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Measurement. It’s the word on every Chief Marketing Officer’s mind and the one aspect of advertising that hasn’t changed much since the dawn of the digital age. Sure, there’s
Early this month, Ad Week brought countless agencies and CMOs to New York City, where they discussed the topic of measurement, “Big Data” and analytics ad nauseam. But according to Alex and Ani advisor and former CMO Ryan Bonifacino, the conversations that took place off-stage were far more telling.
“We were meeting with a ton of agencies, and for the fifth year in a row, we were disappointed that agencies aren’t able to move and reinvent themselves as we’d hoped when digital came onto the scene,” he says. “When it comes to media measurement, agencies just seem to be confused. There’s an inability to understand analytics beyond the typical way they’re used to measuring commerce.”
The typical way of measuring marketing goes something like this: A brand puts up an ad on
But that kind of measurement is inherently flawed. It’s what my business partner, TSC’s Insights and Analytics Leader Dionna McPhatter calls “tunnel vision analytics”. It assumes people only interact with a brand on one platform. And it assumes that CMOs are absolute idiots.
“So maybe that customer saw an ad on Facebook,” McPhatter says. “But perhaps later that day she saw a television ad, or talked to her best friend who recommended the product. There’s a whole ecosystem at play here that many analytics companies ignore, to the benefit of their statistics—and to the benefit of the agency that reports those statistics.”
In reality, the path to purchase for a consumer isn’t a straight line. It’s a winding road with pit stops and u-turns along the way. Bonifacino knows that wild ride well. As advisor and former CMO to a $300M+ American-made jewelry line, it’s his job to attract more business and to aptly invest in growth. He can’t afford to make decisions based on misinformation.
“If we were just e-commerce, it would be much easier to measure,” he says. But in addition to e-commerce, Alex and Ani operates brick and mortar retail and wholesale sales channels, partnerships with charities, and licensing partners such as Disney, NFL, MLB and a whole host of other revenue sources. (You don’t grow 5,221% in three years without building some layers to the business.)
“Now combine all that and cut it in half,” Bonifacino states, “because half of customers are there to buy for themselves and half are gift givers. It’s complex.”
To verify the analytics coming past his desk, Bonifacino keeps a Ph. D. from Chicago Booth and a Ph. D. from MIT on call. It’s an investment, but it’s one he’s never questioned because the assurance makes him that much more secure in every business decision.
“ Major brands don’t see that traditional measurement is flawed ,” he says. “Agencies are taking credit for any rise in business, rather than looking at what it truly took to get that next person to take that next action.”
Digital media has transformed the way brands do marketing—and it’s about time it transforms the way we measure, too. These days, producing commercials, creating ads, and reaching consumers is cheaper and faster than it’s ever been before. There’s no reason that measuring those actions can’t be affordable and speedy too.
Unfortunately, measurement hasn’t yet caught up to the innovation of the marketing itself. As it stands, analytics companies are trying to capture the entire ecosystem, but as mathematicians, their focus is to build algorithms that are error-free, and so they busy themselves building the equivalent of the Watson computer for business metrics—in other words, overkill.
What is necessary is for agencies to step out of their comfort zones and begin innovating in the realm of measurement. With access to coders, insights and analytics professionals, or individual technology experts, agencies can help take the burden off of brands to verify the data they report.
The lesson? Demand more from your agencies. Because what CMOs want—and what they deserve—is the truth.
