If you want to drive new customers from your programmatic buys, fix your measurement

  • by Steve Ustaris
  • May 09, 2014

In a recent survey OwnerIQ conducted of media buyers, 70% of respondents said that they believe that many programmatic buying solutions claim that they are targeting unique audiences when in reality all they are really doing is re-targeting (i.e. – hitting consumers who have previously and recently visited the advertiser’s website). In other words, programmatic media buyers think they’re getting the “ol’ bait and switch” pulled on them.

Consider this: 99% of visitors to a website will not buy on the first visit

At the heart of their response is an underlying concern among media buyers that their programmatic campaigns are not effectively prospecting, or driving new customers. This is capping their conversions, increasing their incremental “per acquisition” costs, shrinking ROIs, etc.

But this perceived challenge is a symptom of the real problem: the current attribution model used by most advertisers is screwed up. It actually discourages prospecting and gives vendors little choice BUT to re-target.

Consider this: 99% of visitors to a website will not buy on the first visit, 25% never return, 75% buy on subsequent visits
(source: SeeWhy 2013 “The Art of Shopping Cart Abandonment).

Now consider this: the majority of advertisers today still use a measurement model that gives 100% conversion credit to last click, or last impression. In fact, in these cases the advertiser has “0” view into any prior clicks or impressions that occur prior to the last.

So, if you are using this type of antiquated measurement model (which is the standard attribution default in most 3rd party adservers) what line item do you think will perform?

  • Pure prospecting line item; i.e. targeting consumers that have never been to your website
  • Re-targeting: targeting consumers that have visited your website at least 1x

Hint: Re-targeting

The largest pool of potential customers are located more mid to upper purchase funnel. Unfortunately, the current last click / impression measurement standard still used by most advertisers doesn’t incentivize or effectively reward vendors that deploy top-funnel prospecting techniques.”

– Jay Habegger, OwnerIQ’s CEO and Co-Founder, in a recent press release about OwnerIQ’s prospecting solution, RANGER.

Through OwnerIQ’s own prospecting algorithm, RANGER, we see firsthand how the last click / impression standard stacks the odds against any pure prospecting effort. RANGER exclusively targets shoppers who are NOT currently seen in an advertiser’s re-targeting pool (i.e. – people who have NOT been to your site yet). In instances where an advertiser is using reporting with the default attribution set to last click / last impression, RANGER sees < 10% attribution credit for all the new prospects it converts, on average. While RANGER is still successful at hitting advertiser metrics despite this antiquated measurement model, <10% credit hardly reflects the value we are bringing to the table.

A key first step that advertisers can take to correct this model is to upgrade their attribution model. Advanced attribution is an alternative measurement standard that is widely viewed in the industry as a more effective approach to online attribution. Recent acquisitions of top vendors in the category, Adometry and Convertro, by Google and AOL respectively have recently raised the visibility of these solutions. The advanced attribution model fully exposes all advertising events (i.e.- display impressions and clicks, search clicks, etc.), that occur prior to the consumer action, and assigns value to each event based on the advertisers’ goals. This enables advertisers to see how each vendor is contributing to different parts of the sales funnel and make optimizations accordingly to maximize returns. When valuation is done properly, vendors have an incentive to execute more prospecting techniques.

Adoption of a better attribution model will force transparency into the opaque targeting model. With advertisers now armed with greater insight into each vendor’s contribution along the path the purchase, it will be much harder for solutions to hide behind clever sales pitches. Vendors will have to bring the unique data and audiences they claim to have to the table because advertisers will be able to truly audit their performance.

Categories:Posts from 2014


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