Esme Robinson, VP Platform Solutions & GTM, Epsilon, explains why advertising measurement focuses too much on outcome and not enough on value.
Marketers are under more pressure than ever to prove advertising effectiveness, but focusing on what’s easiest to measure rather than on what drives business growth is a risk. We’ve seen the scales tip too much in favour of short-term metrics and observable outcomes – a click, a view, a conversion – as a proxy for value.
Just because something is observable doesn’t necessarily make it important. But when it’s all that a retailer or brand has to measure, it’s easy to see why they make decisions based on these outcomes. Rather, a reduction in shopper churn, or improving lifetime value may mean just as much to an advertiser as a simple conversion, especially if that conversion would have occurred anyway, without the need for marketing spend. But appreciating this relies on a mindset shift.
Clicks alone do not equal value
The shift centres around seeing outcomes and value as distinct. While a click is a very clear outcome, it might not actually deliver any meaningful value. On the other hand, a transaction is an outcome already indicative of impact and opens the door to further investigation of the incrementality of media investment or contribution to broader business goals.
Outcomes and value can exist in parallel, but the focus on the former tends to preclude reflection on the latter. If you only focus media spend on what seem to be the obvious performing channels or making decisions based on a limited set of performance outcomes, you’ll never fully understand the overall impact. Continuous testing and learning are necessary to have enough data points to do this kind of value assessment, and the willingness to analyse longer time periods and not only focus on the short-term impact.
How it works in practice
That’s the theory. To show it in action, let’s take the example of a high-end furniture brand we work with who wanted to acquire the right kind of new customers.
A typical acquisition campaign might look at spend, impressions, percentage of budget delivered, site visits and Cost Per Acquisition (CPA). But because they had a lot of bouncing site traffic and struggled to find the right kinds of prospects, we delved into their first-party data to interrogate the value being delivered. How many visits there were for exposed vs. non exposed, how long they spent on the site, number of pages viewed, etc. This helped the brand make more informed decisions on where to spend acquisition budgets relating to the real value they drove aligned to their business goals.
The brand was willing to look at the good and the bad and adapt accordingly.
Marketers must always be willing to challenge themselves about how to drive value in the long term. And if your value-based measures, whether that’s repeat purchases, churn rate, increased or basket size indicate your investment is not working, then it’s time to try something different. The biggest mistake is doing the same thing and expecting a different result!
Lost opportunities during peak season
Retail media has helped to push advertising closer to the point of purchase. Brands and retailers have access to rich first-party data, making outcome measurement and attribution easier than ever.
It also makes it easier to think about value at a time marketers are being asked to demonstrate not just what happened, but what would not have happened otherwise. That means a greater focus on incrementality, customer quality, profitability and growth, moving the measurement conversation beyond attribution in isolation and towards a more connected view.
Shopper behaviour is increasingly complex as they move between retailers’ sites, walled gardens and the open web, online streaming and mobile apps. Connecting that journey is a challenge. For example, we know 70% of UK retail still happens in-store, so are we truly measuring the success of retail media if we’re only looking at online attribution? Almost certainly not.
The importance of being able to show the full value of marketing operations becomes even more acute during the busiest shopping periods. We expect certain behaviours during the ‘peak season’, but this year’s share of consumer spending could prove harder for marketers to win with our research indicating that shoppers are not only cutting back but also deferring purchases and willing to switch brands in search of better value – a huge opportunity for brands looking to influence shopper journeys.
For all those potential shoppers who didn’t check out this time or don’t need your product just yet, how do you show your activity brought them closer to purchase? What can you say your results reveal about how you should reach them next time to ensure your brand is top of mind when the right time comes?
Not every outcome needs to be sale, but by putting the right foundations in place, making use of all available data, considering holistic impact across channels and how they contribute to outcomes that are business-critical – i.e. valuable – it’s possible to create a mindset shift to grow understanding of your marketing mix’s full contribution.
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GUEST COMMENT What’s really driving advertising value?
Esme Robinson
Esme Robinson, VP Platform Solutions & GTM, Epsilon, explains why advertising measurement focuses too much on outcome and not enough on value.
Marketers are under more pressure than ever to prove advertising effectiveness, but focusing on what’s easiest to measure rather than on what drives business growth is a risk. We’ve seen the scales tip too much in favour of short-term metrics and observable outcomes – a click, a view, a conversion – as a proxy for value.
Just because something is observable doesn’t necessarily make it important. But when it’s all that a retailer or brand has to measure, it’s easy to see why they make decisions based on these outcomes. Rather, a reduction in shopper churn, or improving lifetime value may mean just as much to an advertiser as a simple conversion, especially if that conversion would have occurred anyway, without the need for marketing spend. But appreciating this relies on a mindset shift.
Clicks alone do not equal value
The shift centres around seeing outcomes and value as distinct. While a click is a very clear outcome, it might not actually deliver any meaningful value. On the other hand, a transaction is an outcome already indicative of impact and opens the door to further investigation of the incrementality of media investment or contribution to broader business goals.
Outcomes and value can exist in parallel, but the focus on the former tends to preclude reflection on the latter. If you only focus media spend on what seem to be the obvious performing channels or making decisions based on a limited set of performance outcomes, you’ll never fully understand the overall impact. Continuous testing and learning are necessary to have enough data points to do this kind of value assessment, and the willingness to analyse longer time periods and not only focus on the short-term impact.
How it works in practice
That’s the theory. To show it in action, let’s take the example of a high-end furniture brand we work with who wanted to acquire the right kind of new customers.
A typical acquisition campaign might look at spend, impressions, percentage of budget delivered, site visits and Cost Per Acquisition (CPA). But because they had a lot of bouncing site traffic and struggled to find the right kinds of prospects, we delved into their first-party data to interrogate the value being delivered. How many visits there were for exposed vs. non exposed, how long they spent on the site, number of pages viewed, etc. This helped the brand make more informed decisions on where to spend acquisition budgets relating to the real value they drove aligned to their business goals.
The brand was willing to look at the good and the bad and adapt accordingly.
Marketers must always be willing to challenge themselves about how to drive value in the long term. And if your value-based measures, whether that’s repeat purchases, churn rate, increased or basket size indicate your investment is not working, then it’s time to try something different. The biggest mistake is doing the same thing and expecting a different result!
Lost opportunities during peak season
Retail media has helped to push advertising closer to the point of purchase. Brands and retailers have access to rich first-party data, making outcome measurement and attribution easier than ever.
It also makes it easier to think about value at a time marketers are being asked to demonstrate not just what happened, but what would not have happened otherwise. That means a greater focus on incrementality, customer quality, profitability and growth, moving the measurement conversation beyond attribution in isolation and towards a more connected view.
Shopper behaviour is increasingly complex as they move between retailers’ sites, walled gardens and the open web, online streaming and mobile apps. Connecting that journey is a challenge. For example, we know 70% of UK retail still happens in-store, so are we truly measuring the success of retail media if we’re only looking at online attribution? Almost certainly not.
The importance of being able to show the full value of marketing operations becomes even more acute during the busiest shopping periods. We expect certain behaviours during the ‘peak season’, but this year’s share of consumer spending could prove harder for marketers to win with our research indicating that shoppers are not only cutting back but also deferring purchases and willing to switch brands in search of better value – a huge opportunity for brands looking to influence shopper journeys.
For all those potential shoppers who didn’t check out this time or don’t need your product just yet, how do you show your activity brought them closer to purchase? What can you say your results reveal about how you should reach them next time to ensure your brand is top of mind when the right time comes?
Not every outcome needs to be sale, but by putting the right foundations in place, making use of all available data, considering holistic impact across channels and how they contribute to outcomes that are business-critical – i.e. valuable – it’s possible to create a mindset shift to grow understanding of your marketing mix’s full contribution.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
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