Author Archives: James Green

by James Green

The Truth About Big Data

In today’s increasingly data-driven world, it’s interesting that there remain a number of misconceptions and hesitations surrounding big data. The most significant misconception is that many marketers refer to big data as a thing when it is simply a trend. While some marketers are wary of it, others are excited and ready to use the insights that big data can offer.

It’s not far off to say that big data has forever changed the advertising industry. Data touches every channel – TV, social, mobile, video, display, search and so on. And as it’s produced on an ongoing basis, marketers should look to big data to help to determine what a target demographic cares about, as well as how to use data across channels.

Using Data Across Channels

Aaron Fetters, director of insights and analytics solutions at Kellogg, recently stated “The digital strategy group uses the data to figure out how social media should play a role with Kellogg’s other digital touch-points.” Fetters’ comment shows that knowing what data to use is critical. In this case, the Kellogg team seems to focus on how information derived from social media can influence other digital channels.

The ability to track everything down to an individual, product, sale and behavior is something that was not available prior to the growth of big data. However, the one thing we all must realize is that you don’t necessarily need to track everything. Today, marketers need to focus on what data matters to your own brand and business. Relying too much on data is never a good thing.

Ad Targeting Fail

For example, a Notre Dame fan recently visited the sports site ndnation.com to read up on the hard loss of the national title. Upon his visit, he was welcomed by ads for Alabama featuring, “Congrats Alabama State Champs.” As he clicked through the adchoices icon, he found that Google was behind the ad targeting.

In this case, there was too much reliance on automation and data, and therefore, the information was not mined correctly. Sure, the content of the page included Alabama and Notre Dame, and the user probably was identified as a football fan and may have even searched for information about football. But, in the end, thanks to relying solely on data and machines, the Alabama ad was targeted to a Notre Dame fan on a Notre Dame site-specific page.

The key takeaway here is that we don’t want to end up relying on data for all decisions and great ideas. The human eye and big ideas are still needed today, and sometimes, they can’t be driven by data alone.

Data For Optimization

At the end of day, the main use of the data is to help marketers to identity what is working and what isn’t worth dedicating a marketing budget to moving forward. Data help adjust, refine and optimize campaigns and complete strategies in a way that benefits both the brands and the consumers. These benefits help foster a deeper relationship between the advertiser and their audiences.

When it comes to search retargeting, big data is a major part of how retargeters reach their target consumer. From keyword lists to word optimization and creative, search retargeting uses tremendous amounts of big data to first identify a brand’s target audience and then determine where the audience is located across the Web. As a result, the best ads are served to the right audiences at the correct time.

Marketers are sitting on a gold mine of information that’s just waiting to be unearthed. The amount of data we have access to is going to grow exponentially for the foreseeable future. Use it or lose.

Originally published in Marketing Land on 1/21/2013

 

by James Green

Advertising Industry Forecast For 2013

Article Originally Published on Marketing Land

 

It’s been an explosive year for the ad industry, particularly in the online sector. From ad targeting’s important role in the presidential election, to Facebook’s recent IPO, online advertising is continuing to grow and evolve in our ever-expanding digital world.

As 2012 winds down and we head into the New Year, I have included a few predictions below as to what we might expect to see in the industry over the next year.

1. Facebook Will Allow You To Serve Ads Using Your Own Ad Server

Although Facebook began to allow other ad servers on its platform in certain circumstances in 2012, I expect that momentum will continue to build throughout 2013.

Third-party ad servers are the most basic platform for measuring performance across ad buys, and the lack of this ability is holding dollars back from Facebook. So, for the social networking giant to continue its success into 2013, Facebook will likely invite more ad servers to join its growing network.

Technically, this means that companies will be able to drop a cookie when serving a Facebook ad. Functionally, this means marketers will be able to measure reach, frequency and performance across their entire digital ad spend, including Facebook.

2. Google Will Continue To Restrict Access To Data

Google has an unprecedented amount of data about online users, which makes the company the best place for brands to advertise to their target consumers through online ads. Currently, Google has no viable competition in this space since they own the majority of the data, and I expect that this will likely remain the case in 2013.

In 2011, Google shut down open access to the “referring URL” (the search term that brought someone to your site). In 2012, Google unified its privacy policy so that whenever you are on Google, the company has the right to use your input and track you for advertising purposes.

If in the past Google has planted thousands of flowers and allowed us all to use them, in 2013 they are going to try to pull these together into a coordinated bouquet so that you are encouraged to stay connected to Google all the time. We should all expect the company to pull all of its products together in the coming year.

3. Apple Will Move To A Six-Month Product Rollout Strategy

And, in doing so will actually continue to boost company revenues and cash reserves. Expect some whining from Apple’s True Believers as the company takes more and more money from your pocketbook.

However, there is such a huge demand for Apple’s sexy devices that increasing the product rollout from one upgrade per year to two will increase the total number of units shipped for the company. So, as a few consumers whine, Apple shareholders will continue to smile as the firm maintains its position as the world’s largest company.

4. Microsoft Will Fail In Attempt To Become The “Third Mobile Platform”

Apple (iOS) and Google (Android) have incredible momentum within the mobile market and both companies continue to release upgrades with increased frequency.

While Microsoft has launched its own platform, it’s hard to imagine that it will be able to offer the same performance, reliability, breadth of offering and, most importantly, number of supported apps as Apple and Google currently offer.

5. Consumers Will Continue Trending Toward Tablets Vs. Laptops

Desktop computers have been on the decline for a while now, but are laptops next? With the explosive growth of tablets and the new iPad Mini, consumers are starting to choose tablets over laptops.

A combination of lower price point and higher portability makes them more attractive to many consumers. As a matter of fact, Forrester predicts that tablets will eventually replace laptops entirely as soon as 2016.

6. Increase In Mobile Will Continue To Erode Time Spent On Other Media

I’m an avid reader of The Economist, and once upon a time, I even read the print edition. Then, for a while, I read it online on my computer. But, when the tablet and mobile versions were released, I found that I was no longer reading the print or online versions.

Mobile has truly cannibalized all other media. In some cases, it expands the amount of time we spend online. Showrooming, the practice of looking for cheaper prices via a mobile device while in a retail store, is an example of being online at a time when we formerly were not. And, this trend is only going to continue to grow, as brands and marketers learn to take advantage of the new phenomenon.

All of these predictions relate to the online advertising space, which many predict will trump TV advertising in 2013. In 2011, TV was 42% of advertisers’ media spend, and digital was 37% — so, I look forward to seeing how this changes in 2013.

Here’s to an exciting year ahead!

by James Green

5 Ways to Push Your Company Past the Startup Phase

Any entrepreneur who has launched a company will tell you that running a startup is stressful, time-consuming and full of high risk. Before a company is truly able to transition into the growth stage of its business, it must pass through many ups and downs. But while roughly 80 percent of startups fail in the first five years, there are a number of things that entrepreneurs can do internally, to help push their company past startup and into phase two. Here are the most important things to keep in mind.

1. Start with a great idea. It might seem simple, but having a great idea—either a groundbreaking new product or an innovative service—is half the battle. If you have a great idea and are able to identify the appropriate market, then the company will grow organically and investors will line up to obtain a piece of the business. But if you find that you’re having trouble securing interest from investors, then something is simply not clicking. Either your idea isn’t as great as you thought it was, or there isn’t enough market potential for it. If this happens, it’s time to take your idea in a slightly different direction. You’ll have to keep doing this until you hit something that works, or run out of money.

2. Find the best people. The team behind the idea is essential to making the business stick. During your company’s time as a startup, the first 10 employees are often people who are specially fit for this phase: They’re well-rounded, flexible and extremely innovative. During the startup phase, you want a team of aggressive generalists who are able to pitch in and do anything necessary at the drop of a hat.

But as the company develops and expands over time, you’ll need fewer generalists and more specialists. You’ll need people who create the technology behind your product, a separate salesforce, an operations department and a management team. And all these people must be excellent within their given area because there’s no room for error.

If a startup idea isn’t compelling enough to secure funding but the team behind the idea is solid, your chance for investment increases. But keep in mind that the first employees who you hire very likely will not be the same ones that you’ll end up with 10 years later.

3. An MBA education is not necessary. At best, an education can be an indicator of ability. However, it’s important to understand that a lack of education is not an indication of the lack of ability. While hiring from top universities is an easy way to identify promising employees, there are plenty of high-caliber individuals who may not have a Harvard Business School degree.

This is especially true in entrepreneurship. Some of the most successful entrepreneurs–such as Bill Gates and Steve Jobs–did not receive degrees from undergraduate or graduate programs. And your clients will not care where you went to school; what they will care about is whether you’re smart, capable and have a great team supporting the idea.

4. Don’t get too attached. Once you have a working product and a few clients, it’s then time to scale your company. As mentioned, this may take different types of people than those you started with, as specialists will be essential to the company’s long-term success and growth. Some of your original employees will be able make this transition and some won’t. It’s a simple fact.

While it may sound counterintuitive, it’s important to remain unattached to both your company and employees. If one of the original 10 people is no longer an asset to the company, you need to sit down with him or her, talk through it and fix the issue. Sometimes the issue can be fixed and sometimes it can’t. If it can’t, it’s best to sever ties as soon as possible for the sake of the company.

Sometimes good people have to be let go because they no longer fit with the company’s mission or needs—this is something that must be accepted. A company is not a living and breathing organism that will love you back; it exists solely to make money. So if it isn’t making money, then what’s the point?

5. Always be transparent. This last point is important. A team should know the truth about what’s going on at any company and this is especially true at a startup. Your employees are (hopefully) fully invested—living and breathing your company’s mantra day in and day out. They deserve access to information from the management team and will expect an honest working environment. Since startup companies are already high-risk, employees should be provided with a constant sense of security and transparency wherever and whenever possible. And in the worst-case scenario—when there’s bad news to share—it at least will not come as a complete shock to employees.

Launching a start-up is tough, but moving past start-up and into phase two can be even tougher. If you have a great idea and the right team behind your product, there’s always potential. And if you’re also a good manager on top of having a great idea and team, then your company should be well on its way to long-term success.

 

Article originally published on AMEX Open Forum

by James Green

Breaking Down Myths about Big Data

A recent Q&A with Yahoo Ad Blog on Big Data:

Yahoo Ad Blog: What’s the biggest misconception that marketers have about Big Data?

James Green: Marketers tend to see Big Data as a thing, or a subject to be studied. Big Data isn’t a thing, it’s a trend. Data is constantly being generated about what you’ve sold, what you’ve advertised, where people go, and what they’re doing. You can track everything down to an individual in ways that you were never able to before—but that doesn’t mean that every single thing is worth tracking. A much better way to look at Big Data is to figure out what you care about, and what new data is being generated about what you care about, rather than drowning in the sea of data that’s being generated everywhere.

YAB: Is Big Data the marketer’s friend or enemy?

JG: I think it’s a friend, but only when you look at it for what you want to know. Think of that famous quote about the marketer’s dilemma: “I know 50% of my ad spend is wasted, I just don’t know which half.” Now you can know which half is wasted, because Big Data will tell you.

YAB: Many marketers seem to fear Big Data; what makes you so positive about it?

JG: Data is enlightenment, and we can all use more of it. There is some risk. You can have the “can’t see the forest for the trees” problem with Big Data, where you focus on the details and miss the significant trend. But I really believe that the more you know about something, the better you’re going to be at dealing with it.

YAB: We’ve been hearing the saying, “Data is the new creative.” How does Big Data impact creative?

JG: I’d argue that creative is one of the first things that Big Data really influenced.  We’ve been doing A/B testing on creatives for years, which is basically running a bunch of ads in a bunch of different environments to find out which creatives work better. What’s that but a data-driven approach to determining the best creative?

Big Data really helps you when you have your product or creative and you want to make it marginally better—does blue work better than green, does this copy work better than that.  But Big Data doesn’t go to that place where great design or great products come from.  Greatness comes from somebody who pops up and says, “I’ve got a brand new idea.”

For example, Big Data won’t help you come up with something like my favorite ad campaign, “The Most Interesting Man in the World” for Dos Equis, or the creative that goes with it. But you can use Big Data to refine different bits of that great campaign.

YAB: What are some benefits of Big Data that marketers might not be aware of?

JG: You can learn completely unexpected things by analyzing the data. Here’s an example that I heard from a competitor. A large agency was running lots of ads all over the place for rental car companies, trying to figure out what worked best. By diving into the data, they found out that their rental car ads worked tremendously well when placed next to the obituaries. It turns out lots of people would read the obituaries and then want to rent a car to go to the funeral.  You’d never think of that on your own, but that’s what the data revealed.

YAB: How about Magnetic in particular?  How do you use Big Data?

JG:  We do search retargeting, which means we remember what people are searching for, and target them by serving ads based on what they’ve searched for.  And we simply couldn’t exist without Big Data.

We rely on it in two key ways.  First, we generate very large lists of keywords that are based on what you might be searching for … like car, cars, auto, automobiles … and we’re constantly trying to refine those keywords by adding related words to them … like big car, fast car.  We use tremendous amounts of data to come up with those keyword sets.

Second, we run these large ad campaigns with thousands of words in them, and we’re constantly optimizing out words that aren’t working and replacing them with new words in real time. These approaches work for the vast majority of our clients, but they would be humanly impossible to do without Big Data.

YAB: So it sounds like Big Data can be better data.

JG: I think it is.  It’s a shame that so many marketers have had this fear of Big Data drummed into them. You can’t avoid big data. That’s like trying to be a Luddite and avoid all technology.  It’s just not the way the world is going.

by James Green

Marketing Morsels From James Green

What’s the first metric you check when you start work for the day?  

I really don’t have a routine to check metrics on a daily basis, but the metrics I look at most often are: sales for the day, week, month, quarter, and year-to-date.

What’s one metric you rarely bother to check? 

How much our sales people spend engaging with our clients. It’s never enough, so I know we always can do more!

If you had 10 million dollars to invest and you could invest in Google
or Facebook stock, which would you pick, and why? 

Five years ago, I moved 100% of my portfolio over to Apple. I don’t own Facebook or Google stock or indeed any stock other than Apple. However, if I had to choose between Google and Facebook, I’d choose Google. I’m not convinced that Facebook looks at the world from the advertiser’s point of view. And while Google may not have everyone’s best interest at heart, they are relentlessly pursuing effective advertising products.

What do you think will be the most important marketing platform in 10
years? 

In 10 years, much of the TV we watch now will be available online. Those shows that we watch, wherever we watch them, will be on the single largest platform, and that platform will be slowly but surely eroding TV.

What’s your favorite advertising campaign (e.g. Betty White Super
Bowl ad, Got Milk billboard, etc.)?  

Dos Equis – the most interesting man in the world. We have a developer (Vijay Parikh) who reminds me of this campaign. He flies jets, he owns a 1970s mainframe computer (as big as a fridge) in his apartment, and he’s a rock star (he owns over 50 vintage guitars).

What are the three most important qualities of a good account manager? 

Listening (& understanding), attention to detail, and great follow up.

If anything keeps me up at night worrying about my company, it’s… 

Making sure that our campaigns are hitting or exceeding our clients’ goals.

What’s the one marketing lesson you wish you had learned earlier? 

Tell it like it is. Trying to position a product in a way that isn’t 100% aligned with what it actually is (as opposed to what you’d like it to be) doesn’t work.

If you could invest in one marketing technology company, which would it be and why? 

I’m afraid that as I’m running a marketing technology company there really can only be one answer to this question: Magnetic. We’re hiring the best team to build the best product, and I’m heavily invested.

In three words or fewer: the future of SEM is…? 

Competition. Competition. Competition.

- James Green joined Magnetic in October 2011. He began his career in the entertainment industry, working for Disney and Pixar, where he worked for Steve Jobs as the VP of marketing and new business development. He has also served in leadership roles for Sabela Media, Real Media, GiantBera, PVI, and Giant Realm. From 2010 until joining Magnetic, James fulfilled his lifelong dream of traveling around the world on his sailboat with his wife and two children. He documented the trip at www.SailingOndine.com. 

 

** Content originally published on the PPC Associates Digital Marketing Blog **

by James Green

Thoughts about Digital Marketing Metrics & Attribution

It seems as though the earth under an agency’s feet is always changing, and as a result, agencies are constantly evolving and re-inventing themselves. Margins are eroding and agencies are being asked to deliver more and more for less and less. Clients ask themselves: What can I do myself and what should I outsource to the agency?

As a result, clients are asking agencies to do new things, assess campaigns differently and deliver stronger metrics. This is manifesting itself most explicitly in search, site retargeting and data-driven media campaigns. Clients are now asking to purchase the natural offspring of search and site retargeting: search retargeting. Which brings us to what clients are challenging agencies with more and more: attribution. How can you justify the media that you’re buying? What metrics are you using to measure campaigns? How do these metrics compare to the tools that we’re using internally?

There’s pressure to measure the fractional attribution that each ad creates so that clients can decide which parts of the media mix are working and which aren’t. Today, agencies are asked to create measurements across campaigns and media mixes—as well as across political divides within their client teams—to come up with a clear answer about what’s most effective.

Magnetic’s Attribution Revolution series takes a deeper dive into this topic and focuses 100% on ad measurement, attribution modeling and evaluating performance across media channels.  Find out more at www.attributionrevolution.com

 

** Some content originally published on Yahoo’s Ad Blog on 11/28/12

by James Green

2012: The Year of Ad Targeting

While 2012 isn’t entirely behind us just yet, many exciting things have happened in the digital space over the last twelve months that will have an impact on advertising in the New Year. Ad targeting has played a tremendous role in online advertising, and we have the abundance of available data to thank for this.

Let’s take a closer look at some examples of what might have added to this momentum:

Facebook Went Public

In an effort to expand its reach and drum up additional revenue, the social networking giant went public in May. And what is Facebook comprised of? That’s right, data and inventory. These two advertising commodities have become the talk of 2012.

The recent introduction of the Facebook Ad Exchange (FBX) represents a huge opportunity for advertisers to apply their own audience data to a huge selection of inventory that was previously not available. Display advertising is broadly made up of equal parts (in terms of time spent on sites) e-commerce, social and content. Therefore, being able to bid on Facebook inventory using your own data effectively adds 50% to the available biddable impressions.

Viewability

In 2012, ad buyers paid close attention to ads that were not seen by consumers. When companies are purchasing through ad exchanges, they aren’t sure of the exact ad placement. This means ads could be above the fold or below the fold, seen or not seen.

There’s talk of making viewable impressions the new metric for display. This would mean a shift from impressions served to impressions seen. It has been reported that the Interactive Advertising Bureau (IAB) will replace the current impressions served-based metric with viewability in early 2013.

It will be interesting to watch how publishers react to this change. At the end of the day, the digital industry should do what they can to increase confidence with the brands – they want to know that their ad is served on safe sites, and that it is seen by their target consumer.

Attribution

What caused someone to search for a product in the first place? Since a customer views ads multiple times before making a purchase, which ad should be credited with the eventual purchase? And, as importantly, did any of the other ads assist in the conversion?

In a digital world where every ad channel is measurable, determining what the data says about the causes of conversion is at the top of every marketer’s mind. An increasing number of both agencies and brands are now tapping search and site retargeting, along with booming ad channels across social, mobile and video.

With all of these new ways to advertise a product or service, it’s no wonder that attribution is such a hot topic.

The Presidential Election

This year, the biggest event in the U.S. has been November’s presidential election. New strategies were used to reach voters, and ad targeting was at the forefront. Both candidates were able to target voters based on a wide variety of factors including voting record and party affiliation, as well as other demographics.

The Obama administration ultimately used targeting most effectively by sharing the right message with the right voters, and leaving the Romney camp unable to capitalize on the President’s weaknesses. There has not been a president re-elected in such a weak economy with such high unemployment since FDR.

As marketers plan to finalize budgets and strategies for 2013, they should keep in mind the reasons for which ad targeting has been so successful in 2012.

There has been tremendous growth in the volume and breadth of data and quality inventory available across ad channels. As a result, ad targeting is a popular tool that is likely here to stay. I’m looking forward to watching how the digital space will continue to evolve in 2013, and how ad targeting will continue to affect the industry.

Originally Published on Marketing Land on 11/26/12

by James Green

Wall Street Journal Interview: Saying ‘No’ to Steve Jobs

Recent Interview With The Wall Street Journal:

WSJ: You started off as a cellist, majoring in music at McGill University. How did you get into the business world?

Green: I said to myself, ‘If I haven’t made it big by the time I’m 24, I’m going to quit and do something else.’ I knew tons of talented musicians who were playing in hotel lobbies and bar mitzvahs, and I did not want to do that. I wanted to be a rock star. So I went to UCLA business school at 24.

WSJ: What was your goal?

Green: I wanted to go into the music industry before business school, but the best job I could find was as an intern at RCA Canada. Then, in the first week of school, I got a summer job offer from Salomon Brothers for $1,000 a week. How amazing is that? What that taught me was marketing and positioning — that if you reposition something, suddenly someone sees so much more value.

WSJ: Describe your path after B-school.

Green: I went to New York and worked for a couple startups. None of those companies really worked. I interviewed at a bunch of large companies and joined Walt Disney. I helped build up its international film distribution, opening 20 offices across Europe and Asia in five years. It was fantastic – like being at a startup with unlimited funds.

After I opened the European offices, my boss let me open offices in Asia. I asked to run the Japan office, which was losing money. I turned an $8 million loss into an $8 million profit in the first few months just by reorganizing the office. In Japan, they don’t like breaking rules, and I sort of love breaking rules. I consolidated advertising buying and let some people go. When I finished, I asked for another job. They didn’t have one and my contract was up, so I left with nowhere to go.

WSJ: This was 1997. What did you do next?

 Green: During my time at Disney, I met and became friends with John Lasseter, founder of Pixar – and through him, ended up meeting Steve Jobs. He was looking to hire someone at Pixar to liaise with Disney. Jobs interviewed me at his house in Palo Alto.

WSJ: What was the interview like?

Green: There was a very awkward moment when he said, ‘You know, James, I really love these new things called DVDs and I want to show you how amazing Pixar movies look on them.’ So he took me into his bedroom to show me, and I was thinking, ‘Okay, now I’m in Steve Jobs’ bedroom watching a DVD with him. Awkward.’

WSJ: Did you get the job?

Green: He offered me a job then and there, and I said ‘No.’ Pixar had a distribution deal with Disney, and he wanted someone to manage their relationship. I felt it was a no-win job. So he offered me another job, doing new business development and marketing for Pixar. But after I started, he slowly but surely moved me back to the liaison position, and I started messing up. I was there for three or four months. I resigned before Steve could fire me, basically.

 WSJ: So then you got into the turnaround business?

Green: By then, the internet was taking off. I started an online ad server with some Australians I met through my girlfriend. We launched Sabela Media, a competitor to DoubleClick, in 1998, and sold it in 2000 for $75 million. The investors were happy with the results and hired me to turn around three companies after that.

Turnarounds are some of the hardest things you ever have to do. In each, I had to lay off people and reposition the company. All of them were sold. I ended up doing this for 10 years, and I got really burned out. So I went sailing for a year [from 2010 to 2011].

WSJ: How do you lay off workers?

Green: The easiest is when it’s got nothing to do with them. Say, ‘You’re fantastic, but here’s how the company is doing, and we’ll have to let some people go.’ Ask how they want to handle it: Do they want to say they resigned? Do they want to keep their email address for awhile so they can look for a job? It’s tougher when they’re no good. I avoid talking about their lack of performance, and try to focus on the future while being as gentle as humanly possible.

WSJ: But you don’t think staffing turnover is always a bad thing. Why?

Green:  You need different kinds of people at different stages of a company’s growth. In the beginning, you just need a finance person who can be a bookkeeper. As you get bigger, you need someone who can manage cash flow, and as you get even bigger, someone who can raise capital. Sometimes your No. 1 becomes your No. 2 because you hire people above them.

WSJ: How do you demote someone without creating resentment?

Green: Try not to position it as a demotion. Give them a raise, tell them what a good job they’re doing. At Magnetic, I’ve hired a new chief revenue officer, VP of data and chief technology officer – and all these positions have people under them who are still with the company in No. 2 roles. Be open and honest. It’s hard to hurt people when there are no surprises.

WSJ: You’ve told employees that getting attached to a company can backfire. Why?

Green:  I tell them not to get attached, because companies have no feelings or loyalty. The only reason a company exists is to make money. When you start having some emotional connection, you make irrational decisions. What you need to focus on is what you need, and what the company can do for you.

by James Green

What Kids Can Teach us About Marketing’s Future

Here are some events from my children’s lives that illustrate the future of marketing:

  • We moved into a new place and chose not to sign up for cable. Neither my 12-year-old daughter nor my 9-year-old son seems to care. Instead, we have a big fat Internet connection, and they buy what they want from Netflix, Amazon, iTunes, and others.
  • Neither of my kids “own” music. My daughter, the family’s music aficionado, loves to use Spotify.
  • My son is more interested in watching videos about games than watching TV shows. This year, he requested a video-game birthday party.

These trends make me believe in a data-driven audience, and that distribution and consumption have fractured into niches. No matter what my kids are consuming, you want to know what they want to buy.

** Originally posted on Yahoo’s Advertising Blog on  10/18/12

by James Green

3 Reasons Why Current Attribution Models Are Falling Short (& Possible Solutions)

Attribution has recently become a heated issue as brands, agencies and digital companies work to determine which ads have the most impact – and who should receive credit for consumer purchases. With more brands shifting their advertising dollars to digital, evaluating the performance of each media channel is becoming increasingly important.

Magnetic recently hosted The Attribution Revolution NY12, which took a deep dive into the probing questions that surround media measurement in today’s digital age. The panel included industry gurus from Google and Adobe, and explored a variety of concepts, benefits, and shortcomings of the most common types of attribution models.

 

THE COMPLEXITY OF DIGITAL ATTRIBUTION

Given that an advertiser knows if you see their ad, click on it, visit their site, and buy their product, you’d think that measuring the effectiveness would be a snap — just take the amount spent on each media channel and divide it by the number of units sold.

However, companies are spreading their online advertising dollars across various channels like wildfire. This includes leveraging strategies such as:

  • Search engine marketing
  • Site retargeting
  • Contextual targeting
  • Sponsorships on premium sites

Given that people see ads from multiple campaigns before they make a purchase, it’s much more complicated to figure out which one(s) should receive credit for the purchase.

Below are explanations as to why the current attribution models are falling short:

 

1. POST-CLICK OR LAST-CLICK ATTRIBUTION

The most common attribution model, post-click attribution, assigns 100 percent of the conversion credit to the last advertisement that a consumer clicked on. This seems logical – why should others get credit if they weren’t able to generate a sale after the click? However, this method doesn’t account for any previous advertisements that may have influenced the consumer during their consideration phase, and it completely discounts the value of any branding effects.

 

To illustrate why, consider the following offline analogy:

A consumer watches a TV ad about a promotion at Best Buy and then visits the Best Buy store. In the store, they are handed a flyer about the discount. The consumer goes to the cashier with the discount flyer and then makes a purchase. If the retailer were using last touch attribution, then the conversion is attributed 100% to the flyer — not the TV ad that actually brought the consumer to the store in the first place.

 

2. POST-VIEW ATTRIBUTION

 According to the post-view model, when a consumer makes a purchase, the last media channel to display an ad to that consumer receives credit for the conversion. The risk associated with this model is that not every ad displayed is actually seen.

Take for example the ads shown on AOL Instant Messenger (AIM). Typically, AIM is open on a consumer’s computer screen, so ads are constantly being shown whether or not you’re actually looking at the AIM screen. Even when the consumer is on a retail site making a purchase, AIM can be showing the ad and thereby getting credit for the conversion.

 

3. EQUAL ATTRIBUTION

A step in the right direction is equal attribution. This is a form of post-click and post-view attribution where equal value is assigned to every single ad placement viewed by the consumer before their conversion. However, this model assumes that all ads are created equal in their influence, which may not be the case.

 

THE ANSWER?

So, what’s the answer?

Science. Attribution is not an art or a guessing game. It’s complicated, it’s a big data problem, and there are companies that specialize in this such as Adometry and C3 Metrics. Attribution companies like these use methods like Fractional Attribution, which is considered the most accurate solution available. It gets marketers as close to full funnel attribution as possible. Vendors offering fractional attribution assign a value to various consumer touch-points, enabling marketers to understand the full consumer experience from start to finish. This method helps brands identify media duplication and determine which media partners add value to the campaign.

The demand for digital advertising effectiveness will not die down anytime soon. Pressure will continue to rise from two sides. First, major companies/advertisers such as Coke and P&G will push for new attribution models as they shift more dollars to digital. Second, ad technology companies and publishers will advocate for more accurate attribution, as they don’t want to miss out the credit they might deserve.

It’s time to embrace the attribution revolution.

To watch the full panel video from the Attribution Revolution NY12, click here.

 

Originally posted on the iStrategy Blog on 10/3/12

Plugin by Social Author Bio