November 13, 2023
Media is a terrible — and very expensive — thing to waste. U.S. ad spending, excluding political advertising, is forecast to reach $322.5 billion this year, according to the media investment company, GroupM. Globally, that figure is expected to be $874.5 billion.
That’s a lot of dough. And it begs the question of just how much advertisers are getting for their money — and how much of media is wasted on campaigns that fail to deliver satisfactory returns. It’s a fundamental question marketers need to continuously ask themselves.
CMO Council research shows that marketers are increasingly measured by their capacity to efficiently turn marketing dollars into revenue growth. Recent surveys, for example, show that CMOs overwhelmingly believe revenue is the ultimate metric of their job performance.
So how can CMOs demonstrate and optimize the value of their media campaigns in driving sales and revenue? Smart use of the right data is essential. Modern attribution technology, when used effectively, is helping advertisers measure and improve media performance. In fact, companies that continuously and rigorously utilize attribution tend to significantly outperform their peers by as much as 11x.
That’s what the CMO Council found in a recent study conducted with InMarket, a leader in 360-degree marketing intelligence and real-time advertising. The study, entitled “Always-On Attribution Eliminates Up To 94% Of Media Waste”, examines the performance of 109 large campaigns that served up as many as 1.3 billion media impressions.
All of the advertisers tracked were customers of InMarket’s LCI attribution platform. But some were very active users who utilized real-time attribution to continually adjust campaign parameters, such as media channels, the audiences targeted, messaging and creative, frequency, geography, and other factors. Other brand advertisers were less active users who typically employed LCI sporadically and mostly for historical purposes.
Our key finding was that advertisers who leveraged the attribution platform continuously to adjust and fine-tune their campaigns in-light dramatically outperformed their peers. Active users achieved up to an 11x reduction in media waste compared with brands that did not. InMarket found its highest-performing brands, which utilize real-time, in-flight optimization, drove positive incremental results for 94% of their media. On the other hand, for clients in the bottom quintile of the study, brands had an opportunity to optimize more than 75% of media impressions.
The study measured the effectiveness of campaigns based on their performance in driving incremental visits and sales. InMarket and many marketers believe that measuring the impact of media on incremental sales, i.e. visits and purchases that would not have taken place without exposure to an advertising impression, is the most relevant and powerful metric by which to measure and optimize advertising performance. Measuring total purchases by shoppers exposed to advertising, versus incremental visits and purchases, does not provide an accurate view of what media is driving increased revenue and sales.
The results of the research are a clear call to action for marketers. Make robust use of attribution to optimize your campaigns in real-time and realize higher returns and reduced waste on media.
The study compared major brand advertisers in similar retail categories to demonstrate the power of always-on optimization using attribution. For example, a major national Quick Serve Restaurant (QSR) brand that is an always-on user of the LCI attribution platform wasted just 7% of media. That compares to another national QSR brand that has used LCI to measure only a few campaigns and did not use LCI to actively optimize media in real-time. InMarket analysis shows that this restaurant chain wasted 72% of impressions on campaigns that generated zero incremental restaurant visits or sales.
Similarly, the research compared two major national retail chains that are LCI customers. One is an active, always-on user of LCI and continuously leverages the platform to adjust campaigns in flight as well as to improve subsequent campaigns. The other retail chain is a sporadic user of the platform and doesn’t take advantage of the LCI dashboard to optimize campaigns. The active user drove incremental sales with 94% of its impressions, wasting just 6% across all of the campaigns it ran with LCI. The other retailer wasted 68% of impressions — a factor difference of 11 times.
The old Peter Drucker adage, “You can’t fix what you can’t measure,” applies to today’s advertising campaigns. Always-on measurement and optimization represent powerful tools for reducing media waste and increasing sales lift. However, even the best attribution and optimization platforms are only as good as the commitment of their users to employ the insights and recommendations that a modern optimization engine delivers.
Murray has more than 30 years of diversified communications and marketing experience, including more than 20 years of consulting with technology-driven businesses in Silicon Valley and around the world. Murray joined the agency in 1987, currently manages client services and is the Executive Vice President of Programs for the Business Performance Innovation (BPI) Network. He consults with clients, develops creative brand platforms and drives successful authority leadership and Intelligent Marketing Engagement (IME) campaigns. Murray has a strong background in product, service and corporate marketing for high technology, marketing solutions, Internet and professional services companies, as well as in investor relations, crisis containment, community affairs and government relations. The Wisconsin native began his career as a journalist and was City Editor for a major daily newspaper in the San Francisco Bay Area. He also served as a Vice President of Financial Communications at Wells Fargo Bank, managing communications issues around one of the largest banking acquisitions in history (Crocker Bank).
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