In the digital advertising landscape, each ad impression represents a revenue opportunity for multiple investors, regardless of its quality.
This competitive landscape often forces many businesses to compete for their share of the profits. Unfortunately, many systems in this landscape are vulnerable to manipulation and often allocate ad space based on "vanity criteria" such as viewability or click-through rate.
Depending on these settings, the quality of many ad impressions can be skewed not only for open network ad tech operators, but also for walled gardens. Adalytics reports on inflated video view rates on YouTube and Facebook are good examples.
In Adobe's 2023 Digital Trends study, 73% of executives agree that prioritizing short-term goals has pushed long-term planning and strategic thinking to the background.
In addition, the study found that 76% of agency executives notice that their clients focus on vanity metrics such as clicks and likes or quarterly revenue goals as indicators of success instead of focusing on more solid metrics. such as brand presence or customer lifetime value.
In an industry increasingly focused on tangible results, Campaign explores how reliance on metrics such as likes, reach and impressions raises questions about their alignment with the expectations of leaders focused on direct impact on the company.
Why do people continue to rely on vanity products?
Vanity metrics are known for being familiar, easy to implement, scalable, consistent, cost-effective and comparable.
However, these metrics are often more focused on the surface measurement of engagement and provide superficial engagement metrics like campaign likes and shares, Sean Adams, director of global outreach at Brand Metrics, told Campaign.
“Not every campaign leads to a sale or direct action, but that doesn't mean they weren't effective. But until marketers measure these indirect effects, those successes (and failures) remain hidden,” says Adams.
(L to R) Megan Reichelt, Lauren Criss, Steve Lawrence Chan, Hannah Mirza, Sean Adams, Kevin Gaffray.
Hanna Mirza, founder and CEO of The Responsible Marketing Agency, notes that the challenge of moving from vanity metrics to more targeted KPIs has always been the added costs and trade-offs between waste and targeted solutions that can prevent marketers from achieving the same cost-effectiveness.
Mirza notes that consumer packaged goods (CPG) clients were the first to try this early on, developing solutions to improve purchasing, only to find that the cost of those solutions outweighed the benefits of easier coverage and that new measures prevailed.
"Advances in measuring attention are a new level where this trade-off can be justified," Mirza told Campaign.
While the focus is now on metrics directly tied to business impact, vanity metrics can still provide valuable insights into brand awareness, audience engagement and content effectiveness, according to Preciso's director of operations Lauren Chris.
“The key is to leverage these metrics with more tangible KPIs to get a holistic view of marketing performance,” Chris tells Campaign.
“Managers must focus on a balanced approach, aligned with the organization's goals and incorporating short-term and long-term considerations. »
How can marketers effectively allocate value across channels?
With the advent of connected TV, marketers must pay even greater attention to attribution models that recognize the individual value of each channel and its contribution to the customer journey. This is important when not all channels have a direct impact on the final transaction.
Optimizing marketing strategies requires abandoning vanity metrics like “last click” in favor of more comprehensive multi-layered attribution methods.
Steve Lawrence Chan, Philippine director of Nexxen, the holding group of Amobee and Unruly, tells Campaign that this approach involves analyzing help conversations to identify the various touchpoints that shaped the customer's decision journey. Each touchpoint is assigned a weight based on its impact on the customer's choice.
"Also, it's important to tailor your attribution approach based on channel-specific metrics," says Chan.
“For example, a CTV ad might focus on conversions per view as a measure of success. Conversely, engagement metrics such as likes, shares, and comments on social media platforms may more accurately reflect their impact.
Additionally, advertisers are increasingly using Marketing Mix Modeling (MMM) to assess the collective impact of different channels along the customer journey.
Megan Reichelt, IAS head of Southeast Asia, Hong Kong and Taiwan, tells Campaign that MMM is particularly useful for understanding the contribution of channels that don't directly lead to transactions, but still play an important role in an organization's overall performance.
Reichelt explains that MMM offers a way to quantify and understand the unique contributions of each channel, providing a more holistic view of their effectiveness.
“Since there is no one-size-fits-all approach, advertisers must tailor their attribution approach based on specific campaign objectives, customer journeys and industry standards. "You have to focus on actionable insights and not get too caught up in data for data's sake," says Reichelt.
“The key is to derive actionable insights from available data to generate meaningful results from attribution models and journey maps to guide future campaign optimization and channel allocation decisions, rather than dwelling on missing elements.
Reichelt adds that improving MMM, given the limitations of data fragmentation and privacy, requires a strategic approach that makes effective use of available data while respecting user privacy.
Encourage advertisers to regularly update their models, integrate new data sources, adapt to seasonality and market changes, and continuously refine their MMMs to ensure accuracy and effectiveness.
In addition, according to Reichelt, MMMs also help with scenario planning and inform budget allocation and strategic decision-making.
"Advertisers should test their MMM predictions through A/B testing and real-world experiments to ensure campaign optimization matches the model's recommendations," says Reichelt.
“Custom metrics like reach and impressions have limited value in MMM because they don't reflect real business impact. However, if used carefully, they can be early indicators of potential success. »
How can marketers prioritize actionable metrics over vanity metrics?
As marketing budgets come under scrutiny, there is a demand to "do more with less." Marketers want to move away from vanity metrics and focus on more specific metrics like sales, market share and store traffic that resonate with financial decision makers.
Chan explains that by focusing on metrics related to financial or business results, marketers can effectively demonstrate the tangible impact of their efforts and convincingly demonstrate the value of marketing investments on a limited budget.
“It all starts with aligning marketing metrics with key business goals and setting clear goals. By taking a multi-channel approach to understanding customers, marketers can identify the right marketing KPIs for both offline and online businesses,” says Chan.
“This modern marketing approach recognizes that customers interact with brands through a variety of online and offline channels, enabling a more holistic and effective marketing strategy. »
Reichelt adds that marketers should consider working with external partners who offer specialized expertise, access to data and advanced technology and AI solutions to improve their data-driven marketing capabilities and thrive even in a challenging economy.
He explains that one of the most important opportunities for marketers is to present data and use it to tell a compelling story about how marketing contributes to business goals.
“Cite ROI, customer acquisition, cost reduction and revenue growth to drive effective efforts. Alignment with business goals ultimately strengthens the relationship between marketing and other departments and thus contributes to the overall success of the organization,” says Reichelt.
