It’s becoming increasingly clear that programmatic has a problem with measurement. A bank of evidence is building to show how this thorny area is not only causing concern among marketers but even restricting their investment in digital ad spend.
The issue has not escaped P&G chief brand officer Marc Pritchard, who sent shockwaves through the industry with demands for improvement in how campaigns are measured.
He is not alone. Our own research recently found that 66 per cent of marketers named measurement as their main digital marketing challenge. Furthermore, nearly all advertisers (90 per cent) said they could justify additional investment in programmatic if they had access to better measurement.
With such a clear consensus on the flaws in this important area, it might be surprising that there’s not been greater progress in finding an appropriate fix.
For too long, agencies and brands haven’t focused on what campaigns are really trying to achieve. As such, a misplaced focus on metrics that don’t deliver business results has become a barrier to moving to a new way of working. To really maximise programmatic’s potential, there must be an understanding of why these metrics are resulting in so many millions being wasted.
Why the measurement problem persists
A shift needs to take place so that advertisers and agencies are measuring what really matters, such as the ability to boost conversions or brand affinity. Right now, however, many agencies and brands are defaulting to an industry standard – number of clicks – that often doesn’t even correlate with increased sales, let alone prove a causal relationship.
This approach echoes a time when it was difficult to prove how audiences responded to ads. It certainly doesn’t belong in today’s programmatic age, where you can track people far more accurately than ever and, depending on the platform, measure the behaviour of internet users in a variety of ways, whether or not they have seen an ad.
In addition, programmatic gives an unparalleled opportunity to improve the performance of a campaign, offering almost real-time insight into which aspects of a campaign – such as creative, targeting and seasonality – are generating the results brands want to achieve.
Meaningful metrics that reflect brand goals
Meaningful metrics are the answer. We worked with a brand aiming to increase visits to its website which measured the campaign based on the post-click cost per site visit. However, increasing website traffic was really just a proxy for the brand’s true aim: to increase sales. The second proxy (post-click visits) meant that what was being measured had become too far removed from the real goal of increasing sales.
Our analysis found that campaigns which had been optimised against KPIs did nothing to increase sales for years, and that the metrics used had been chosen simply because they ‘felt right’. There was no analysis to demonstrate how they influenced sales.
We identified that the key customer behaviour that correlated to online sales was, in fact, the time a user spent on site. As a result, we were able to recommend a ‘time on site’ target and are working to optimise strategies that drive traffic among users spending a longer time on site, rather than simple site visits.
Not all metrics created equal
The truth remains that there are some flawed metrics that stubbornly persist in the industry that are almost certainly hindering agencies help advertisers realise results that truly benefit the business. Unfortunately, the most popular metric marketers use when measuring programmatic according to our research – number of clicks – is one such example.
We found over half (56 per cent) of marketers consider number of clicks their most important metric, despite the fact that a click proves very little. Ultimately, businesses want conversions, and by focusing on clicks brands are simply incentivising their agencies to focus on cheap inventory, which is susceptible to click fraud.
They’re also at risk of targeting consumers with a propensity to click on ads accidentally. While not fraudulent, accidental clicks do nothing to boost conversions. In fact, we conducted a study that revealed that high-probability clickers were 20 per cent less likely to convert than average, which means that by excluding them brands could improve their campaign performance – all despite the fact that the industry’s main metric for judging success encourages the opposite behaviour.
There are, however, metrics and approaches that enable brands to gain real insight into whether a campaign driving is driving genuine ROI. One such example is incremental measurement.
Using non-viewable impressions to create a control group of consumers enables advertisers to compare the behaviour of users who viewed the ad over those who didn’t. This helps identify results that were genuinely driven by the campaign, rather than conversions that would have happened anyway.
Those agencies opting for the easy option of buying cheap inventory might not be keen to move to such a model as it could potentially demonstrate that their campaigns are doing little to boost conversions. At the same time, brands will need to build enough understanding within the business to encourage their organisation to move away from more familiar measurement methods.
However, as more brands start asking the right questions – seeking to uncover the genuine value of their programmatic spend – there will be an accelerated shift towards new and better approaches to programmatic measurement, turning what is now a problem into a long-term opportunity for growth.
Rachael Morris is director of optimisation and insight at Infectious Media