As marketers continue to push for better ad transparency, columnist James Collins explains why now, more than ever, you need to be able to understand the true value of your display marketing.
A recent study from the Interactive Advertising Bureau and Winterberry Group revealed that almost 60 percent of US digital marketing and media practitioners said they expect to be engaged in cross-channel measurement in 2017, compared with just 35 percent in 2015.
However, while interest in attributed measurement is growing, the same study revealed that the focus on programmatic buying for ads is slipping, with fewer marketers saying programmatic media buying will occupy their time.
Amid concerns around ad placement transparency and the accuracy of measurement of display performance, it is now more vital than ever to understand the true value of your display marketing. Attributed reporting allows you to do just that, giving an honest and accurate understanding of ROI that enables better budget decisions and optimizations.
Transparency in display marketing
The much-debated issue of transparency in display marketing falls into three broad areas:
- Transparency of ad placement. After the controversy of ads appearing against extremist content, brand safety is a key concern for advertisers.
- Transparency of ad cost. Particularly for programmatic advertising, marketers are demanding more transparency into how much their advertising is costing and where their spend is actually going.
- Transparency of measurement and performance. Reasonably, advertisers want to understand the true value of their display activity. This is only possible when taking the entire cross-channel user journey into account.
Having the right tech and expert insight that offer sufficient transparency into campaign planning, execution and performance helps brands remain confident that (a) their advertisements are being shown to the right people at the right time, and (b) they understand the value of display activity well enough to make informed and profitable business decisions.
Here, I’m going to concentrate on the performance measurement side of things, because that’s where my expertise lies. Below are some of the most important things to consider when looking to measure the value your display activity is driving.
For display, looking beyond the last click is essential
Let’s get back to basics and think about the modern consumer. Consumers behave autonomously when they’re deciding what and how to purchase. They choose what devices they use, whether they prefer to purchase online or offline, and they are exposed to a wealth of messages across different channels as marketers try to attract their attention through advertising.
Our data shows that, on average, there are 10.9 touch points per sale in the US. This means a consumer is exposed to a brand, across a whole variety of channels, nearly 11 times before deciding to purchase.
Traditional web analytics tools can’t capture everything. “Proper” attributed reporting provides an unbiased look at multiple channels to show you what you might be missing.
Importantly, those 10.9 touch points include display impressions, which aren’t always captured by other tools. Without seeing all of these touch points, and the important role display plays in a conversion farther up the funnel, you could incorrectly make the decision to pause activity due to “lack of results” — and therefore lose valuable revenue. Good decisions can only be made with good data.
For example, for our client, Hand Picked Hotels — a collection of UK luxury house hotels and spas — display campaigns were paused, as they were deemed unprofitable by previous measurement. Looking at attributed data painted a very different picture: display was actually achieving 18x attributed ROI. This information put the brand in a much stronger position to shape their strategy in a way that resonates with their customers.
Seeing channels in context is also vital. Seeing the multiple touch points in a user journey and assigning weight accordingly enables cross-channel planning and optimization — something that is absolutely vital to engage with the modern consumer.
Display advertising influences other channels
This multichannel view also provides an understanding of the impact display activity has on other channels. Our data demonstrates that running display alongside other channels improves the conversion rates of the other channels. We’re able to see that consumers are more likely to convert if they’ve been shown relevant display campaigns.
For example, one of our clients, an apparel retailer in the US, saw a 72 percent increase in conversion rate when display was involved in the consumer journey, and channels such as email, SEO and social media saw the biggest impact.
If you took display away, it’s likely the performance of the other marketing channels would suffer. Without this multichannel view of performance, this essential insight would be missed and poor spending decisions could be made.
Verification of new customers and understanding lifetime value
Retargeting and prospecting campaigns are very different by nature. The former aims to encourage people who have already engaged with a brand in one way or another to return, while the latter is about drawing entirely new customers in. As such, they need to be measured in very different ways.
For prospecting, it’s vital to understand which customers coming via the campaign are truly new to the brand. From a sample of our Rakuten Marketing prospecting campaigns run in the US during Q1 2017, we saw that 69 percent of the revenue generated came from new customers. We also saw that 86 percent of the traffic influenced by those prospecting campaigns came from new users.
Both of these metrics indicate that prospecting helps attract new visitors and customers to brands — key KPIs for such activity. Only by using a measurement platform that allows for the identification of new users can the performance of prospecting campaigns be accurately measured.
Along with new-to-file, being able to track and recognize lifetime value (LTV) to show which channels and tactics are bringing in long-term, valuable customers is also important.
For the US apparel retailer I mentioned above, we found that display activity was helping attract repeat purchasers. Our data shows that consumers influenced by display spent an extra 45 percent over the subsequent 12 months after their initial purchase. Again, without the ability to measure this lifetime value, the true worth of any display activity may be underreported.
Today more than ever, as display activity becomes more heavily scrutinized amid the transparency debates, marketers need to be able to accurately report on the value of their hard work. Using attributed reporting to demonstrate honest incremental value allows marketers to not only demonstrate ROI, but also to potentially:
- reallocate budget.
- reactivate channels and/or campaigns.
- implement cross-channel learnings.
- create a story across the channels that have the highest crossover.
Ultimately, you cannot manage display advertising without knowing how to measure it correctly.
by James Collins
source: Marketing Land