Read Time: 3 mins, 30 seconds
By Craig Brown, Head of Delivery at Incubeta US
We have developed 5 core business principles that will help advertisers CLIMB the auction rankings and start to acquire more, and higher value, customers, with the ultimate goal of increasing business profitability.
This blog is the fourth of a series, where we’ll deep dive into each element, moving onto Measure. To find out more about why CLIMB was created and learn about the other pieces, check out our blog series.
A 2018 ClickZ survey found that 35% of companies rated their organization’s understanding of digital attribution as below average or worse, while only 9% believed it was excellent. Measurement is still a real struggle for many advertisers, and it’s holding them back from success.
One of the core issues we have with digital marketing is that we told everyone we could track every single sale down to every single click. We focused on a pure last-click model that allowed us to win budget from unmeasurable sources, like TV and print. However, not all channels drive last-click revenue, so it’s essential that advertisers not undervalue, reduce, or pause those channels that are actually driving revenue for the business.
Ensuring you know your customer journey and the value of every interaction is a significant undertaking, but it’s vital. The aim of measurement is understanding the incremental impact that each channel has on total business revenue, and one of the best examples of grasping incrementality is branded paid search. This varies for every client, but we’ve tested this for the UK-based retailer Cotswold Outdoor.
We ran branded search for two weeks on and two weeks off, assessing the total impact on search revenue over the four-week period. We found that having brand search live added no incremental value to Cotswold’s overall search revenue (paid and organic combined). This discovery allowed us to reinvest the brand budget into other search areas, leading to a 25% increase in overall search revenue. On/Off tests, along with geographic tests and many more, can help advertisers evaluate incrementality.
One of the biggest areas that many businesses fail to account for is the effect of digital on store revenue. If you’re not measuring the impact of digital on stores, and they contribute 50% of your business revenue, you’re potentially undervaluing the performance of your channels by 50%. When a competitor includes that data in their channel measurement, they are prepared to pay twice the amount for every click or impression than you are, since each is twice as valuable to their business. This means they’re going to win more auctions.
In our work with Bathstore, we created an online-to-store tracking solution. For non-brand paid search, we saw a 226% increase in non-brand revenue being driven for the business. This gave us the ability to increase from a few non-brand keywords to thousands, spurring significantly more spend and impact through paid search.
The final part of measurement is arguably the most important, yet also the most undervalued. Advertisers need to ensure that media buyers understand how the platform algorithms that optimize campaigns are working. If you’re optimizing all of your campaigns toward revenue, you’ll lose auctions against competitors that are taking a more advanced approach.
A great example is the Facebook algorithm, which requires a lot of data to optimize effectively. We partnered with a client whose main KPI was leads, but with a very low value in trust trying to drive leads, the algorithm struggled and never left the learning phase. We switched the optimization metric for the campaigns to landing page views, which significantly increased the amount of data the algorithm had to work with. This led to more leads, which grew 231% period-over-period. Because we understood how the algorithm worked and how to measure the campaigns properly, we were able to drive the maximum impact for the channel despite the early optimization issues.
We haven’t even touched on data-driven attribution here, which is really the golden ticket of measurement. We hope this has given you insight into some of the ways measurement impacts business and how it can be approached, whether that’s overall measurement or evaluating different channels to drive additional revenue for your business.
Our blog series comes to an end tomorrow, so be sure to tune in for the final piece on Buy.