Technology in Advertising: Measuring Improvement

I know that half the money I spend on advertising is wasted, my only problem is that I don’t know which half”, is a quote that encapsulates two of the age old challenges in advertising: those of waste and proving effectiveness.

It’s typically attributed to a US department store owner, John Wanamaker (1838-1922), though it’s also been credited to Viscount Leverhulme, founder of Unilever, Henry Ford and JC Penney.

Regardless of the quote’s provenance, the challenges it identified remain 100 years later. Ipsos’ research this year for MediaSense1‘Media 2020: Preparing for a very different media ecosystem’, MediaSense, 2015 found that among senior advertisers “there is a consensus that marketing spend must be directed into more targeted, less wasteful activity and that consumer messages need to become more timely, relevant and dynamic”.

It is recognised that better targeted advertising requires greater adoption of new media, technology and platforms, specifically those that enable more personalised and addressable messages, such as mobile, social, programmatic and digital outdoor.

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Undoubtedly these technologies will drive the future of advertising, but using them well isn’t easy. The speed of change and variety of media and creative choices continue to increase, as do the metrics by which to measure them. Even among experts, there are few who truly understand the labyrinthine structures of the programmatic ad buying landscape, where advertising is bought and sold in real time, governed by an algorithm. The Advertising Research Foundation, meanwhile, cites 197 different digital metrics that can be used to measure success.

As advertisers rapidly adopt these new techniques and develop metrics to measure their success, it is important not to lose sight of what the role of advertising is: to reach the right people, at the right time, with the right content to cause changes in attitudes and behaviours, in both the short and long-term.

Programmatic ad buying promises to eliminate waste by reaching the right people and doing so at the time when they’re most receptive, and there are clear benefits to doing this well. Though so far in its evolution, programmatic has tended to be used to target ads at people who have shown signals of recent interest in a category and with a tendency to focus on delivering ‘timely’ messages that prompt people to buy now.

Measures of digital behaviours and responses to ads are available in real time and allow optimisation of campaigns on the fly. But as Einstein said: “Not everything that counts can be counted and not everything that can be counted counts”.

Too often, digital and programmatic campaigns focus on maximising click through rates or other short term behavioural metrics, which rarely correspond to the longer-term brand impact of ads (e.g. improving brand awareness and perceptions) and only rarely correspond to short-term sales.

So before identifying metrics, advertisers need to consider:

  • What attitudes or behaviours do you wish to influence?
  • Over what timeframe?
  • Which metrics demonstrate success?

Advertisers need to be able to understand brand impact and to optimise online ad campaigns in real time based on this, rather than click through rates or other diagnostic metrics. We can do this by carrying out micro surveys among people exposed to ads on the web to understand how each ad affects brand perceptions. In a recent campaign, we found that of two ads, the one that achieved fewer complete views achieved 150% greater uplift in brand consideration – a clear illustration of the importance of using the right metric.

In any field, the metrics we set to judge success often determine the approach to achieving it. In her book ‘Different’, Youngme Moon of the Harvard Business School said: “The minute we choose to measure something, we are essentially choosing to aspire to it.” This creates the potential for the wrong metrics to deliver ‘perverse effects’, a concept famously illustrated when the Raj tried to get rid of cobras in Indian cities by incentivising people to kill snakes for a reward. The result – people bred more of them to claim their reward. More recently, the emissions scandal in the car industry shows how nitrous oxide targets fostered cheating and higher emissions.

So while the future of advertising will be driven by technology, brands need to ensure they avoid unintended consequences by focusing on the right metrics, in both the short and long-term, to achieve the best outcomes for their brands.

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