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founder and CEO of segment streamis a conversion modeling platform that solves marketing analytics in a cookieless world.
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There are many different approaches to marketing measurement that help businesses understand which campaigns will deliver the most value and how to allocate budget to maximize ROAS. The most established are:
• Multi-touch attributes.
• Incremental testing.
• Marketing mix modeling.
• Transformation Modeling.
Each approach is better than the other, but has certain limitations that don’t give good results. Before we look at marketing measurement approaches, let’s look at the current situation in which they have to operate: a world without cookies.
What would a world without cookies look like?
A cookieless world is a term that describes the current state of marketing measurement approaches and will only get worse. These include the following restrictions:
Restrictions on use of cookies
Cookies are the holy grail of marketing measurement. With the help of cookies, we can observe a user’s journey and understand which channels lead them to conversions.
However, cookies currently have a limited lifespan. For example, Safari only lives up to 7 days in some cases. This means that if a sale occurs 7 days after him, it will not be attributed to his cookie in the first place and no credit will be given to channels upstream in the funnel.
In addition to this, cross-device and cross-browser tracking is not possible.
tracking limit
As the Internet moves toward building a more privacy-centric place, there are certain tracking limits to help users have a better and safer experience on the web.
For example, some browsers block third-party cookies by default, while others do not allow cross-site tracking.
Compare common data-driven approaches with marketing measurement to see if they deliver good enough results in the current situation.
Multitouch attribute
A multi-touch attribution (MTA) model is supposed to determine and assign the value of each touchpoint along the path to conversion. The MTA model requires a key that binds all touchpoints into one journey (a cookie or login ID).
However, the MTA model shows similar results to the single-touch one. The entire customer journey cannot be observed, only the lower channels of the funnel are evaluated. Marketers are therefore unable to obtain accurate enough data to base their strategic decisions on.
incremental test
Simply put, incremental testing is an A/B testing method that measures the incremental value of your marketing strategy. The main difference is dividing the target audience into her two groups, test and control. The control group is exposed to marketing activity that needs to be measured, and the test group is exposed to nothing.
Calculating incrementality involves calculating conversions that happened because of your marketing campaign and conversions that would have happened anyway.
There are cookie-based and cookie-free incremental testing tools. Cookie-based ones are more common. Split your audience randomly. This is a good way to get fair measurement results. However, this method requires the conversion to occur within the same cookie.
A cookieless approach divides your audience by geography, demographics, and other parameters that are tracked without cookies. Such a split is not very random. Therefore, test and control groups can be affected by many factors, such as sale periods and other advertising channels. As a result, experiments can be difficult to run and marketers may not get the right results.
marketing mix modeling
Marketing mix modeling (MMM) is the in-depth statistical analysis of sales over time and the factors that influenced those sales. Evaluate all budget allocations to digital and offline marketing channels at a macro level (TV/radio advertising, print advertising, digital marketing, etc.).
Multiple factors are considered, from market conditions to product prices to seasonality. MMM can then detect spikes in sales, determine whether they were caused by the aforementioned factors, and calculate the potential impact of further activity within a given macro channel.
The MMM tool is well suited to be run once over an extended period of time (e.g., once a year) to radically revise all marketing efforts, both digital and offline. MMM helps you make data-driven budget allocation decisions across channels, markets, or brands. Although it is an excellent tool for retrospective analysis, its application is limited to some situations. MMM does not help assess the impact of marketing activities on the go or at the micro level.
conversion modeling
Conversion modeling uses machine learning algorithms to assess the impact of all marketing efforts when actual conversions cannot be observed. Useful when other attribution models and marketing measurement tools have given up, i.e. conversion paths include cross-device interactions, initial cookies have expired, or you need analytics on the fly.
Nevertheless, moving to conversion modeling requires certain changes in processes and marketers’ mindsets. First, it’s important to accept the fact that cookies, which are still in use today, don’t give marketers the opportunity to track a customer’s journey as accurately as they did a few years ago. Marketers must stop relying on cookies and start looking for alternative approaches before it’s too late.
Second, the aforementioned limitations force marketers to stop calculating return on ad spend for each channel. Calculating this metric at the channel or campaign level is already nearly impossible and will become even more complex in the future. Instead, start calculating her ROAS across the marketing mix to avoid improper optimization of the marketing mix itself.
It’s important to understand that the adoption of machine learning is an important part of adapting to a future that seems like a black box due to privacy regulations.Marketing measurement tools have relied heavily on cookies, Data collection is no longer accessible. Understanding how machine learning can turn small slivers of still available data into actionable insights is a critical step to gaining a competitive edge in a world without cookie-based measurement.
Beat the world without cookies
The fact that tracking restrictions and cookie restrictions are increasing more and more every year, and the whole Internet browsing experience is moving towards providing a more private experience, makes it possible to one day live in a completely cookie-free world. You can expect it.
With this in mind, marketers should look for better alternatives to their usual marketing measurement tools and approaches.
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