Field Reports - July 20131 Jul, 2013 By: Thomas Haire, Doug McPherson Response
Netzley Waxes on the Web Attribution Challenge
By Thomas Haire | firstname.lastname@example.org
As leader of Carlsbad, Calif.-based Havas Edge, Steve Netzley has seen the evolution of the television advertising industry first-hand — especially the DRTV business. With Web sales now surpassing 50 percent of all orders for DRTV products (and in some cases rising as high as 95 percent), the ability to attribute which sales are coming from which ads — the crux of DRTV’s effectiveness — has become more and more difficult.
Recently, Response caught up with Netzley to chat about the issue, which is one of the biggest to face media agencies in years.
Q: What does the term “Web attribution” of direct sales mean to you when you hear it?
A: To me it means the process of determining what media sources drove the activity that occurred on a given website. In order for a marketer or agency to know how the media they are buying is performing, it’s become critical to attribute back, with a very high degree of accuracy, the activity that’s occurring on the websites being featured in the advertising. Just attributing the call center activity (if there is any) is no longer good enough on its own to inform predictable buying decisions.
Q: Are folks in this business misconstruing what “Web attribution” means? If so, how?
A: I’m not sure if they are misconstruing what it means, but I know there are a lot of very divergent views on how to attribute Web activity and how important it even is. At Edge, we believe that highly accurate Web attribution is critical to the ongoing success of any campaign that shows a URL in its advertising, and we are investing heavily in technology, third-party data and personnel to make sure we are continuing to improve the accuracy of our models.
Q: What are some of the biggest myths surrounding Web attribution when it comes to direct response campaigns?
A: The biggest myth I’ve heard to date is that how much you paid for a piece of media should factor into how Web activity is attributed. I’ve seen several Web attribution models from some fairly large organizations that are all using media rate as a variable in their Web attribution algorithms. Obviously, if you get a piece of media for free — or if you pay $10,000 for it — the activity that media will drive to a website won’t change based on what you pay for it, and therefore any attribution model using media rate as a factor in how to assign Web responses back to media will be inaccurate. Another huge myth is that one attribution model works for all campaigns. Though this would be incredibly convenient, we’ve found that every campaign behaves uniquely and the only predictable models are custom models built that evolve based on the unique attributes of each campaign.
Q: What’s the most effective way for marketers in this space to track Web attribution? What about the least effective way(s)?
A: The most effective way is to build models that minimize the chance of activity being incorrectly attributed back to media that couldn’t have possibly generated the activity being sourced. We believe that you have to look at everything from the local level up, starting with the geographic location of the Web-based transaction — and that’s how our models are built. We’ve also found that the models are only as effective as your understanding of each campaign’s time decay.
Q: What would you suggest marketers do today to maximize the efficacy of their Web attribution models?
A: First, I’d suggest they make sure they have a Web attribution model prior to launching their campaigns, so they can build highly accurate models based on an easier to read time decay than if they wait until campaigns are in rollout to try to identify it. Second, I’d suggest they have a model evolution strategy based on profiling the respondents as they occur. Lastly, I’d encourage them to make sure that whomever they are relying on to do their Web attribution is transparent in how they built the algorithm so that the marketer has the ability to help shape it.
Q: Do the best Web attribution solutions come via agency partners or a larger technology-based entity? Why?
A: I’m not sure that it’s an either/or situation. All agency partners are likely relying on some technology-based entity for their models’ performance. For example, we depend on both Rentrak and Nielsen for our attribution models. We also use Simmons and Personics data as key inputs of the attribution models we build.
Q: Is this issue “solvable” in the next three-to-five years?
A: Yes, because it has to be. With more than 75 percent of the attributable responses to a campaign occurring online today, Web attribution is no longer a “nice-to-have” but a “need-to-have” element of every campaign. You can’t make intelligent media buying decisions that have a high degree of predictability if you’re making those decisions based on less than 25 percent of the information available. The margin for error in a direct response campaign is so small these days that it’s imperative for a marketer to do everything possible to mitigate risk and guess work in order to succeed; accurate Web attribution is critical to both.
New Mobile Privacy Rules Proposed
By Doug McPherson
WASHINGTON — The Network Advertising Initiative (NAI), a group that promotes online privacy and freedom, gave its members a draft version of a code of conduct in late May regarding how to handle information collected from mobile apps.
NAI Executive Director Marc Groman says the draft rules focus on behavioral targeting, or serving ads based on data collected across more than one app. At press time, the organization expected to finalize its Mobile Application Code by June 30.
The proposed mobile rules require companies to let people opt out of receiving behaviorally targeted ads on mobile devices.
Even if people opt out, the proposed code lets ad networks continue to collect data “non-personally identifiable” data for some purposes like analytics, ad optimization and frequency capping. The NAI says data connected to a particular device — as opposed to a person — is “non-personally identifiable.”
But the NAI also proposes requiring companies to either discard that information, or else “de-identify” it (meaning that it’s no longer linkable to particular devices), as soon as the data is no longer needed.
The NAI’s proposal would require members to obtain opt-in consent before collecting personally identifiable information (names, addresses and phone numbers) and “sensitive” information, including financial account numbers, and precise information about medical conditions.
The draft rules also address information unique to mobile like geo-location data and “personal directory data” — which includes address books, photos or videos stored on devices and logs of phone calls. The NAI proposes that its members obtain opt-in consent before collecting either geo-location data or personal directory data.
The proposed new code also requires member companies to inform consumers about the details of cross-app advertising. Among other items, companies must inform consumers about the type of data collected, how it will be transferred to third parties, and how long it will be retained.
NAI membership includes 90 ad networks and other ad tech companies that collect data or serve ads. The umbrella group Digital Advertising Alliance — which includes the Interactive Advertising Bureau, Direct Marketing Association, Association of National Advertisers, and American Association of Advertising Agencies — also is expected to unveil mobile privacy guides soon.
Global Media Spending Expected to Rise Through 2017
NEW YORK — PricewaterhouseCoopers says global spending for media and entertainment will reach $2.2 trillion in 2017, compared with $1.6 trillion in 2012.
The consulting firm also predicts worldwide spending for entertainment will rise during the next five years as smartphone and tablet usage continues to grow and as Brazil, China and India further develop as media markets. Latin America is expected to become the fastest-growing region during the next five years, with 10.6 percent annual spending growth. Asia Pacific countries are expected to notch annual growth of 6.5 percent.
But the U.S. is expected to remain the largest media market, with spending increasing 4.8 percent annually to reach $632 billion in 2017, up from the nearly $500 billion spent last year.
Digital media will account for 43 percent of all media spending in the U.S. by 2017. That’s up from 31 percent of the total in 2012.
Joe Atkinson, a principal with PricewaterhouseCoopers’ entertainment and media practice, says the growth is going to be concentrated on digital media platforms and associated consumption.
The report, released in early June, says digital media is disrupting traditional television and movie companies, which are struggling to preserve their profit margins as Internet distribution splinters the audience and threatens to unravel the industry’s core business model: selling bundles of TV channels to paid subscribers.
“We are really seeing a shift in control from the media companies to the consumers,” Atkinson said. “The consumers have more choices, but we are seeing that they also are more confused by all of this choice.”
Ad revenue in the U.S. is expected to grow at an annual rate of 4.1 percent and reach $204 billion in 2017. Last year, U.S. ad revenue totaled $167 billion.
Internet advertising is expected to continue to outperform traditional outlets, with annual gains of nearly 14 percent. Spending for Internet access will climb about 11 percent each year. Major companies such as Time Warner and Comcast have been adding high-speed Internet subscribers to offset customer losses for their video packages.
Media analyst Craig Moffett says pay TV penetration is shrinking and programming costs are rising at an unsustainable growth rate. “To support revenue growth in the face of declining distribution, programmers are compelled to raise prices even faster. This further squeezes pay TV subscribership,” Moffett says.
DMA Fears Backlash From NSA Surveillance
NEW YORK — The revelations that the National Security Agency (NSA) has engaged in surveying U.S. citizens’ communications has the Direct Marketing Association (DMA) concerned that the backlash could lead to new online privacy laws restrictive to marketers.
Linda Woolley, president and CEO of the DMA, told MediaPost in mid-June that one of her worries is new restriction from lawmakers and says she hopes people don’t confuse how the ad industry draws on data with spying by the government. “If they are conflated, things could go very badly for marketers,” Woolley said.
In her blog, Woolley added, “The current regulatory environment is a test of our collective ability to bridge the language gap and improve understanding of the value of data-driven marketing. We cannot and let these mischaracterizations about data-driven marketing stand.”
Another recent DMA blog post warns that perceptions surrounding the government’s surveillance and monitoring programs could result in new restrictions for marketers. “Unless we correct these mischaracterizations about what data-driven marketers do and how we do it, we will get caught up in the Washington backlash against governmental intrusion,” wrote Rachel Thomas, DMA’s vice president of government affairs.
Thomas wrote that new restrictions on marketers wouldn’t affect whether the government can spy on people.
Wendy Davis, a writer with MediaPost, said Thomas is right “in that there’s probably no way to stop the government from collecting data without revising the Patriot Act. At the same time, enacting restrictions on data retention by private companies could make it a lot harder for the government to get hold of information. After all, if Web companies promptly deleted messages and other material from their servers, then the data wouldn’t be readily available to the NSA or any other authority.”
CBS Now Owns TV Guide Digital
NEW YORK — CBS Corp. is now the full owner of TV Guide Digital, including TVGuide.com and all TV Guide Mobile apps. CBS was reportedly drawn to data showing that most of TVGuide.com’s audience — as well as that of its apps — are under age 35.
Jim Lanzone, president of CBS Interactive, described TV Guide as “one of the most enduring and iconic brands in the world of television and video.” In March, CBS and Lionsgate each bought a 50-percent stake in TV Guide Digital from One Equity Partners for a reported $100 million. TVGuide.com presently attracts over 16.5 million monthly unique visitors, according to CBS, citing Omniture data. TV Guide Mobile apps have been downloaded more than 9 million times and are now responsible for more than 2.5 million average monthly visitors.
From CBS.com to CBSSports.com, CBS Interactive says roughly 270 million consumers visit its various properties on a monthly basis.
Earlier this year, DirecTV made an unsuccessful attempt to buy TVGuide.com, according to unconfirmed reports.
Under the direction of Lanzone, TVGuide.com and the TV Guide Mobile apps will now be folded into CBS Interactive’s Technology, Games and Lifestyle group, which already includes TV.com, CNET, GameSpot, Last.fm, MetroLyrics and Metacritic.