“Data-Driven Thinking” is a column written by members of the media community and containing fresh ideas on the digital revolution in media.
Today’s column is written by Josh McFarland, CEO of TellApart, an ecommerce data and ads platform.
Dear retargeting advertiser —
We all agree online advertising needs a more comprehensive metric than the click. But the view-through (or post-impression) conversion is not it — especially for your retargeting campaigns. In fact, if you’re being billed for view-through conversions from your current provider, you are massively overpaying for events which were going to happen anyway. You’ve likely witnessed this first hand as you’ve tried to de-duplicate vendors’ conversion reports, typically finding the sales were already attributed to another channel altogether. Or perhaps you’ve had the joy of trying to understand why these view-through volumes outweigh click conversions by 10:1 (or worse!).
Why has the view-through become the default measure of campaign efficacy? If Gian Fulgoni were to be believed, it’s because the people who click on display ads are young, stupid, poor, out of work gamblers who spend an inordinate amount of time bidding for junk on eBay; not only are clicks irrelevant, they’re detrimental to the campaign! Dubious studies aside, I believe there’s a more powerful reason the view-through reigns today: it’s easily used to defraud advertisers.
As evidence, I invite you to install Firebug for Firefox and watch its display of third-party ad network traffic throughout your day on the internet. Visit the homepage of CrateandBarrel.com and – bam! – sixteen (16!) ad network pixels are immediately loaded in your browser. Then, as you navigate publisher sites which are using ad networks, you’ll see how a single ad unit can piggyback tens of additional cookies! And that doesn’t even include Flash cookies or server-side (aka Pixel-Free) cookies owned by the likes of Acerno/Akamai, which are invisible to the user.
What’s happening here is not new. The affiliate industry, which went through a similar and painful learning curve years ago, has a term for it — cookie stuffing: the insidious practice of sprinkling affiliate code-enabled cookies on as many users across the Internet as possible… knowing some fraction of them will organically “convert” before the cookie expires, thus giving credit for events which in no way were affected by the affiliate’s campaigns. And retargeting campaign view-throughs are like cookie stuffing on steroids because the targeting focuses on users who are infinitely more likely to return naturally! Unlike the affiliate world, however, these are not smalltime arbitrageurs; this is cookie stuffing at scale, performed by big retargeting providers and major ad networks.
Now, it would be naive to assert the view-through has no place as a metric. Indeed, my own company’s rigorous A:B testing of our retargeting campaigns can prove that view-through value does exist. But this validated view-through lift is complex — massively influenced by all of your other marketing programs and general business performance, rising and falling in volume from week to week. It’s also hard to measure, requiring large (and costly) control campaigns to be simultaneously run.
And there’s the rub — there is no valid way to enter into a pay-for-view-throughs agreement with a retargeting provider. Doing so immediately mis-aligns interests and incentivizes the vendor to spam your users with cookies in an attempt to take credit for sales which were going to happen anyway.
This leaves just one conclusion: retargeting campaigns’ value should be tied to the click, specifically clicks that convert. You should demand high CTRs from your retargeting efforts and from any campaign that uses your own audience data for targeting. Sorry, Gian — the click is back — and I believe you’ll see an evolution of display advertising business models that embrace it: either via click-based CPA or via CPC.
Remember, if you find yourself having to de-dupe your vendors’ conversion reports, you’ve just uncovered the real issue:
You’re being duped.
Follow TellApart (@tellapart) and AdExchanger.com (@adexchanger) on Twitter.
