By Joe Robinson, President, Catapult
John Wanamaker's famous quip, "Half my advertising is wasted. I just don't know which half," can finally be relegated to the dustbin of marketing history -- but only if we're ready to make it happen.
Wanamaker's dilemma is one that has vexed the entire marketing world for about 150 years now: the inability to directly, definitively correlate marketing stimuli to sales. But the solution is finally at hand, because the promise of "smart data" has arrived. Direct attribution is now attainable.
We now can analyze the data we collect, develop our marketing strategy accordingly, execute our campaigns more precisely and measure actual results through attribution. The loop has been closed and the outcome is better marketing: more efficient spending for us, and more relevant messages for consumers.
So what is attribution and how does it finally close the loop? It's not a magic bullet; it's simply data that can accurately measure whether or not specific marketing stimuli produce the desired results. Until now, we've measured our efforts through samples and models; in the case of marketing mix analysis, we've assigned sales to specific initiatives based on which buckets of store transaction data weren't exposed to the stimuli -- a kind of reverse attribution.
But today, we can create unique, anonymous identifiers on a consumer's laptop, tablet and smartphone, then match those IDs to the same individual's frequent shopper card, credit card, app usage and geo-location. We no longer have to think that a certain segment bought the product, we can know that a specific consumer made the purchase -- without compromising privacy.
So it's surprising that few marketers have started leveraging this new method of attribution, and instead seem content to remain operating in the old modeling world. To find out how many of our own clients are embracing the promise of smart data, we asked a simple question: What measures do you use to understand the value of your marketing efforts? Most of their responses sound pretty outdated: "Click-through rates," "Display activity," "Likes," "Redemptions," "Shares" and "Coupon downloads," to name a few.
These metrics might do an acceptable job of measuring engagement with consumers and/or retail partners. But they're unable to deliver on the measurements that really matter in marketing: building sales, loyalty and brand equity. To accurately measure what really matters, attribution needs to become the new currency.
The marketing industry is experiencing a number of groundbreaking changes as smartphones become ubiquitous, e-commerce expands in all product categories, U.S. demographics shift dramatically, and all of these trends help drive an astounding amount of consumer data to analyze.
Any one of these changes might wreak havoc on a marketing plan, but taken collectively they can turn marketers into the proverbial frog in the boiling pot -- forced to react tactically to immediate marketplace changes rather than strategically to develop long-term, growth-driving action. So it's understandable that a lot of marketers haven't been able to focus on attribution quite yet.
These changes are making it imperative to do so, however. The marketing model that enjoyed its heyday back in the 1970s-1980s -- the three-legged stool of 30-second commercials, cents-off coupons and high-low pricing --is no longer sufficient for influencing consumer behavior. Marketing needs to undergo the same revolution that consumer behavior already has. We need to have two-way conversation, not one-way shouting; we need to provide value, not just low prices; and we need to deliver relevant solutions, not just generic promotions. These are the efforts that produce results today, and these are the efforts that can accurately be measured through attribution.
Importantly, understanding what message is most relevant to your consumer and when and how to best reach them with that message not only reduces waste, it makes brand building more powerful, memorable and effective.
Right now, real data directly aligned to your marketing initiatives -- much of it deliverable in real time -- is available at your fingertips. Through transactional sales databases, the Internet of Things and unique-ID tagging, the loop between stimuli and sales has been closed. The only thing missing is marketers who are ready to use these tools to measure results.
So if 50% of your advertising is still being wasted, you can't blame the lack of direct measurement anymore. It's your own fault.