the smart marketer’s guide to optimizing campaign roi · optimizing campaign roi a claritas...

Is your marketing investment really paying off? Here’s how to find out…

The Smart Marketer’s Guide to Optimizing Campaign ROI

A CLARITAS MARKETING INSIGHT REPORT

What kind of return am I getting on my marketing campaign? As campaigns become more complex and engage consumers across multiple channels and digital media, that question becomes increasingly difficult to answer.

But the reality is that accurately measuring your campaign across channels can help you increase the return on your marketing investment. How? By providing insights like:

Validating campaign execution – confirming that ads were delivered where and when they were planned;

Making sure an impression served was an impression seen by human eyes;

Calculating the total lift in a marketer’s Key Performance Indicators (KPI) that resulted directly from seeing the advertisement;

And finally, breaking out lift by the different components of a campaign, like target audiences, creative, or property.

Why Companies Need a New Approach to Marketing Optimization

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Analyze results and refine campaign

Multichannel campaign

delivered across multiple devices

Key performance indicators

Strategy MeasurementPerformance EvaluationOptimization Objective Success Test

In today’s multichannel world, one big aspect of accurately measuring your campaign involves multichannel attribution, which is the process of linking a consumer behavior – such as a purchase – back to a specific marketing touchpoint.

Solving the Challenges of Multichannel Attribution


Attribution Links Conversions to Exposures

Consumers interact with brands across many environments. Therefore the key to effective attribution is capturing as much of a consumer’s daily experience as possible and analyzing their engagements across a number of different exposure and conversion environments.

A good identity graph can help you accomplish this by linking your first party data to consumer identifiers like postal addresses, emails, mobile IDs, or IP addresses – so you can see exactly how a specific consumer is engaging with you across channels. This allows you to see, for example, how direct mail advertisements influenced someone to purchase an item from an advertiser’s website.

Any combination of activities across these exposure and conversion environments can play a role in a consumer’s conversion path. Understanding this purchase journey is a critical part of measuring attribution across multiple channels.

Attributionis the link

between cause (exposure) and effect

(conversion)

Desktop

Mobile

In-Store Visits

Credit Card Swipes

Desktop

Direct Mail

Mobile

Out-of-Home

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RE

SC

ON

VE

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The best way to link an in-market behavior and/or an actual purchase back to a marketing touchpoint is to create a 30-day attribution window. Attribution windows are look-back periods that begin with a consumer behavior, like buying a product, and extend backward a consistent number of days, such as 30 days. If a household is exposed to an advertisement during that period, we consider their purchase an “attributable conversion.”

The illustration below shows how these windows are anchored at the point of purchase.

The Magic of the 30-Day Attribution Window


Attribution Finds Opportunities to Influence

In the example above, a purchase was made on March 1. Looking back 30 days, this household was exposed to two advertisements: one within a mobile app and another through a search engine. These are called “working impressions,” because they have the ability to influence behavior.

Let’s look at a different scenario: a display ad that doesn’t actually fall within an attribution window. Although it may contribute to the long-term impact of an ad, you cannot assume it has a short-term influence.

An attribution window begins when a conversion takes place and extends backward: if an ad was seen within that window then the behavior is an attributed conversion

COMPANY TIMELINECAMPAIGN START

CAMPAIGN END

30-DAY ATTRIBUTION WINDOW



MobileIn-App

PaidSearch

Display

Purchase 03.01.19

Purchase 03.22.19

Purchase 05.02.19

Impressions

Conversions

Attributed Conversions

3

3

2

Looking at attribution windows allows you to clearly see both recency and relevance.

Recency ensures that we’re not attributing a conversion to an exposure that occurred a year ago. For instance, if you are exposed to an ad today and you made a purchase 12 months from now, it’s likely that the exposure today didn’t have any influence on that purchase.

Similarly, relevance ensures that we’re not attributing a conversion to an exposure that happens two weeks into the future, which obviously could not have influenced the decision to purchase. Let’s consider an everyday scenario: Say I’m in the market for some jeans. Last night I visited Levi’s website and ordered a pair of their 511s. Three days before that, I received a Levi’s catalog in the mail, which I happened to thumb through.

Attribution is the process of linking the purchase of those jeans with the fact that I looked through the catalog. It’s the process of identifying whether a marketing touchpoint (in this case, looking through the catalog) had the opportunity to influence my in-market behavior (purchasing the jeans). This process is the foundation of campaign measurement.

Campaign measurement helps answer the question: What’s working well and what isn’t? If you’re not seeing the level of response that was expected, the first thing to check is whether the campaign was executed according to the media plan. If it strays too far from its media plan, you can’t expect it to perform as planned.


The Importance of Recency vs. Relevance

To determine whether the campaign was executed correctly, you can begin with the basics. First, you look at some key delivery metrics, such as:

The number of impressions

The reach

The frequency

Next, you want to see that impressions are being served:

At the right levels across the entire campaign period

On the right inventory

To the right target audiences

This allows you to more clearly see how levels within a single channel relate to the levels for the overall campaign. This is important because some media are better than others at reaching incremental, or net new, households, while others serve as an effective reminder through cross-channel frequency.

These reports should be available in near real-time so any issues that are found can be addressed quickly, allowing you to get the campaign back on track with as little disruption as possible.

Some Common Reasons Your Campaign Might Not be Working


WHEN THE UNEXPECTED COSTS YOU MONEY

Even if the campaign aligns well with its media plan, unexpected situations – such as ad fraud and poor viewability levels – can still occur. Ad fraud in particular is a costly problem for marketers, with loss estimates ranging from $6.5 billion, according to the Association of National Advertisers, to as high as $19 billion, according to Juniper Research.

eMarketer reports that just over 50% of desktop and mobile ads actually passed basic viewability requirements.

It can be surprising to learn that a campaign wasn’t effective at driving response, and even more so when it had nothing to do with strategy (like poor messaging or the wrong target audience) but rather due to reasons like these:

• ads were served on incorrect domains

• ads were served to bots

• an ad format was incompatible with a particular channel and didn’t load properly

With this information available in near real-time, an advertiser can address invalid traffic concerns with publishers, which may not even know an issue is taking place. If there’s no clear path to resolution, advertisers may want to place their ads on other inventory. This is why it’s so important to monitor fraud and viewability as the campaign runs – so you can fix these problems as quickly as possible.

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Of course, to truly measure campaign performance, you have to analyze more than campaign delivery metrics. Consumers can experience many combinations of marketing touchpoints along their path to a conversion. And as all marketers know, some channels are effective at directly driving conversions while others work better in combination. For instance, take a look at the illustration below.


Display Ads Drove Majority of Conversions

It’s apparent from the analysis above that display ads are an important part of this campaign. Not only do these ads directly influence 45.1% of attributable conversions, they also assist in three more conversion paths accounting for an additional 37.7% of conversions. Maybe less apparent is the impact of connected TV ads. If you were to only look at last-touch attribution, you wouldn’t see much influence from this channel. Given the premium cost per thousand impressions (CPMs) for connected TV inventory, the channel may run the risk of being removed unless its contribution can be better understood. Although it doesn’t directly drive conversions, connected TV assists in two conversion paths, influencing 18.5% of attributable conversions. Maybe connected TV ads provided a strong introduction to a particular category need, and only through reminders in the form of exposures from display or email ads did consumers actually convert. Removing connected TV risks losing this introduction and, ultimately, the conversions. For example, the audience that contributed 15.6% of total attributed conversions may not normally respond to display ads. It was only because they first saw an advertisement on their connected TV that created brand awareness and consideration, which are critical steps in a consumer’s purchase journey.

Why You Need to Take Campaign Measurement Beyond Delivery

Campaign X saw success from digital search ads, which were effective as the sole marketing touchpoint and as an assisted touchpoint for other channels

PERCENT OF CONVERSIONS

45.1%

19.2%

15.6%

3.1%

6.2%

7.9%

Display

Display

Connected TV

Direct Mail

Display

Email

Conversion

Social

Display

Conversion

Social

Conversion

Conversion

Conversion

Direct Mail Conversion

4.9

5.7

3.8

1.0

4.3

1.7

4.4

3.6

2.1 1.0

Marketing Campaign TimelineImpressions Sales


A conversion path analysis summarizes what a consumer experiences before a conversion. Again, these are opportunities to influence. Marketers still need to know the impact of those experiences. Some people who are exposed to a marketing campaign will perform the behavior being measured, regardless of that exposure. In fact, that’s how target audiences are often created – based on past purchase behaviors. A high level of conversions doesn’t necessarily mean an effective campaign if those households would have converted anyway. To get an accurate measure of return on your marketing investment, you need to isolate the impact of the campaign. To do that, you need to calculate the incremental lift of that campaign.

Incremental lift is the change in consumer behavior resulting from exposure to advertising when all other influences are taken into account. A family of five will likely purchase more cereal than a single-person household. Someone who attended a ballgame will be more likely to do so again versus someone who’s never been to a game. When these factors are controlled for, the difference between those exposed to a campaign and those not exposed is the impact of that campaign.

So how do you determine which individuals were actually impacted by a campaign – and which purchased based on other factors? You start by creating two groups that exhibit the same external “factors” that might cause them to buy. One of these groups is the “exposed” group, which consists of those who have been exposed to the campaign. And the other is the “control” group, which is made up of people who look exactly like the exposed group but haven’t seen the campaign. As the campaign runs, you calculate a “lift rate,” which compares the conversion rate of the exposed group to the conversion rate of the control group. This lift rate represents the true conversion rate of the campaign – because it controls for those factors outside of the campaign that might influence buying behaviors, such as regular baseball game attendance or a previous relationship with the advertiser.

The Importance of Analyzing the Conversion Path

Incremental Impact of a Marketing CampaignCampaign Lift Reports quantify the effect of a marketing campaign by measuring the incremental

behaviors of the household exposed to it

MARKETING CAMPAIGN TIMELINEImpressionsExposed Conversions


Let’s look at an example. Say 4.4 million households were exposed to a particular campaign, and 188,000 of those exposed households converted. In this example, those 188,000 households accounted for 235,336 specific conversions, which suggests that either multiple people in a household purchased and/or a single person made multiple purchases. And the total number of sales from those conversions was $5 million.

But the reality is that some of those buyers would have purchased even without being exposed to the campaign. For instance, if a consumer has purchased from the advertiser in the last 24 months, they cannot be considered an incremental buyer because that previous relationship might have triggered the sale instead of the campaign.

So that $5 million revenue number will not give you an accurate view of how effective that campaign really was.

An incremental lift analysis can help you calculate a more accurate return on your campaign spend. After conducting an incremental lift analysis using the control group methodology described on page 8, you find that only 60,625 of the 235,336 conversions were incremental buyers – or those who purchased as a direct result of the campaign.

So, if those 60,625 incremental buyers generated over $2.5 million in sales, then that number represents the revenue generated directly by the campaign.

Why Calculating Incremental Lift Gives You a More Accurate ROI

Conversions Generated by Ad ExposureWith an average dollar spend of $41.61 per incremental conversion, Campaign X generated

over $2.5M incremental sales

HOUSEHOLDS REACHED & CONVERTED

ATTRIBUTABLECONVERSIONS

$2.5MM

34.7% lift

IN REVENUE

Expected

Exposed

INCREMENTAL CONVERSIONS

AVG $ PER INCREMENTAL CONVERSION

188,302

235,336

60,625

$41,61


In fact, knowing the exact number of incremental conversions – the conversions directly generated by exposure to advertising – allows you to accurately calculate the Return on Ad Spend (ROAS). This is a metric of efficiency that creates a standardized view of campaign performance. It tells you how many incremental conversions were generated from each dollar spent on the campaign.

ROAS can be presented as visits per dollar spent, sales per dollar spent, or engagements per dollar spent, just to name a few options. Any KPI used to gauge the performance of a campaign can be used in the ROAS calculation. For instance, in the campaign mentioned above, if the campaign cost $500,000 and it generated over $2,522,606 million in incremental sales, the ROAS would be $5.05 per $1.00 spent.

Many advertisers use ROAS as an indicator for the success of a campaign because they can compare it to past campaigns, whether it’s their own or others in the category. Knowing the number of conversions directly generated by a specific advertising campaign or channel can help marketers answer two fundamental questions:

1. What does my consumers’ path to purchase look like?

2. What influence did my marketing have on that purchase?

How to Accurately Calculate Your Return on Ad Spend

Summary of Advertising Effectiveness

Incremental Conversions

$2,522,606

Media Spend

$500,000

÷

RETURN ON AD SPEND

$5.05 per $1.00 spent


Finally, we want to answer the question: How do I improve the performance of my campaign? To improve the performance of your campaign, you can’t stop at answering the question, “How well did my campaign perform?”

You have to go a step further and answer the question, “What factors contributed to that performance, and what factors didn’t?” Truly understanding what drove performance means understanding which audiences responded better to an advertisement – which in some cases is not the audience that was targeted. It also means seeing if a creative or property or message was more effective at generating a response. It also means determining the optimal frequency levels based on when response begins to level off.

These are components that advertisers or their agencies can control in order to optimize a campaign. If one audience responds better than another, impressions can be reallocated to the more responsive group. Or, for example, based on past campaign analysis, an advertiser may decide to reduce impressions to their current prospects and focus on new prospects if more than five exposures fail to produce a response. These are insights you can use to improve a campaign’s ROI while it’s still in-flight and to develop better campaigns in the future.

A SIMPLE WAY TO BOOST YOUR RETURN ON AD SPEND

For instance, using incremental lift analysis and consumer segmentation data, you can determine which type of consumers responded better to a particular message or channel. Then you can use segmentation data once again to help you gain additional insight into this audience, which you can use to personalize the messaging and engage these consumers using the media channels that they prefer. These are key factors to improving a campaign’s.

The Missing Link in Measuring Campaign Performance

The Most Complete Profile of the Consumer Demographics

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Financial Behaviors

Attitudes

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Name

Email

Postal Address

Digital IDs

Social IDs

Mobile App IDs

IP Address

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The Claritas Identity Graph ties over 5 billion data points monthly to people’s devices and digital behavior.


The reality is that better marketing leads to both an enhanced customer experience and a superior ROI. Businesses can maximize their marketing potential by finding and engaging their best customers through:

1. Identifying which audiences have the highest likelihood of responding to a media campaign, based on in-market behaviors, household characteristics, and past preferences;

2. Delivering a campaign that reaches those audiences through the right offline and online channels;

3. Validating how well a campaign was executed relative to its media plan;

4. Measuring the true effectiveness of the overall campaign using lift analysis – including how specific aspects of the campaign like message, media channel and even media partner performed;

5. Optimizing the campaign based on that analysis of its performance; and

6. Calculating an accurate Return on Ad Spend.

Each step of this process is critical in helping you refine your marketing strategy and optimize the customer experience through the entire purchasing journey.

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Claritas gives marketers the most complete understanding of the American consumer. With over 10,000 highly predictive demographic and behavioral indicators and the most comprehensive multicultural data available today, Claritas allows you to identify better prospects, target them more precisely and improve your ROI.

Our unrivalled solutions let our clients know more about who each customer or prospect is, what they do, and what they believe in. Using 80% proprietary data, the industry-leading Claritas Identity Graph creates high-definition portraits of over 250 million people, including the devices they use and their online behavior. With over 900 million linked devices and 175 million active email addresses, you’re armed with the intelligence to reach the audience you most want – when and where they want to be reached.

Using our powerful data analytics, segmentation and modeling solutions, Claritas helps you create multichannel campaigns that reach customers and prospects more personally, more seamlessly and more productively than ever before.

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the smart marketer’s guide to optimizing campaign roi · optimizing campaign roi a claritas...

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