Performance Marketing And Measurement: A New Beginning Amid Ever-Evolving Privacy Restrictions

"Brand Aware” explores the data-driven digital ad ecosystem from the marketer's point of view.

Today's column is written by Sachin Puri, senior director and global head of performance marketing at StubHub.

Are unique visitors growing but not new buyers? Are display and social attribution declining? Direct traffic up, yet customer acquisition costs are rising? Wondering what’s going on?

Times couldn’t be more exciting and challenging in the age of evolving user privacy policy and restrictions. As browsers adopt more stringent control over cookies, the current measurement approach based on last-click attribution is directional at best.

Modern performance marketing is based on the ability to use anonymized user identifiers for better targeting, personalization and measurement across web domains. In lieu of such capability, marketers must evolve their approach to measurement and go-to-market. Let’s dive into some potential solutions.

Back to basics: Know your customers and leverage first-party data

First-party data, such as customers’ email addresses, is a gold mine and still-untapped opportunity that enables more deterministic and relevant marketing. For example, if propensity to buy for a certain age group is higher on weekends or after office hours, you’d likely want to bid a higher position in search and increase frequency on social during those times of the day.

Most advertising platforms, including demand-side platforms (DSPs), social and search engines, have built strong identity graphs based on email addresses or phone numbers. Marketers can easily onboard their first-party data with enriched customer segments to actively optimize the program by audiences.

For example, Facebook’s custom audiences and Google’s remarketing lists for search ads are readily available to onboard alongside first-party data in those platforms. In most cases, this would require thoughtful account restructuring to align campaigns by customer segments.

Marketers can ensure a consistent end-to-end experience by onboarding the same audience into a site personalization platform, such as Optimizely or Adobe Experience Cloud, while passing URL parameters. For example, marketers would improve the likelihood of a conversion by showing an affluent buyer segment premium courtside seats for a game in the NBA Finals in a Facebook feed and associated landing page or a best-deal promotion to a segment of last-minute deal seekers.

Customer data platforms (CDPs)

To manage first-party data optimally, many marketing technology firms offer a CDP, which, in its most simplified definition, is a data management platform with PII data.

In my opinion, the rise of CDPs couldn’t be better timed. As the cookie-based solutions face continuing limitations, CDPs promise to deliver a more practical solution for audience targeting and insights. Apart from connecting CDPs to activation and personalization platforms, they offer an advanced ability to calculate customer lifetime value (LTV) via better integration into acquisition, retention and CRM platforms. The first-party data-based segments and associated LTV, connected to machine learning-based bidding and personalization, would unlock a strong, competitive advantage for smart performance marketers.

In terms of managing the user privacy, marketers should work closely with IT, data and cybersecurity teams to ensure that the data management follows the required legal guidelines laid out by GDPR and the respective state or other legislature, such as the California Consumer Privacy Act, which goes into effect in 2020. In addition, the transparency of data usages and user preferences, including opt-in and opt-out, should be part of the core data management architecture, so that all marketing channels are proactively managing the marketing exposure based on user preferences.

People-based measurement and stack audits

Most performance marketers would agree that the measurement methodology is a lifeline to campaigns or channels. In my opinion, marketing measurement is one of the most strategic investments required to inform business growth.

For example, the choice of last-click-based measurement usually leads to more budget directed to lower-funnel channels, such as search and retargeting, but limits strategic investment into mid- and upper-funnel campaigns. In fact, most of the value of social and display channels is in views and video completion vs. audience clicking and buying through the same journey. This is even more pronounced now as browsers impose more stringent click tracking across domains, such as Apple’s ITP 2.2 in Safari.

Audits: It’s high time that marketing analytics teams perform a thorough audit of their measurement stacks, rules and approaches. For example, it’s worthwhile to understand how much of the business is driven by Apple’s Safari and how the attribution by channel is impacted since the new tracking restrictions went live this year.

If a measurement stack includes fingerprinting techniques, I’d highly recommend an in-depth review to understand how Google’s upcoming policy crackdown on the practice in its Chrome browser will impact measurement, such as attribution of organic vs. paid app installations. As more measurement providers adopt server-to-server-based solutions, it’s important for marketers to pressure-test their current approaches and insist on these resources.

Incrementality: Another important and often underinvested approach in marketing measurement is incrementality testing. Often incrementality tests are based on a cookie-splitting approach, such as matched market or stratified sampling, which will become less robust as the life of cookies shrink. An incrementality test based on first-party data, with deterministic email addresses or phone numbers, offers a more robust, scalable and cross-device solution than the cookie-based approach. It also allows for more nuanced measurement by audience segment, which is usually difficult to measure with a pure cookie-based approach. For example, by understanding the impact of different marketing channels by customer segment, marketers can vastly improve investment planning.

It’s important to note that setting up first-party data-based incrementality measurement is more time consuming than preexisting click-button solutions offered by activation platforms.

However, it’s worth the time spent to ensure a solid measurement methodology. In general, there is no silver bullet to marketing measurement, but incrementality is one tool that can provide a valuable solution to a wide range of marketers.

What’s next?

User privacy is important, and in the current environment of sensitivity around data and online privacy, the restrictions are only going to increase.

Thus, marketers should maintain an adequate focus in this area. I believe there is a need for ongoing dialogue, which requires a dedicated team chartered to manage user privacy and engage in industry solutions to better manage marketing activation and measurement.

Follow Sachin Puri (@spuri79), StubHub (@StubHub) and AdExchanger (@adexchanger) on Twitter.

 

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