Digital Advertising: A Wealth of Data and a Need for Sophisticated Analysis
Craig SoferJuly 31, 2015
Special thanks to Craig McAllister for contributing to this piece.
We’ve heard it time and time again: ”This is the age of big data! Everything is measurable and every dollar spent is an opportunity to become more intelligent! “And, it’s true. Advertisers are becoming increasingly keen to commit more of their budgets to digital channels where you can prove success or failure, and use lessons learned to direct future strategy. And, true to digital’s nature, the proof is in the data. According to a recent analysis by Forrester, digital ad spend in the U.S. will overtake TV spend next year. Moreover, digital spend will hit $103 billion in 2019. This is huge! Woven throughout this trend is a common theme.
“The bigger contributing factor [of digital overtaking TV] will be an influx of new money dedicated to digital because marketers are able to prove that digital works,” said Forrester analyst Shar VanBoskirk.
Great – marketers can prove that their digital spend was successful. But, is it always so black or white if a campaign succeeds or fails? Of course not. In the same Forrester analysis, VanBoskirk mentions that marketers are deliberately choosing tools that are more measurable, and tools that “they have more experience with and that have a more obvious direct-response value.” Sure, digital advertising is great for its ability to show direct response value and lower-funnel performance metrics. Connecting ad spend to consumer action is ultimately what marketers are looking to do. What about non-direct-response tactics? There must be some value in awareness strategies, however, the impact can be difficult to directly measure and attribute to these strategies.
At Xaxis, we work with a financial services client whose objective is to drive qualified consumers to their site. While some lines on the media plan were driving impressive performance results (in the form of efficient conversion rates), others weren’t generating the same level of efficiency. These seemingly under-performing lines were awareness and contextual placements. As such, you might not expect them to drive the same performance as a more targeted, conversion-focused tactic.
This becomes a crucial challenge for marketers. How do we reconcile the seemingly intrinsic value of awareness strategies with the need to show measured success across the board? On the one hand, big data appears to be our best ally, while on the other, it can be paralyzing.
Fortunately, in the case of the financial services client, as well as a host of other advertisers, data can again be the answer. Specifically, through the use of DMP analytics, Xaxis was able to shed light on an entirely new, incremental audience that was not only reached by these awareness tactics, but ultimately converted as a result of ad exposure. Sure, these lines did not drive the same level of efficiency as some of the more aggressive, performance-driven tactics. However, they did reach an unduplicated audience that drove additional consumers to the site, which is extremely valuable. In this sense, big data takes shape more as a great ally than a source of vulnerability
When harnessed properly, data can help measure the impact of nearly all digital spend. Increasingly, advertisers are placing more emphasis on the use of sophisticated attribution methodologies to make this process more feasible. The above example also highlights the need to look at different tactics with properly aligned objectives. There is value in a strategy that drives reach, awareness, and ultimately acquires new audiences, but they must be judged based on the appropriate criteria. They may not generate the best conversion rates, but they may help your campaign by driving a different outcome. And, with the right analysis, data can shed light on this previously obscured insight as well.