Every single online KPI goes away with better (offline) attribution

It goes without saying that smartphones have radically changed the marketing landscape. One of those changes is the capacity to determine whether and how digital ads are affecting foot traffic into stores. Location data collected from mobile devices also offer a range of other benefits: audience and operational insights, competitive benchmarking and more.

Yet, despite these capabilities, location data and offline attribution are still not widely utilized. I recently talked with Neil Sweeney, founder and CEO at Freckle IOT about the current state of location intelligence, offline attribution and where things are headed in the near future.

Greg Sterling: How widely adopted is offline attribution today?

Neil Sweeney: I think it is maybe 5 percent [of brands and retailers] at most. Those that are adopting offline attribution, if they are, are doing so using a standalone channel (i.e., Google) and not holistically across the board.

GS: What are some of the other current use cases you’re seeing for location data, beyond offline attribution?

NS: Audits are probably the second largest. If you are a retailer and want to know who is in your location — irrespective of media — on Monday afternoon, in a specific store, how do you measure this?

In short, you don’t. Retailers are in hand-to-hand combat right now and are in desperate need of this real-time data so they can make more intelligent decisions.

Another thing I am seeing is location data being used as a baseline in the creation of segments, which is a completely intellectually bankrupt model. Segments are the equivalent of branding, a feel-good tactic with no science behind it. They won’t succeed due to their inability to determine their overall effectiveness in driving a sale (that is what attribution does).

GS: Which marketing channels are currently most aligned with offline attribution?

NS: Digital by far the most: desktop and mobile. This makes sense, as those in this vertical are the most data- and measurement-savvy and have experience working with DMPs and third-party measurement firms, such as viewability vendors, etc.

As you get down the tunnel of traditional media, your implementation tends to fall off. Outdoor is interesting. The industry has been buying a non-real-time, self-reported number for way too long, and this is ripe for disruption.

Search is also starting to take form due to the overall spend levels going into search, but its challenge is the dominance of one firm.

Terrestrial radio and TV are the hardest, but both of these mediums are moving to an OS model where that AM signal in your car will be replaced by an app that will allow for attribution to take form. The same goes for TV.

In short: All channels are moving toward offline attribution but at different speeds. They will all end up in the same spot. When they all embrace attribution down each channel, is when it gets sexy; that is when the data science really needs to kick in. This is the part that I am excited about.

GS: How do you see real-world attribution impacting online KPIs and metrics (e.g., clicks, engagement, etc.)? Do they go away? Do they exist side-by-side?

NS: First of all, I am biased. I think every single one of them goes away. Both online and offline attribution are, in my opinion, the base level metric from which all media will be based in the future. The click is just dumb, viewability has no basis as a proxy for action, and fraud is a concept that can be solved if you got away from clicks and actually focused on attribution.

The industry is perpetuating its own issues by embracing the wrong measurement metrics while spending way too much time on silly concepts that provide no incremental value (e.g., header tag).

As a brand, you care about one thing only: selling product. That product is bought either online or in a store. The market will increasingly move towards a performance model based on attribution. If you can’t get my customer to buy a product, online or offline, then I am not paying for it.

GS: What are the current limitations of offline attribution as you see them?

NS: For sure, it is knowledge as a starting point — people are really just being exposed to it and are now having to navigate new waters. This will rectify itself over time. But what is and what is not possible is what brands are dealing with.

Matching in digital is an issue for sure. When you match cookie to ID, you will lose some fidelity and this is for sure a challenge. It is getting better but isn’t perfect. Scale is a bit of an issue as well, but this also speaks to the knowledge concept. When looking at attribution, you must understand that it is really a combination of scale + fidelity + matching.

GS: Do you see problems with focusing on a single channel (re attribution)? Does that obscure some larger “reality” of the consumer journey?

NS: Yes. It is not fair to say it is a “problem,” rather I would say it is a starting point. It is not fair to suggest that measuring just mobile impressions represents a proxy for attribution, especially when this only represents <10 percent of your total impressions; but it is definitely better than zero percent.

I encourage brands and agencies to start in whatever channel is the easiest and then integrate horizontally. Every additional input and channel you add makes your model better. In time you will eventually get all inputs and all channels.

Congratulations, you now are in multi-touch and this is 100 percent where the entire industry is going. The agencies and brands that embrace this will be so far ahead of everyone else, it will be ridiculous.

GS: Do you foresee a time when offline attribution simply becomes part of a larger multi-touch attribution scenario? If so, what will it take to get there and over what time frame?

NS: Yes, offline attribution is a precursor and a necessary step for MTA.

It will take 16 months. In 2018, every major platform will have a “solution,” the majority of which will not be home-baked. The DMPs will move into this space, as it is a massive gap in their toolkit. It will be used as a weapon against the walled gardens, which will try to sell their own solutions.

The comparable would be viewability divided by 2 (Moore’s law). If it took viewability five years to roll out, it will take half the time for attribution. You’re are not learning a new “habit,” rather a new methodology.

GS: How do machine learning and AI play into offline attribution in the near term?

NS: If you are not doing this now, you are dead. Anyone whose business is location is the equal to someone who is saying their business is flour. Flour you can get in any grocery store; it’s a necessary ingredient to make something else. ML/AI use “flour” to make their cakes, cookies and tarts; without it you just have flour. Good luck with that.

GS: Location data in the programmatic universe is often criticized as being sloppy, fraudulent or inaccurate. Do you see that changing? What will change it?

NS: In the short term, it won’t really change. Buying location data in a DSP today is equivalent to driving a convertible down Las Vegas Boulevard with $150K in loose cash in the back seat: [throwing] away your money. What is going to change is a move away from the banner, not the move to better location. It’s way too hard.

The way apps surface location is so different by app, it would be impossible to police perfectly. This isn’t to suggest it is fraud (some is, but not all of it) but programmatic has bigger issues around outright fraud and domain spoofing; better location is way down the list of things to fix.

GS: What do you see as the future for beacons and other in-store positioning and location technologies?

NS: I think I was doing beacons really before anyone else (hence the SDK at Freckle). There is some value there, but there are also some limitations — namely the reliance on an SDK.

The SDK is not a sustainable technology moving forward. So, as a consequence, that will have an impact on beacons. In-store positioning is tricky, as it is siloed. Retailers want to know what is going on in their stores, but they also want to know what is going on in competitors’ stores. You can’t solve that with beacons.

Where do I think it is going? Various other systems including your car, smart home devices, etc., will eventually connect to the CPU in your pocket (and your identity) to power everything around you — including what is happening in store.

Originally published: https://martechtoday.com/freckle-ceo-every-single-online-kpi-goes-away-better-offline-attribution-209443

ABOUT THE AUTHOR

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.

21st Century Branding: Is it a Hoax?

I smirk when anyone tells me that "branding" is the core of any campaign. Branding is to measurement what superstition is to science. You advertise to do one thing: move product — period. That product is sold either online or offline. Online measurement, while not perfect, is evolving. Offline, up until recently, not so much.

In 2017, advertisers spent $500-plus billion on campaigns that were intended to drive consumers in-store. After all, 85 percent of action still takes place in a location and, yet, measuring the effectiveness of campaigns and vendors in driving consumers into a store is still a black hole of unsubstantiated claims.

As a brand marketer, spending billions of dollars each year on advertising, wouldn’t you want to know if a customer did indeed go to your store as a result of those ads? And, if so, which vendor or channel was responsible?

Keeping Up

While data-driven marketing has been a major advantage for measurement, there are still areas, like offline and multitouch attribution, that haven't evolved at the pace they should given the climate of brick-and-mortar. Through these gaps we're missing the most important metric of all: the effectiveness of the ad spend.

Related story: How to Establish Consumer Confidence Throughout the Online Sales Cycle

To put this into context, a QSR restaurant, for example, spends millions of dollars a year in various channels, across various vendors with the intention of selling more hamburgers. Retailers, more clothes. An auto company, more cars. Yet, after all of this spend, how many more cars, burgers or clothes did they sell? We have no idea.

While brands will spend millions of dollars this year to create advertising paths for online consumers to become offline, most are still without the ability to determine if their campaigns are driving the consumer to these locations. In this highly competitive environment, knowing how, why and when consumers are lured into stores is no longer a luxury; it's imperative for stores to survive the brick-and-mortar evolution.

The Keys to the Kingdom

Mobile offers us the unparalleled ability to know who is where by virtue of the device in our pocket. This information allows brand marketers to target customers close to their stores and, more importantly, to influence those customers to actually go inside. The piece that's often overlooked, and the reason why mobile is the key to ALL media, is not that mobile is better at getting people into stores (open to debate), but rather that you can use mobile, in all of its variations, to measure the effectiveness of advertising within ALL of your media spend. Mobile is the only device that can tie ALL channels (including desktop, search, TV, radio and social) back to a location metric.

Survive or Thrive?

So, who will thrive in the emerging direct brand economy? While established brands are struggling with growth, make no mistake that the customized, data-enriched, consumer-centric brands are indeed thriving. In a world where not a day goes by without an article discussing fraud, viewability, bots, waste, etc., proving your success is essential to maintaining the confidence of everyone in the ecosystem.

As the media landscape continues to evolve, marketers must urgently make ample use of their marketing data. Aligning their organizational strategies around that data will help brands, publishers and their partners compete in a world with agile, tech-focused new market entrants and adapt their businesses to thrive in the 21st century.

Originally published: http://www.mytotalretail.com/article/21st-century-branding-is-it-a-hoax/

Neil Sweeney is the CEO of Freckle IoT, a provider of multitouch offline attribution.  

A Look Ahead: The Rise Of Data, Consolidation And Privacy

In today’s unpredictable environment, the unconscious belief that the current state’s pace of change will reflect the future state is now more inaccurate than ever.

Change is not only constant, but accelerating at a pace that is hard for most to comprehend in their day to day. Over the past five-plus years, we have seen programmatic move from a nascent, long-tail methodology to the dominant approach being used across all media.

Along the way we have wiggled, pivoted and innovated in ways that have arguably made a bigger impact on the media world than ever before. I see three trends that will significantly shape the next five years:

Mass Consolidation And Retraction

The word programmatic has dominated these pages for the past five years, and there have been enormous improvements in how the industry approaches it. We have moved from the open exchange to a more balanced approach which includes private marketplaces, programmatic direct and a futures model of automated guaranteed. At the same time, we have increased fraud detection, made great strides in viewability and leveled the playing field via the header tag.

So, what’s next? I believe it will be consolidation. Unfortunately, there are simply too many undifferentiated platforms currently in the space, and in reality, the winners have already been determined. The ad tech space has now evolved into a share game where the big will get bigger and the small will continue to get smaller – either through market contraction or consolidation. Add into the mix the acquirer’s need for efficiency and the picture isn’t pretty.

After all of the banter over the last few years about the overcomplexity of the Lumascape, this will be the year that the congestion will begin to contract exponentially – with the unfortunate consequence of a lot of industry people out of work. This will accelerate in Q1 as many in the space are expecting Q4 to save their year. It won’t, which will force a long-overdue recalibration in January. This shedding has already started but will accelerate in Q1 and continue throughout the year.

Read more at Adexchanger