Jason is the co-founder and CEO of tvScientific, the first performance marketing platform for ConnectedTV (CTV).
Over the last 20 years, we have experienced an upheaval and complete retooling of the advertising industrial complex. It started with paid search in 1998, followed by programmatic advertising, social media platforms and, most recently, connected TV (CTV). Each wave of innovation was driven by rapidly changing consumer behavior, and each created entirely new economies propelled by companies that embraced these new mediums early on to grow their businesses. Millions of e-commerce and D2C businesses were launched via search and social, and countless more are likely to launch on CTV.
In general, early adopters have captured a massive first-mover advantage. In paid search, e-commerce businesses that quickly built tools to understand the ROI of paid click traffic could adjust and scale their search engine marketing efforts on an ROI-positive basis. Many grew rapidly, fueled by the relatively low cost of media in those early days. In social media, early adopter D2C marketers who quickly mastered the nuances of Facebook’s platform (e.g., the need for fresh creative and Facebook’s lookalike audience capability) gained a huge leg up while building critical competencies.
Now we are in the nascent stage of another new massive growth channel, spawned by the rapid migration of consumers from linear to connected TVs. Like paid search, social and programmatic, this new channel comes with unique rules and requires evolved thinking. Early movers stand to gain significant competitive advantages and increased market share.
So, what’s the key to success? In order to be successful in CTV, companies must come to terms with one simple but profound fact: Consumers do not click on TV ads. Consumers see an ad on TV and take action via a second screen — most often a laptop, smartphone or tablet. Thus, marketers must avoid being trapped by last-click channels that benefit — artificially and in a self-serving way — by taking credit for consumer actions that were clearly inspired by a TV ad.
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These are not the droids you are looking for.
Google and Facebook love for marketers to look only at their dashboards and assign last-click credit to them. This “Last Click Jedi Mind Trick” has deluded our industry for too long, and the stakes have only gotten higher with CTV. Applying last-click attribution here would: a) doom all businesses to unnecessary failure in the channel and b) ignore the fundamental truth that TV is clearly, obviously, self-evidently effective in terms of driving consumer attention and action.
If not last click, what’s a marketer to do?
Companies have had access to advanced attribution tools for decades, but most growth marketers don’t use them because last click is so deeply ingrained in our thinking thanks to Google and Facebook. But let’s face it, last-click measurement is as simplistic as kindergarten math, and it becomes the default for lots of companies that don’t have the resources or expertise to apply more rigor. Marketers don’t get fired for using Google and Facebook, and many simply hide behind them.
What does Google think about all of this?
Driven by pressure from sophisticated advertisers, even Google has recently unveiled the deprecation of the last-click attribution model within the Google Ads Platform. Google now acknowledges that multiple marketing channels deserve credit for driving outcomes and that upstream channels play a critical role in driving action. But there’s a catch: Google’s new attribution method is fundamentally biased toward Google by sharing multi-touch credit only within its own walled garden of media channels.
What are the most proven approaches to multi-touch attribution?
There are several well-established science-based methodologies for understanding multi-touch attribution:
Linear Distribution, in which each impression is given an equal share of the credit for driving the conversion. This is based on the premise that every impression plays a role in the conversion.
Time-Decay Distribution, in which a decreasing portion of the credit is assigned the further away from the conversion an impression occurred.
First-Touch Distribution, in which the first impression gets all the credit for driving the customer’s motivation or awareness.
Data-Driven Distribution, in which credit for the conversion is distributed based on past data for this conversion action.
Last-Touch Distribution, in which the last impression prior to conversion is given 100% credit for the conversion.
What attribution approach works best for CTV?
Since the 1950s, game theory has been applied to problems of both competitive and cooperative games. An advertising campaign is a classic example of a cooperative game in which each element of the campaign works together to drive a single, beneficial outcome — for example, a sale or action. In cooperative games, the American mathematician and Nobel Prize-winning economist Lloyd Shapley proved in his seminal 1953 paper that there is only one fair and independent way to assign credit — and this mechanism, at the heart of the data-driven attribution model, is known as the Shapley Value.
The data-driven model is the most mathematically valid method to assign a weighting to multiple contributors to an outcome, and they underpin what many enlightened marketers think of as a multiple-impression sale.
Trust, but verify with incrementality testing.
Regardless of the multi-touch approach, all marketers should verify the results for each channel via incrementality testing. The reason is simple: Incrementality testing controls for all the ad exposures in the customer’s journey, and, when properly applied, will identify a channel’s independent contribution to ROAS.
So, what is the actionable takeaway from all of this?
Put simply, performance marketers are at a crossroads. The performance of social channels is degrading for a variety of reasons, and search does not offer incremental scale. That leaves CTV as the most measurable, scalable and unexplored frontier for growth marketers (109 million U.S. households now view streaming services).
TV is the most impactful media format in history, and it remains the most important screen in consumers’ homes. To fully leverage the opportunity, growth marketers must apply more advanced measurement approaches recognizing that consumers do not click on TVs, and likely never will. The tools exist and the stakes are enormous.
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Author: Jason Fairchild, Forbes Councils Member