins a day watching video on mobile or tablet (vs 61mins on TV). There is vast potential attention but brands need to capture it quickly.
Two of the best sessions, from Facebook and Google DoubleClick, focused right in on this.
The Google DoubleClick session, run by Atossa Vaziri, discussed three different types of video content: meal, snack, bite. Sometimes you want a three course meal, or a three minute brand video; sometimes you want a snack. Sometimes you don’t even have time for a snack, just a bite of your friend’s cake. At different times you have different needs, and video advertising can and must reflect this. For example, on Facebook mobile, 98% of videos are watched in portrait (according to Jonathon Milne, CrO Celtra), most with the sound off. Advertising in this circumstance should probably be bite or snack sized, not a four course French dinner.
Ian Crocombe, from Facebook, also discussed three different ways of telling stories and capturing attention. He started with the old fashioned TV ad: a 30s build to a climax, with the brand displayed at the end. In the online video world this is flipped on its head, you show the brand and the punchline first, before exploring further in the next however many seconds. There is a third way, by which a brand pulses impact, humour, and emotion throughout the video, such as in the McDonalds example from Brazil, below. This is a fascinating way to grab attention and hold it for a long period, in this case 1min 45s.
Both told the same story in slightly different ways, but the takeout is the same. As demonstrated by Lucy McHenry from Twitter, Nielsen have shown that there is little correlation between video length and engagement. However, 81% of videos which drove high engagement had a hook in the first three seconds. And most good videos were optimised for sound off.
The main goal for advertising is still to capture attention and engage with consumers. There are many ways to do this, and for some brands this might not be video. The great thing about any digital media is its agility – the ability to test and learn quickly, fail fast and move on.
What we learnt today is that more brands than ever are willing to do this; to think differently on how to use video to improve their marketing effectiveness.
How can a brand maintain or increase sales during a recession? For many marketers, pricing becomes one of the focal points of a brand’s marketing strategy in a downturn: many companies will decrease base price levels in an attempt to hit ambitious volume targets set during happier times.
However in the recent recession, rising production costs have affected many consumers in the opposite way: they are being faced with increasing prices in-store even as producer’s profit margins have been squeezed. This is backed up by this week’s release of inflation figures showing a rise in the Consumer Prices Index (CPI) to 2.7% partly driven by increases in food and confectionary prices.
What, then, should a firm do to optimise their pricing strategy? Raise price or lower it? Hold steady or follow the competition? Getting the base-line pricing right can make or break a brand’s bottom line during an economic downturn as shown in research by KPMG which suggested that “business leaders estimate more effective pricing could increase their firm’s profit margins by 11% on average in current market conditions”. One of the best ways to work out what to do is to model the impact of pricing decisions on volume sales. We typically talk about this impact in terms of an “elasticity”: where the elasticity is high, responses to price changes are large; where the elasticity is low, responses to price changes are small.
In a recent white paper , we’ve explored some of the benefits of using a price elasticity approach to the marketer – including calculating what the optimal price should be and running scenarios based on how your competition might respond. We’ve also looked at the potential pit-falls and curious results that emerge from such analysis – including a recent case of a positive price-elasticity found in an econometric study.
No model can ever forecast perfectly the changes in volume associated with future price adjustments: but by understanding how past movements have affected previous sales levels (including the relative impact of changes vs. own and competitor lines) the marketer can make better plans for hitting next year’s targets and optimising future revenue.
I was watching The X Factor with my Dad the other weekend: “The adverts,” he said, “are the best thing about this show. I don’t know why we don’t Skyplus it and just watch the breaks.” Guffawed, we did, at this. Dad, you’re so funny, we chuckled, you should be on Gogglebox. Then he woke up from his traditional pre-Christmas slumber, and stopped dreaming this sorry scene.
But his dreamlike state has a point. Last week was a huge week for TV adverts. More than ever, TV programmes are just the content behind ad delivery. Don’t believe me? Then why was ITVBe invented? With more than 13m YouTube views last Christmas, the John Lewis ad was more popular than the most-watched Christmas Day programmes1.
TV advertising continues to be a “big thing”. It continues to be invested in, at growing levels. It feels like new media channels are emerging every other day but TV holds its place in most big brands’ plans. Whilst other ‘traditional’ media channels decline, TV grows. This can’t just be media buyers holding onto their old ways, can it?2
In the digital age, TV does two jobs really well: Direct Response driver or Brand Builder. It is this duality of purpose, alongside the huge reach and viewer experience available, which keeps TV in its place at the top.
Direct Response Driver
The internet has changed the type of brands who advertise on TV. For example, it is impossible to watch a sporting event without bumping into a plethora of gambling firms. Partly due to a change in regulation, but mostly because of the ability to immediately impact acquisitions, their spend has increased from £84.9m in 2008 to £141.5m in 20133.
Any brand with a strong online presence is on TV, and on it loads. Brian, from Confused.com, tells you how easy it is to compare car insurance, now, on your mobile. Trivago helps you plan your trip there and then by using their app. WaterAid shows you how easy it is to text to donate money to their cause.
With this rise in internet response being driven by TV, it becomes important for measurement to keep up and assess that link between the online and offline worlds. Any solid ROI or media mix analysis will look at the impact of all media on all parts of the business, whether this be through econometrics, agent based simulation, or A/B testing.
If potential customers continue to talk about your ad and share it on YouTube, you’ve got organic and viral growth on top of your paid activity. This isn’t particularly new. People have always talked about good advertising, but the talk is happening more quickly – Twitter is the new watercooler – and it is measurable. Our previous pieces on Social TV and Long Term effects of Advertising have covered this in a lot of detail. There is a clear link between TV activity and brand building.
Sainsbury’s Christmas advert
Whether or not you like the new Sainsbury’s TV ad, it has had a clear impact on social media, with #Sainsburys rising to the top of the trend charts within hours of being aired. What is important for measurement is to know what it is you’re trying to measure: is it tweets, Facebook likes, awareness, consideration, web visits, app downloads, or sales? Once the KPI and a solid brief are defined, measurement becomes a lot more straightforward and robust.
Robust measurement of TV, of its impact on response and on conversations, underpins it’s continued use. Measurement and analytics inform brands, media agencies, buyers, and many more, on TV’s place in any media budget (in terms of spend and timing), on how TV interacts with digital (with Search, Twitter, Facebook, YouTube, Display, Emails, etc.) and finally how all these media channels should be part of an integrated plan.
2015 will be the year video moves from marketing experiment to mainstream medium. Why? Video consumption is increasing, and the rise of mobile internet use is accelerating the trend. Mobile’s share of online video views grew two-fold in the past year to reach almost 20%1, reflecting that streaming long-form video content across multiple devices is now second nature to consumers. As a result, video is set to be the fastest growing format in display advertising over the next 5 years.
So, what can we expect in 2015?
1. More ambitious content.
Due to the relative infancy of online video advertising, brands often create content in line with traditional TV advertising content and format, including limiting spot length to 30 seconds. As video advertising matures, content will move from advertising to storytelling and creative content will become longer and more ambitious. This continues the trend seen through the rise of social media and content marketing, where brands are increasingly acting like publishers rather than advertisers in seeking to engage and inform their audiences .
2. The continued rise of celebrity YouTube creators.
Many YouTube video bloggers, or vloggers, have become household names for their huge following and influence. The UK beauty, fashion and lifestyle space already features top vloggers Zoella, Tanya Burr and Pixiewoo each with communities of between 2M and 7M YouTube subscribers regularly tuning in. Brands have already started exploring how to co-create video content with these vloggers. One example is Unilever’s All Things Hair channel or Asda’s Mum’s Eye View channel on YouTube. This area is set to grow as brands continue to experiment with it in 2015.
3. Technology as a driver of creativity.
Technology enabling user interactivity with video content is already a reality. Advertisers are able to make any element of their content clickable to surface text and other interactive content meaning that they can engage consumers for longer than the video length and drive online conversions direct from the video content. By way of example, catwalk videos for the latest Nicole Miller collection allow consumers to click on any item of clothing to bring up a panel of more information, recommendations of related items and options to add these to basket. Use of this technology will become increasingly prevalent, with brands exploring the most effective ways of using the new features as the technology develops.
4. Automated and targeted distribution of content.
Programmatic buying, the use of technology to automate media buying processes in order to drive cost efficiencies and improved targeting, will increasingly be used to place video ads. Use of programmatic for video to date has been relatively low, accounting for 16% of all video ad placements in the UK in 2013 (compared to 26% for standard display ad placements) 2. With the proportion of marketing budgets spent on video set to grow, expect brands to look to programmatic buying as a means to achieving cost efficiencies and to diversifying spend away from dominant platforms such as YouTube.
5. More rigour around measurement standards.
Reach is a metric which is entrenched across brands and their media agencies as a benchmark and measure of media success, but fierce debate will continue around how this is measured and therefore how ads are traded. Earlier this year the Media Ratings Council announced that video ads could be traded based on viewable impressions, defined as those ads that are 50% visible on a user’s screen for at least 2 seconds. Brands and media agencies are calling for higher standards and as a result platforms such as Facebook are defining their own standards which will fragment the measurement landscape and continue the debate.
The industry trends show us a number of brand opportunities around content creation and distribution, but, as we forecast the rate at which brands will increase their investment in video, one question we should be asking is how will this be funded? Will spend be diverted from TV or from online budgets? Industry surveys show that the majority of brands planning to increase their video spend in 2015 currently plan to do so using their online budgets, but this will likely shift over time as the value of the medium is proven and the lines between TV, VOD and other online video blur.
1Internet Trends 2014, Mary Meeker, KPCB – http://www.kpcb.com/internet-trends
2Digital AdSpend, Internet Advertising Bureau / PricewaterhouseCoopers –http://www.iabuk.net/research/digital-adspend
Customers are increasingly using a combination of online and offline channels as well as multiple mobile devices to research and buy products. This makes it difficult to gain a single view of the customer and his/her touch points. Consequently, advertisers and their agencies are having to work harder than ever to build an accurate view of the customer journey and to measure the value of different marketing channels and activities on the path to purchase.
Like many advertisers, O2 historically used last click digital attribution to help measure and optimise online marketing spend. 18 months ago Dan Michelson, Innovation and Capability lead at O2, kicked off a project to reassess how they were using digital attribution.
Knowing your star players and strikers
Describing the challenges at London’s Festival of Marketing, Michelson explained that by relying on last click – a technique whereby the value of an online purchase is attributed to the last click or online touch point before the sale is made – they were optimising themselves out of digital marketing.
By attributing value to only the last touch points in the customer journey the business was concentrating spend with just a handful of digital platforms. Michelson was keen to understand the role of other channels and whether they played a critical role in supporting conversions. Using a football analogy he pointed out the importance of understanding the chain of events leading to the conversion – “We knew who our strikers were but who are our star players?”
To shed light on the answers to these questions Michelson introduced a more advanced digital attribution methodology – algorithmic attribution. Unlike last click or other rules-based attribution methodologies which rely on certain assumptions (for example, that 100% of the value of the purchase should be attributed to the last touch point), algorithmic attribution uses statistical models to analyse and weigh the contribution of different touch points to the purchase.
Simply put, the model looks to identify identical customer journeys and their conversion rates to understand the average value of that sequence of touch points. By looking for examples of that sequence with a minor variation and the difference in conversion rate, for example the same sequence with no display ad touch point, the model can then understand the average value of that display ad touch point. This process is repeated across a high volume of different sequences and variations in touch points to build a more robust view of the value of each channel and individual ad without the same reliance on internal assumptions as with rules-based methodologies.
The results of the first 18 months of algorithmic attribution were very different to those from the last click model and had a significant impact on business decisions:
- Brand communications showed 10x impact compared to product-focused communications (where brand was previously an area of spend being squeezed by finance due to lack of measurable impact).
- Mobile display showed 2x impact compared to mobile search.
- Cost per acquisition for display was reduced by 37pc whilst investing 78pc more.
- Conversions for affiliates and search, channels that typically show high conversation rates in last click models, reduced by 20pc.
Importantly, the reduced conversion rates for affiliates and search did not necessarily lead to lower spend:
“It’s as much an insight tool as it is an optimisation tool. Conversion rates went down but that doesn’t mean we are investing less. We still need that spend, it just means we better understand their role in the path to purchase and which media support our strikers.”
What next for O2?
There is still a way to go for brands to be able to measure and optimise the end to end customer journey. For O2, Michelson outlines their next steps with digital attribution as:
- Marketing Mix Modelling: Integrating the two methodologies to bring together offline and online measurement.
- Cross-device: Stitching together user activity cross device to gain a more complete view of the customer journey.
- CRM integration: Integrating CRM data (for example, retail and customer service data) in order to optimise across all marketing activities, including understanding when lower cost direct marketing channels are the best option.
- Activation of attribution: Automating online spend via programmatic buying, optimising the value of placements in real-time according to insight from the digital attribution model.
- Closer collaboration with key media partners: Including affiliate and social media partners.
The same challenges exist across industry, although some brands will be more advanced than others. With over half of marketers in the UK still using last click methodology, the first step for many will be to evaluate the best toolkit and underlying measurement techniques required to achieve their business objectives.
The second step will be to gain buy-in from all the relevant internal stakeholders across the business, involving them throughout the process to ensure the measurement framework will meet their needs and to align expectations.
18 months in to the project Michelson notes that selling the new concept into his business as a two-year initiative was difficult – particularly in a department where decisions are made quarter by quarter. However, he also says it was necessary in order to give enough time to test and refine the KPIs and algorithms and to involve all stakeholders at every step of the journey.