The ad industry is undergoing a major period of transformation. Despite all of the disruptions and challenges signal deprecation and privacy legislation has spurred, we’ve never had a better chance to innovate and reinvent the industry. Measurement is ripe for a redesign, and there are three core tenants the industry should prioritize as we look towards the future. But first and foremost, sales outcome measurement should be the linchpin on gauging the success of every single campaign.
Marketers have become accustomed to waiting for reporting and analytics on the performance of their campaigns, especially for metrics beyond ad unit engagement or impressions. If they want to optimize in real-time, programmatic traders typically rely on proxy metrics such as clicks as the best indicator of campaign performance. Post-campaign, those who had employed MMM or incrementality experiments were able to see the campaign’s effects on sales, but typically only in time to adjust their strategies for the following campaign. Consumer behavior and preferences change rapidly, so even the most sound measurement approach could be out of date by the time the next campaign launches.
The challenges of bringing real-time measurement of sales performance are numerous. Not only are we dealing with a complex ad ecosystem, there’s an equally complex retail landscape to contend with and limited ability to tie purchases to people and then to online identifiers. If it can be done, it normally requires ample time to be reported back from retailers and processed by measurement providers. With most of today’s solutions, there is a disconnect between the real-time nature of 90% of digital advertising, and the analogue, latent options marketers have for sales incrementality measurement. Modern solutions provide marketers with options to utilize sales data in-flight to optimize performance and drive efficiencies.
The bar has been set low for actionability. An advertiser might know their overall sales lift for a campaign, but nothing about what facets of the campaign drove the lift, or anything about the consumers who converted as a result of an exposure. This provides limited insight into what can be improved upon beyond media channels and potentially some aspects of the creative, majorly handicapping the utility of sales data.
Advanced methodologies like mixed media modeling (MMM) certainly has its merits. It can separate signals from noise, such as seasonality and inflation, but based on the complexity of the model and its ability to identify causality from correlation, it requires years worth of data and can be run on a quarterly basis at most. It’s not intended to be used to make adjustments on the fly, but rather high level strategic decisions on a brand’s overall media strategy.
The future of measurement allows marketers to have real-time line of sight into audiences driving incremental conversions, with intel beyond just demographic attributes, such as other purchase and brand affinities. Modern measurement allows advertisers to optimize towards these findings in-flight, instead of waiting until the next campaign to execute.
Historically, most sales measurement has only been available to large CPG brands with a national presence. Outside of well-known CPGs, there hasn’t been enough consistently available sales data from which to execute stable measurement methodologies. This put most brands at a disadvantage when it came to measuring campaigns’ true impacts on sales. Modern measurement democratizes outcomes measurement to all verticals, to brands big and small. It doesn’t rely on one-to-one partnerships with retailers to access purchase and receipt data, but a direct relationship with the actual consumer.
Modern, opt-in consumer panels enable consumers to passively share their purchase data in exchange for real value. Through bank account and retail account linking, verticals such as quick service restaurants, insurance, and telecom can now take advantage of sales measurement and incrementality. These modern consumer panels also empower marketers who lack substantial first-party data, leveling the playing field for smaller brands and newer entrants with less historical purchase data.
