Despite the advances in programmatic advertising, measurement has lagged behind, held back by outdated approaches. We think there is a better solution: incrementality.
For too long, performance advertisers have been using a post-click attribution model that over emphasises the value of lower funnel tactics such as paid search, affiliate marketing, and retargeting.
Post-click attribution hugely undervalues the influence of activity higher up in the funnel. For instance, no one in this industry believes that the power of display advertising lies within its ability to generate clicks.
Slowly, advertisers have been breaking away from this model, attracted by the post-impression approach. Whilst this has helped to promote the importance of display advertising, it has made it easy to run poor quality campaigns that, on the surface, look extremely effective.
Bad actors in the industry have realised that by buying cheap inventory en masse, they are able to ‘cookie bomb’ users: serve an advert to as many people as possible, but at a low frequency cap. When one user converts, this bad actor can claim credit because they served an advert to them at some point. The problem with this is it requires extremely low Cost Per Mille (CPMs). And when an advertiser drops the price drastically, the quality of the inventory drops too. Advertisers end up buying adverts in the lower ranges of viewability that are more likely to be affected by ad fraud.
We know for sure that unviewed adverts do not impact users in their journey to conversion - which of course sounds like common sense. But knowing this, why would an advertiser be happy to waste budget on such a practice?
So if post-click and post-impression attribution models are fraught with problems, what is the solution?
The answer is hinted at in the previous paragraph: viewability. By taking a post-visible attribution model, advertisers can encourage their media buyer to only buy high quality, viewable inventory that is most likely to influence their audience.
But even this isn’t quite as it seems.
A number of advertisers and media buyers are taking the position of only buying inventory that is upwards of 80% viewable. The problem with this is that this inventory is disproportionately expensive and means that CPM and Cost Per Acquisition (CPA) targets become too difficult to hit. Additionally, focusing your whole programmatic strategy on buying high viewability will encourage your buyers to bid on fraudulent inventory and bot traffic which can be programmed to appear highly viewable.
Instead of chasing high viewability as a way to define performance, viewability should always be linked to the actual end goal: conversions. Then, what you are concerned with is your viewable CPA and your viewable ROI.
Getting to this stage is an extremely commendable position for an advertiser. But it is not the perfect solution to the attribution conundrum.
This is because each of these attribution models still provide credit for those conversions for which an advertising campaign was not necessary.
There is, of course, a baseline of users who would become a customer whether or not they saw your advert. For those customers that hadn’t seen an advert, it wouldn’t be accurate for the campaign to claim credit for those conversions.
For the ones that had seen an advert, some of them may have been looking to buy from you anyway, which suggests that the campaign shouldn’t claim credit for that either. And why spend money on those users that would have converted anyway?
An advertiser’s goal should be to create new customers that have been directly affected by an advertising campaign. One that has led to incremental sales, over and above the general baseline.
Once an advertiser has a good idea of the amount of incremental conversions they are earning, they can prove the value of their digital advertising - the holy grail for the digital marketer. And once this has been figured out, advertisers can optimise towards it like any other campaign metric.
Incrementality does more than reveal the true impact of an advertising campaign. It also helps to drive profitability. Instead of wasting money on users who would convert anyway, it focuses budget on new customers who need some persuasion - directly impacting the business’s bottom line.
It is even possible to incorporate cross-device and cross-channel incrementality on a fractional basis into your attribution model, although there are major barriers in doing this.
Working towards incrementality is a challenge however. It requires data at a level of detail that can overwhelm many. It also requires rarely found analytical technology and skills. In fact, there is only one other company in the industry that provides such an attribution model for their clients.
But for the digital marketer in this ever-more accountable industry, incrementality has to be worth the challenge.
