Ask an average marketer in India about how she measures the return on investment of her marketing spends on Facebook or Google, the obvious answer would be an ‘attribution’ method of measuring the ‘last click’ that would have converted into sales.
The big question to be asked is whether it is fair to allocate more money to Facebook or Google just because the final conversion came from either of these platforms. After seeing the ad on these platforms, the customer could have also visited other online platforms to read up about the product, even spoken to a sales agent at the company and then gone back to the Facebook or Google ad and clicked on it to finally buy the product. By measuring only the last click, the marketer misses the larger picture of the consumer’s journey where she would have visited multiple other platforms to research the product. Though digital accounts for over 30% of overall marketing spends of India Inc (with digital-first companies spending upwards of 70% of digital advertising), marketing measurement capabilities haven’t kept pace.
A recent Boston Consulting Group (BCG) and Meta (formerly Facebook) study on digital marketing measurement emphasises the need for marketers to look beyond attribution-led models (such as measuring ‘last click’) and invest on more holistic methods that would track a consumer’s complete journey. “You have to see your entire customer journey and attribute the channel which kind of drove the customer back,” says Pallavi Malani, partner and managing director, BCG.
Looking at measurement beyond the ‘last click’, becomes all the more important in an era where stringent data privacy norms are going to be implemented. The Joint Parliamentary Committee report on Personal Data Protection Bill was tabled in the Winter Session. “Third-party cookies will be completely depreciated in the next few years. Apple is already blocking some of its identifiers and this could add to the complexity of how you measure,” Malani explains.
So, how does one measure a consumer’s digital journey more holistically? The BCG-Meta report recommends measurement of incrementality. It is all about measuring that real impact of marketing on business outcomes. So, if a marketer increases digital spends in certain markets and finds a spike in sales there compared to other markets where spends weren't raised in the same period, it would mean the campaign was effective. “It is taking two identical sets called test and control groups, exposing one to a marketing intervention and seeing what incremental impact that intervention leads to,” says Malani.
Pratham Hegde, director and head of measurement at Meta says, if companies really want marketing to be the engine of growth, measuring incrementality becomes imperative. “What’s the true incremental ROI of your ad spend? The number which you are seeing on the dashboard could be distorted because the conversion could have happened without having spent on the ad on that particular platform,” explains Hegde.
The BCG-Meta report claims that incrementality has delivered results globally. Brands such as Airbnb, Netflix, Diageo, Dominos and Under Armour, which have invested in measurement tools that measure incrementality have witnessed a 50%-60% uplift in sales, 8-10-fold increase in ROAS (return on ad spend), six-fold higher conversion rates and a 35%-40% higher ad performance.
Nippun Aneja, Chief Business Officer at Purplle.com says that the beauty marketplace, which has off late been spending 100% of its marketing money on digital platforms, has been able to increase its efficiency by 50%. It has been able to target consumers sharply by using tools which are geography specific. The company has started using programmatic advertising in a big way and is on its way to be able to measure incrementality. “Measuring incrementality needs a culture of experimentation within the organisation,” says Aneja.
According to Anshuk Aggarwal, co-founder of digital marketing agency AdYogi, incrementality could be one way to measure ad ROI on digital, but one should also have tools that could do online to offline tracking. “If the conversion is happening outside of online, all those systems are not connected. The point-of-sales system of the retailer doesn’t talk to Facebook or Google. For the measurement tool to be effective it has to integrate Facebook or Google with the website, the POS machine at your store as well as the excel sheets that you are maintaining.”
ROI measurement of digital ads is still a work in progress in India. Most advertisers are still flirting with digital ads. Though the pandemic has forced them to increase their spends on digital platforms as consumers have gone digital, measuring efficacy is still an after-thought for most. Dolly Jha, country head, Nielsen Media, says that she is measuring 40% more campaigns today than she did last year. “Companies are measuring on-target performance, unique audience, the kind of reach the campaign has been able to garner and the overall impact of the digital campaign on their ROI, but that is only 20% of the overall digital advertisers.”