Advertisers Push for Data to Measure Audiences in Multiple Channels

by   |   May 23, 2013 5:32 pm   |   0 Comments

PHILADELPHIA—In case advertisers hadn’t noticed, the era of the double click is dead. In its place: a world of quadruple clicks and multiple finger swipes, a multiscreen shopping experience in which advertisers need to target their message across a plethora of platforms to make a sale.

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For advertisers, the challenge is how to measure the effectiveness of their ad dollar when consumers hear about a product on television, research it two days later on a mobile phone, comparison shop on other websites using a desktop, before finally closing the sale on a tablet on their commute home from work.

“A lot of people are seeing ads on mobile phones but when they buy the product they are using the larger screen on PC or laptop,” said Anindya Ghose, professor of Information, Operations and Management Sciences at New York University’s Leonard N. Stern School of Business in New York.

Ghose was one of several panelists who spoke at a May 16 conference at the Wharton School’s Future of Advertising Program which explored innovations in measuring advertising effectiveness.

For managers looking at the click-through and sales data, new shopping habits anchored in multiscreen behavior pose a quandary. Where does management plunk down the ad dollar to get the most bang for the buck?

Mobile ads influence not only mobile purchasing propensities, but Web purchasing habits as well. Mobile clicks precipitate conversion to a sale on the Web, and Web clicks precipitate conversion to a sale on mobile platforms, said Ghose.

As a result, there’s an increase in sales when Web and mobile ads are active on both devices within the same time period, and managers who spend their entire ad budgets on the mobile channel only risk missing out on reaching consumers through the PC channel.

Ghose, who spoke on the interdependence between Web and mobile advertising, said takeaways from his research were that mobile ads influence cross-media conversions to a sale and that ad campaigns need to incorporate the relationship buyers have across multiple devices.

The multichannel model is where the future is headed, said Justin Petty, vice president of global media solutions and partnership with DunnhumbyUSA, the Cincinnati-based branch of the British data and customer analysis company.

Exposing consumers to multiple channels before they make a buying decision isn’t new, of course, but new Web-based channels—mobile and social media—require new data models to allow marketers to track consumers who surf from a Facebook ad to a Google search to pressing “buy” at the online shop, said Eva Anderl, a Ph.D. candidate at Universitat Passau in Germany.

The trick is for companies to figure out the relative value of each click as consumers jump from one channel to another.

Field Notes from Ad Researchers

The Wharton Future of Advertising conference was filled with young executives eager to share their latest findings using Markov simulations and regression models to explore connections between incremental purchases and the frequency of online display ads, for example. Among the projects researchers discussed were the following:

More online ads do not necessarily lead to more sales. The connection between an incremental online purchase and a higher frequency of ads remains a tenuous proposition, the researchers found, though more ads lead to more searches for products and services.

Online display ads are generally effective, yes, but there are a host of variables – dependent and independent – involved in determining just how effective, said Garrett Johnson, a doctoral candidate in economics at Northwestern University.

Johnson, who conducted research with three million customers in conjunction with Yahoo and a major retailer, said variables determining the effectiveness of an online ad range from proximity of where the ads have run, how recently they have been shown, how loyal the audience is to a product, and the income segment of the buyers.

In all cases, he said, it pays for businesses to invest in a few statistical calculations before assuming that more online display ads will translate into more sales.

Traditional research methods still apply. Businesses need to establish baselines and use “control” ads to benchmark their campaigns, and ad managers who target ads more carefully stand to improve future campaigns, he said, adding that focus groups remain a good use of money. “Test the effectiveness of the ads with focus groups,” Johnson said.

Watch out for measurement errors. Randall Lewis, senior economic research scientist at Google Inc., warned of “attenuation bias,” caused by measurement errors when looking at ad effectiveness. “There are so many areas where attenuation bias can get in,” he said. “Try and pin down specific numbers.”

Search continues to matter—a lot. There is a very strong relationship between ads and search, Lewis said, as people are drawn to a product and take it upon themselves to find out more about a particular product, even if they may not buy it in the end.

In the auto segment, for instance, Google sees an immediate increase in search across all competitor brands when an ad for Acura pops up, he said.

Advertising influence depends on the channel. Format is yet another variable that affects an ad’s effectiveness. Porting over a successful Web-only campaign is no slam dunk when it comes to TV or other channels, said David Reiley, a Google research scientist.

TV ads, he said, are much more “in-your-face” than an online ads. “I’d be cautious about extending online ads to other forms.”

Justin Petty of DunnhumbyUSA said that people seeing ads on Facebook—in effect PC users—are price sensitive. TV ads, by contrast, are pushed onto viewers, which is a completely different audience, and companies are asking how to approach these different audiences through their advertising.

“That’s an interesting question for marketers,” Anderl said, particularly small and midsize companies who still use simpler models that rely on standard advertising performance measures which are no longer adequate.

Her model, implemented at the German tracking company intelliAd, helps allocate advertising dollars as a function of the value of the exposures, and gives greater weight to search engine optimization, Anderl said.

Andy Fisher, senior vice president and chief analytics officer for Merkle Inc., said one of the big trends in the industry today is for advertisers to incorporate social media into the more traditional media mix and attribution models. Results have by and large been uneven, but the movie industry has had the most success with it so far, he said.

Other techniques to measure advertising effectiveness include eye-tracking and emotional responses on people’s faces, said Daniel McDuff, a research assistant with MIT Media Lab. “More and more people are watching ads online and TV online, so there’s a two-way relationship where we can collect information on their responses to the content,” he said.

That is, though, only if they agree as part of an opt-in process to be tracked, and even McDuff conceded that the “self-selection bias” needs to be taken into account.

Video platforms are still another data gold mine for retailers and advertisers, said Anuj Kumar, assistant professor of information systems management at the University of Florida’s Warrington College of Business Administration in Gainesville.

After the introduction of product videos, which allow shoppers to see what they might look like wearing different pieces of clothing, one midsize women’s apparel retailer saw a 15 percent increase in sales of its featured product, and a 31 percent increase in sales of coordinating products, Kumar said.

Mining that data could yield a wealth of information about shopping preferences, leading to more effective advertising, even if companies have not exploited video-based data techniques to their fullest potential, Kumar said. Data collected by video can be assimilated relatively cheaply using back-end systems, he said.

Yet for all the charts and graphs and the overwhelming rationality that governs advertising effectiveness measurement today, Orlando Wood, managing director at BrainJuicer, an international market research and analytics firm, said the most effective – and profitable – ads are the ones that connect emotionally with people.

When it comes to making a decision, “we think much less than we think we think,” Wood said, gleefully casting aside – if only for a moment – all the day’s statistical analysis. “The way advertising works is by making you feel something for the brand and nudging you in its favor.”

Cyril Tuohy is a freelance business writer based near Philadelphia. He can be reached at cyriltuohy@gmail.com

Home page photo of family watching TV via the National Archives and Records Administration.








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