The need to ‘decode’ our data reality | M&M Global

The need to ‘decode’ our data reality

There is a misalignment between agencies and advertisers when it comes to measuring success, argues Chris Le May, SVP and managing director for Europe and emerging markets at DataXu.

Chris Le May

As marketers continue inching further and further towards a cross-device, programmatic world, data has quickly become the currency of marketing.

In a digital world, where every transaction creates a new data point, our industry started to build an entire eco-system around an unprecedented amount of data. The result: we became so fixated on data, and so obsessed with the power and promise it offered, that we are now addicted to measuring absolutely everything.

It is perhaps time we admitted we have a data problem. Maybe we need to decode the reality of data differently.

As an industry we have not done ourselves any favours by compiling vast databases of information that sometimes never see the light of day. Add to all of this the marketers’ angst — the pressure to become a quant enthusiast, on top of making money for their brands.

Too much of a good thing?

With the ability we now have to gather, analyse, and act upon every data point across the customer lifecycle, there is a danger data could become too much of a good thing. Let’s face it: data available to many marketers is still fragmented; and the ever-changing nature of new tools and systems means brands (and agencies) cannot always keep up and might be lead astray when determining what’s driving conversions and revenue.

When digital first came along, people were wowed that they could measure every interaction with their ads. The pace of innovation and range of advertising technologies available in the market meant that we all talked in great detail about click-through rates (CTRs) or cost per actions (CPAs) — or, as I call them, ‘interim digital proxies’.

Although there is still value to these metrics, if I were a marketer I would be far more interested in seeing what effect my marketing investments have on the bottom line. It’s time to expand our perception of data.

“The reality is that whenever an agency in the automotive sector drives a brochure download it actually costs the client money to print and post it”

One issue we unfortunately often see is a misalignment between agencies and advertisers when it comes to measuring success.

To give an example, if a media agency were asked about the marketing objectives for an automotive client, the answer invariably would be focused around penetration rates into the core demographics, driving page lands, test drive bookings and online car configurations. Ask the same question to the client CMO, and the answer will be more straightforward: “I need to sell cars”.

In this scenario, the agency is measuring campaign success rather than aligning marketing investments to business KPIs. Misinformation is a dangerous thing, and correlation, as opposed to causation, is a very misleading thing indeed. Marketers should not assume that if someone takes the time to download a brochure, they are more likely to go on and buy that car.

The reality is that whenever an agency in the automotive sector drives a brochure download it actually costs the client money to print and post it. When someone completes a car configuration online it doesn’t make them any money. Rather, it costs them because they need to invest in infrastructure to maintain that service.

These metrics actually costs the brand money and all based on a loose correlation that there might be a higher propensity to buy. This is not to say that an increased propensity does not exist; but these interim proxy behaviours are certainly not established as causal.

Establishing causation

Nowadays we can optimise the overall marketing investment toward the ultimate KPI, which is often unit sales. The technology exists to accurately establish causation in marketing investments and measure sales that have been effected by marketing investments in a given geography, period and channel mix.

Ultimately, marketers invest their budget with the aim to increase their company’s revenue, not to create a peak in brochure downloads or increase a click-through rate. Yet all too often these are seen as signs of success.

How are brands addressing the data challenge?

The evolving role of a marketer, from being the guardian of the creative manifestation of a brand to becoming the champion of data-driven efficiency, is coming to its full glory. What is more exciting is the ability to now measure success by directly connecting sales with the marketing investment data with scientific certainty and rigour.

As a marketer, the one piece of data that you want to get your hands on is unit sales data. However, most marketing teams are quite far removed from those insights. While the sales departments are likely to have their own data and automation systems, marketing needs to have its finger on the pulse of this information if it is to extract meaningful insight into customer behaviour as driven by its investments.

“Fast forward a few years and marketers won’t concern themselves with how data is used”

Ultimately, it is not the data nor the process that is the real issue. It is the perspective and the drive to prove outcomes. Brands need an approach that can tie their activity back to actual sales.

A good example is Vodafone, which employs a scientific media mix modelling approach to determine its overall channel investment. It uses randomised experiments to test different levels of investments per channel and these data points make it possible to identify the causal relationship between marketing investments and sales. By implementing the learnings from the model, Vodafone has improved the efficiency of its marketing investments by more than 10%.

The good news is the union between marketing and advertising technology is strengthening, and, at the same time, advertisers are applying more scrutiny to understand both data and tech and how it is being applied to enhance customer experience.

Fast forward a few years and marketers won’t concern themselves with how data is used, will take less interest in how tech works, and will view it as more of a hygiene factor. Instead, marketers will learn to trust their technology partners and shift their focus to the results and implications of using data to deliver return on investment. Now, go and find the person that sits on your sales data.

Chris Le May

SVP and managing director Europe and emerging markets, DataXu

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