Beauty and personal care marketplace Purplle.com has started spending 100% of its marketing dollars on digital platforms such as Google, Facebook and Instagram. According to chief business officer Nippun Aneja, the digital-only strategy has increased the company’s efficiencies by more than 50%. “It helps us create demand in relevant geographies, which is difficult in traditional ways,” he says.
The new-age beauty company extensively uses Google’s Ads Data Hub to get granular insights. “Like, for instance, consumers in Kolkata in the 18-34 age group organically download our app after three or four exposures, while in Delhi two-three exposures are sufficient to convert. Similarly, ROI Hunter helps us understand which of our products out of the 30,000 SKUs are giving good CPR (cost per rating point),” adds Aneja.
Though both Facebook and Google offer high return on investment (ROI)-driven data measurement, it is limited to their respective platforms. Aneja’s challenge is to get a holistic view of a consumer’s journey across platforms, which would help him allocate money efficiently.
The challenge is similar for legacy retail brand Raymond as well. “Facebook, Google and other platforms are not synchronised. Whether your sale is coming from the Google or Facebook click isn’t clear as the consumer may have viewed both. Marketers like us struggle since the data given by both platforms are different,” explains Ravi Hudda, chief digital officer, Raymond. Over 80% of digital spends in India happen on Google and Facebook.
With Indians spending an average of more than six hours a day on digital platforms, not investing in online marketing is no longer an option. According to a recent report by Boston Consulting Group (BCG) and Meta (formerly Facebook), 55% of digital media investments can be sub-optimal due to inaccurate measurements, and there could be 65% higher cost of acquisition due to poor measurement. The report also says that over 70% organisations in India under-invest in digital measurements. “There are multiple marketing measurement practices in the industry without any clarity on what really is creating the right impact,” says Pallavi Malani, partner and managing director, BCG.
“Large advertisers are measuring the kind of on-target performance the ad is garnering. On the efficacy side they are investing systematically to figure out how digital performs fares versus TV in terms of ROI. They are also able to evaluate between five placements which have given them the best ROI. But majority of advertisers rely on their own measurement tools,” adds Dolly Jha, managing director, Nielsen Media.
So, how does a marketer measure digital spend? The simplest way is to measure the last click. If the final sale came through clicking on a Facebook ad, the advertiser would end up attributing the ad to Facebook. But the customer journey isn’t as simple, explains BCG’s Malani. For example, a customer may have been led into buying an insurance product through a Facebook ad, but just because it was the last click it may not have necessarily influenced her buying decision. She may have first seen an ad in the newspaper, researched the product on Google, called an agent to know the details, came back to Google to do more research, and finally came across the same ad on Facebook which she would have clicked to initiate the purchase journey. So, the question now is, would it be fair to attribute 100% ROI to the Facebook ad just because the last click happened on that platform? What has got missed out is the fact that the customer had first seen the ad in a newspaper and then researched it on Google.
“You tend to think that the channel which gave the last click is the most effective. You divert a lot of your budget towards that channel, whereas the earlier channel which may also be driving impact tends to get missed,” explains Malani.
The chances of an ad overlap are also high, points out Anshuk Aggarwal, co-founder of digital marketing agency AdYogi. “The sale may have come through both Google and Facebook, so who do you attribute your sales to?,” says Aggarwal. “When Facebook attributes, it says if you make a purchase in the next 28 days, I will call it my sale. Google says if you click on my ad and if you make a purchase within a 30-day period, then it’s my sale. Therefore, the chances of consumers interacting with both Facebook and Google are really high. The solution is to find a neutral measurement partner,” he adds.
When it comes to a common measurement tool, most advertisers resort to Google Analytics, which shows a customer’s journey across platforms. The marketer at her end creates her own method of attributing a certain percentage to each of these platforms. However, she still can’t make out which platform contributed the most as Google Analytics will not have access to data of competitor platforms. Neither will it have a clue of the customer’s offline journey prior to the click.
Measuring clicks and attributing ROI to the last clicked ad could be a superficial method of measuring the efficacy of an ad, say experts. It is important to measure ad incrementality too. So, if an edtech company runs a Facebook ad in three states, apart from measuring the campaign in those states, it should also measure the impact in three others where it didn’t run the campaign.
Also, a consumer searching for florists on Google might click on an ad of a florist which the search throws on top, but may get influenced by some other site and buy from there. So, for the florist who has spent ad dollars to be on top of the search, it didn’t lead to any conversion, but the conversion happened for someone who didn’t spend any money. “The conversion could have happened without having spent on the ad on that platform. You need to measure the net incremental impact of the ad since it will give you the true incremental outcome,” says Pratham Hegde, director and head of measurement, Meta.
The BCG-Meta report claims brands which have invested in incremental measurement have seen a 50-60% growth in sales, 15-25% increase in gross margins and 35-40% higher ad performance. Globally companies such as Airbnb, AT&T, Diageo, Domino’s, Netflix and PepsiCo, which have unlocked significant value by thinking incrementally. In India, however, the number is far and few.
In order to allocate the right investment to the right kind of platform, it is important to be part of a measurement system which is platform agnostic. “What do you need is a true measurement platform which is agonistic of everything else, it should be able to cover the entire customer journey,” says Vyshak Venugopalan, principal solution consultant, Adobe India.
So, why is it taking so long for a standardised digital tool to be introduced? Digital measurement, says Aggarwal of AdYogi, is extremely complex. “The point-of-sale system of the retailer doesn’t talk to Facebook or Google. The challenge of a common measurement tool is the journey between showing ads to the path of conversion to actual conversion — all of these happen in different ecosystems. For the common measurement tool to be effective it has to integrate the online platforms, the POS machine at the store, as well as the excel sheets that the brand is maintaining.”
Several organisations are creating measurement tools in-house as they believe that external measurement firms aren’t giving them the complete picture. “We have a method of attributing every transaction that takes place, whether it is organic or inorganic,” says Ambareesh Murty, co-founder and CEO, Pepperfry.
According to Nielsen’s Jha, with the world going more and more digital, ensuring that the right money is spent on the right channel is critical.