With third-party cookies going the dodo's way, it's time to change how you measure media performance, and put creativity first, writes Vidmob's Nick Janitis.
When it comes to evaluating marketing and sales effectiveness, there have historically been two main approaches: marketing mix modeling (MMM) and multi-touch behavior (MTA). Although these methods measure the same parameters, the main methods and objectives are very different. The MTA measures each exposure using a bottom-up approach that gives each touch point along the funnel. MMM, on the other hand, is a "top-down" approach that aims to assess the appropriate overall media mix to maximize revenue.
Multi-touch behavior relies on the ability to track every single exposure, interaction, and sale. Today, many metrics are done using third party cookies and application tracking. Therefore, cookie refunds are likely to move from the MTA monetization to the MMM. This transition is the time to re-evaluate both approaches and an important piece of the puzzle that has long been overlooked: creativity.
Different but equally blind to creativity
MTA attempts to understand the consumer conversion journey by tracking each individual's exposure across multiple channels. Website and app tracking relies on cookies and cross-tracking (at least historically). Each of these touchpoints is assigned a credit, an amount determined by the ownership model used. Depending on the framework used, some focal points may get more credit and some less, mainly depending on the exposure order.
MM primarily uses channel and publisher rating feeds to determine performance on metrics such as return on ad spend. This is done using multiple linear regression, which variables are associated with a given scale and to what extent. Unlike MTA, MMM does not rely on audience exposure tracking and tries to understand the exact consumer journey, but helps determine the right media mix.
Advertisers should invest more in MMM due to signal loss. Although MMM has the advantage of not relying on cookie data, it has challenges, that is, the model is incomplete. Historically, creativity has been an overlooked variable in models, even though it is the most important input, accounting for 70% of performance.
Instead, MMM relies heavily on media variables such as consumption, channel, target, etc. Sometimes it takes into account external factors such as seasonal, macroeconomic or climatic conditions. Lack of creative variables can attribute performance to other factors, which can lead to misleading decisions about budget allocation and media mix.
Match point variables match existing MMMs
As Google prepares to follow in Apple's footsteps and limit cross-app tracking on Android over the next few years, it may put more pressure on marketers to adopt different solutions to combat signal loss. Evaluation cookies reduce the effectiveness of excessive targeting and emphasize the importance of measuring creative impact on performance. In light of this, it may be common practice to include innovation variables in sales/ROI modeling frameworks. The challenge will be to understand the most important creative elements of the marketing model, from key messages to emotional triggers, words and images
Third-party cookies and application tracking make the MTA more difficult, but there are ways to improve the performance impact using an innovative variant called MMM.
However, it cannot handle multiple linear regressions involving many confounding variables. Instead, features with specific compliance criteria (four to five at most) are preferred and entered as covariates in the model. These variables need to be specific, easy to measure, and based on information about what works and what doesn't. In most cases, these standards may align with platform best practices, but since a lot of analysis is done on ad creative, these standards may align with brand-specific best practices. Incorporating creative variables into the results will help provide better readouts of performance without attributing performance to erroneous variables.
Consider the Unified Marketing Measurement (UMM) strategy.
Another option is to create a hybrid model. UMM is a combination of the top-down/bottom-up approach of MMM and MTA, respectively. With UMM, marketers gain more control over the channels on a creative level, to determine how best to convert consumers.
UMM lets you see high-level budget allocations across assets and channels. It is a more comprehensive approach to understanding marketing effectiveness. This opens the door for innovation analysis to understand the characteristics of innovations that lead to outcomes. These themes can be key messages, themes, goals, brand positioning, colors, etc. The ideas gained help improve creative strategies.
With a new year upon us, it's time for brands to think about changing their measurement methods. Many brands are collaborating with internal analysts, agencies, and technology partners to not only adapt to new measurement methods, but also provide potentially useful data and reports. Many technology companies can share laser level reports with brands that want to delve into more detailed models, for example. After all, it's time to open your mind. With any change in strategy, our motto is "Try and Learn". Refreshing the measurement display is no different.
Nick Janitis is the Director of Research and Product Innovation at VidMob, a creative software development company