In a world of data proliferation, it’s shocking that reach is still a primary tool to measure success.
Reach, while important, only tells part of the story. If advertisers only focus on maximizing reach, key factors are often overlooked such as recency, sequencing, and time between exposure. Furthermore, most of the current technology lacks foundational targeting capabilities which can result in consumers bombarded with the same ads while some not being reached at all.
A more effective form to measure success is Return on Advertising Spend (ROAS), which is performance at scale, divided by cost. In recent years we have been able to gather more information about consumer behavior through the digital world, which has made this form of measurement possible. And given the absolute addiction to our devices, there are high volume, highly correlated, free signals that we can use as surrogates to achieve needed significance against lower volume transactions. Therefore, we can establish the ROAS value of just about any ad opportunity.
The real trick here is that the ad decisions across those ad opportunities don’t conform to the current fragmentation of ad tech platforms and the siloed teams that use them. And the majority of the industry has been lulled into thinking ad decisioning is about bidding in an auction. Growing attitude seems to be that “if it’s not in an auction, it’s not decisionable.” Well, I hate to tell you, outside of direct response for things like app downloads, optimal ROAS is driven by advertising, not in an auction. But yet we seem to have forgotten to apply data and optimization to planned and guaranteed media.
The biggest impact on ROAS takes place during planning, which is still dominated by linear (and seller-controlled) streamed media. During this planning phase, agency investment teams and broadcaster sales teams should focus on working together to enable the use of data for outcome-based planning, whether it be closer to a walled garden or more buyer optimization friendly. With collaboration and a focus on attribution, outcome-based planning is relatively easy.
The least understood and most impactful opportunity is across the digital direct channel. Since this media is digital, there is an assumption that it is data-rich and optimized. It’s far from it. If the broadcaster feels they need to retain ad decisioning rights, they need an ad server capable of elegantly optimizing against audience and content, while managing clash, compliance, and yield.
Most don’t have one. If the broadcaster chooses to pass that heavy lifting (and cost) to the agency (who wants that and is willing to pay more for ad decisioning rights), then the agency needs its version of an ad server capable of elegantly optimizing against audience and content, while managing clash and compliance constraints to the broadcasters satisfaction. Bottom line, the digital direct channel has the greatest impact on ROAS given how premium and addressable the media is. But it’s the most poorly understood and supported channel.
Finally, there is programmatic spend. While data optimization is utilized, it is often overused and isolated from other elements of an advertiser’s overall campaign. Don’t think you can drive ROAS against car sales by overloading your advertising to those who consume long-tail, freebie, content. Unfortunately, poor use of data on planned and direct media does just that, it overloads the use of poor quality supply. DSP and SSP solutions should be thought of as capabilities that are well choreographed to the rest of one’s advertising. Programmatic KPIs and ad decision logic should be in lockstep with planned and direct activities. Supply and demand within the programmatic ecosystem should be used opportunistically in conjunction with core advertising. It should not be a foundation.
As we transition away from cookies, the time to transition to ROAS measurement is now. There is an opportunity to improve the effectiveness of advertising by reducing ad loads and improving ROI. TV has so much impact on the effectiveness of advertising. And TV consumption and advertising is changing at light speed. There is an opportunity to significantly improve the effectiveness of advertising, ultimately resulting in reduced ad loads, but greater ROI and yield for all. Yet we continue to focus on outdated targeting, optimization, and measurement tactics that leave all that potential wasted. Let’s not leave waste on the table and capture the potential that’s in front of us.
Founded in 2005, Amobee is an advertising platform that understands how people consume content. Our goal is to optimize outcomes for advertisers and media companies, while providing a better consumer experience. Through our platform, we help customers further their audience development, optimize their cross channel performance across all TV, connected TV, and digital media, and drive new customer growth through detailed analytics and reporting. Amobee is a wholly owned subsidiary of Tremor International, a collection of brands built to unite creativity, data and technology across the open internet.
If you’re curious to learn more, watch the on-demand demo or take a deep dive into our Research & Insights section where you can find recent webinars on-demand, media plan insights & activation templates, and more data-driven content. If you’re ready to take the next step into a sustainable, consumer-first advertising future, contact us today.