CMO Surprise: The Results of Advertising are Less Measurable Today Than Ever
Amir Haque
By Amir Haque, Managing Partner, DonatWald+Haque
Yes, you read that right.
Sure, we can track click-throughs and page views with precision, even clock the time someone stares at size 8 UGGs on a webpage.
While individual mediums have become more measurable, the complexity of the relationships among ad channels – even within the same channel – is such that the data can be meaningless without the context of the whole.
TV influences search, search influences retargeting, retargeting influences display… everything influences everything else. And trackability varies depending on the channel.
The good news: We can see the big picture, thanks to advanced media mix modeling. This emerging specialty gives you the high-level story – what’s making people look, visit or buy, and where can we spend our dollars to make people look, visit and buy more.
But it requires sophisticated attribution models. An entire industry of advanced analytics companies has emerged to figure this out. VisualIQ is one of my favorites, examining cookie level data to understand the true CPA of individual channels. To illustrate the complexity: Just one year of complete data for one client filled 40 Terabytes – more than most modern databases can handle off the shelf. The findings are precise and valuable, but expensive for smaller companies.
For companies that don’t have an army of statisticians at their disposal, here’s a simpler way to get started. Start with a measurement model built on common-sense business assumptions, apply new information daily, hone it over time.
Here are some pointers:
1. Build a dark model. If no advertising were running today, how many calls, website visits, or in-person visits would the company receive? From what geographic areas? How many would result in sales? Your model will be rough at first but you need a working baseline.
2. Move beyond silos. Your data will naturally lead you to give credit to the last medium the consumer touched. Start with the obvious channel relationships and model those first. The obvious big ones: TV and branded search, TV and display, display and branded search.
3. Design smart tests. Whenever you change or add something to the marketing mix, design tests that help further hone and understand the relationships between channels. Keep the tests simple, and make sure they are readable.
4. Develop your live model. With all these inputs, you’ll start to have a sense of what channels are influencing others and in what directions. Define those in your model.
5. Pressure test and refine. Now that you have a working live model – break it. Disprove it and refine it by running tests that challenge the assumed relationships. Your model is never done because it’s always changing.
Here’s a secret: Let go of perfection to get closer to it. There’s value in starting with what you have – even imprecise, fuzzy measurements – and perfecting as you go.
The end result: For all channels – yes, even offline – you’ll know with about 90 percent certainty where to spend to bring in the results. The other 10 percent is what keeps this business fun.
Amir Haque is managing partner at DonatWald+Haque, a full service advertising agency. He is internationally recognized as a leader in ROI Positive Brand advertising and analytics, generating results for eHarmony, Hotwire, 21st Century, LegalZoom, and many others.
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Nice post Amir,
Especially appreciate your point about letting go of perfection. Perhaps one issue that could have been addressed further is the challenge of getting good data, especially from some agencies who don’t even share it with their clients. Invite you to check out Covario’s econometric modeling solution for attribution analysis called the CMO Dashboard.
Rick
Great insights.
And we can’t forget that there’s an entire world of public relations activity out there — media coverage, negative publicity, special events, PR-generated thought leader endorsements, and so much more.
Plus word-of-mouth and peer group endorsements via social media (and even yes, still today, personal face-to-face interactions — formerly called chatting with friends at a bar).
And an entire set of environmental variables that we can neither predict nor control.
None of the integrated marketing disciplines has ever been able to totally isolate one or even a group of channels and say we know for sure that THIS is what led to that consumer on that day making that decision and taking that action.
So the more that we work across disciplines to create truly integrated campaigns, the more challenges we have to fully account for and measure the impact of multiple variables.
Never been a more challenging time, nor one that’s more exciting.