Most organizations, whether they are brands, publishers or agencies, would probably say they practice data-driven thinking. In today’s hyper accountable world, “going with your gut” just doesn’t cut it. Every last dollar must be accounted for and demonstrate an ability to contribute to a defined goal. But just having access to data-driven insights isn’t enough. Marketers also need to apply a closed-loop marketing strategy in their data-driven decisions and actions on a daily basis in order to maximize results.
Marketers are still in a transitional stage as they move from data-driven thinking to action. Remnants of the old way of thinking still exist among some organizations because, let’s face it, old habits die hard. For example, I recently had two conversations that represent very different sides of the data-driven spectrum.
New Way of Thinking
Recently, one of my clients made a bold statement, saying, “We date our media partners, we don’t marry them.”
What she really meant is that her company’s relationship with its media partners is purely based on their performance at any given time. This struck me as an example of data-driven marketing in action. All media partners are incentivized based on performance and nothing else; it’s the only way to ensure that every media partner gets an equal shot. Even if a partner isn’t performing well today, it doesn’t mean they won’t get another chance in the future.
On the other hand, just because a partner is performing well today, it doesn’t mean they are guaranteed future budget if other newcomers perform better. This data-driven partner evaluation practice is true for publishers, programmatic partners, and agency partners. Without it, marketers risk complacency among their partners, which can have a negative effect on the bottom line.
Old Way of Thinking:
On the other hand, a friend of mine shared an equally bold statement he heard from a senior member within a marketer’s organization that reflects the other side of the data-driven spectrum. His client proclaimed, “Livelihoods of people [media vendors] are depending on our TV advertising budgets, so changing them would be a problem.”
The practice of traditional TV buying has a long-standing history, making it difficult to change. Deals are cut over drinks and personal relationships. But if marketers truly want to put their organization’s best interest at the forefront, then they need to make data-driven media buying decisions, including with their traditional TV buying.
The practice of data-driven marketing in action doesn’t just benefit brands. It’s also in media partners’ best interests to be judged purely on performance against a key performance indicator (KPI) of the marketer. One of the major challenges clients’ media partners face is ad fraud, which is projected to account for $7 billion in wasted advertising investment by the Association of National Advertisers. Programmatic vendors and agencies are dealing with a lot of different sites, and they don’t have the capacity to check every page of every site on a daily basis to understand where the ad fraud is coming from.
However, if media performance is solely measured against a marketer’s KPI using an algorithmic attribution model that is refreshed on a daily basis, then publishers and agencies can quickly react to reject what’s not working and shift towards what is working, ultimately receiving the proper credit they deserve.
In an increasingly programmatic media buying world, applying this type of data-driven measurement and optimization approach is the only way to ensure that marketers’ media partners can weed out sources of ad fraud because the sites, placements and tactics that perform best will naturally rise to the top. Everybody wins with data-driven marketing in action.