Commercial Mix Modeling: Measurement Evolved
When evaluating how our industry has approached multi-touch attribution (MTA) solutions, I think of what fitness guru Susan Powter would say: “Stop the Insanity!”
Ok – I may be dating myself again, but in the 90s Susan Powter had enormous success through her message that losing weight and raising your self-esteem were not a condition of buying expensive equipment or magic pills. Powter proposed that good health was a matter of making smart food choices and sticking to a moderate exercise routine. This simplified, common-sense advice and a minimalist approach to wellness flew in the face of ubiquitous infomercials and advice from the media.
Much like the empty promise of so many of the weight-loss schemes that Powter challenged in the 90s, MTA has also not delivered on its promise to provide a 360-degree consumer view with deeper customer understanding, campaign optimization, and a subsequent stronger ROI and to deliver all this quickly through turnkey technology. While the value proposition is compelling and many brands and providers have given it a try, MTA has fallen short of delivering on its promises.
As a result, there has been a great deal of industry discussion and debate about why MTA is flawed. It is covered at virtually every industry conference. Industry groups have held panel discussions, conducted surveys, designed meta-studies, and issued reports to find out why MTA is developing a reputation for failure – including a negative NPS score, year after year.
The MTA promise suggests that with user-level intelligence you can gain a complete picture of your customers’ activities to better target, capture the full customer journey, and measure the impact of campaigns. But this promise has been challenged by significant data blind spots that are growing due to cookie deprecation. Cookie deprecation is driven by many factors including privacy concerns, government legislation, consumer sentiment, and walled gardens control.
CPRA (California Privacy Rights Act) just passed on the ballot in California and represents an update to CCPA the legislation that went into effect in January 2020. California will now have a Privacy enforcement agency and the new legislation has specified that any specific advertising counts as the sale of information. This means as of 2023 Californians (and therefore all Americans, for the practical reason that you cannot identify Californians from other Americans when online) can go to any website and click on a link or have their browser send a signal that says “do not sell my information.” That means consumers will have the ability to opt out of behaviorally targeted advertising.
In addition, due to consumer privacy concerns and increasing legislation, walled gardens that once shared data at the user level necessary for MTA are further restricting data. Earlier this year, Google announced it will cease allowing its third-party cookie from being shared outside their ecosystem. Subsequently, Apple announced that it will incorporate new privacy measures for IOS early next year which will subject the IDFA (Identifier for Advertisers) to require opt-in consent from consumers.
To address data deprecation including consumer privacy concerns, there are consortiums and companies working on a new data infrastructure that will let consumers continue to get personalized ads where they want them and where consumers will have control. But that is years away and the future is still questionable. Much like expensive exercise equipment which has great promise, Identity is another option but the high cost and limited scale will not work for most brands. While there are many great efforts, there is no replacement for the cookie. As a result, measurement at the user level will either be siloed inside the walled gardens or will require painful stitching of identity data that may very likely not represent your business.
It is often said that the “definition of insanity is doing the same thing over and over again and expecting a different result.” Given the incredible data restrictions and subsequent blind spots, we need to recognize that we will fail if we apply an MTA solution to address today’s measurement and decisioning needs. We need to move our measurement beyond MTA to address the uncertainty of today and futureproof for tomorrow.
Likewise, Marketing Mix Modeling which often complements MTA with a top-down/bottom-up approach is not the solution. Marketing mix modeling is not granular or quick enough to be actionable. Top-down, bottoms-up MMM+MTA as Unified Measurement does not meet the accelerated needs of marketers to create powerful connections with their customers and drive growth in the new reality of cookie deprecation.
Analytic Partners offers a future-proofed solution to drive our clients towards success. We do that through our Commercial Decisioning System, with Commercial Mix Analytics at its center as shown below. Commercial Mix Analytics is a multi-dimensional and multilevel solution that leverages deep granularity, only connecting to the user-level where it is available and will add value. This is a holistic, unified approach that blends statistical models with machine learning/AI to deliver depth and breadth of insight at speed and scale.
By approaching modeling with deep granularity, digging deep within channels and touchpoints where needed, and connecting data at multiple levels – Commercial Mix Analytics delivers the intelligence to support forward-looking decisioning. With Commercial Mix Analytics, we can break from that top-down/bottoms-up trap and broken promises of MTA, in a future-proof, privacy-friendly way. And by doing so, we as an industry can finally stop the insanity and move beyond Multi-touch Attribution.
- Nancy Smith is President and CEO of Analytic Partners
Analytic Partners can help your business adapt.Talk to an expert.