how to achieve accountability in internet advertising

how to achieve accountability in internet advertising

The internet brought with it promise of a new kind of media for advertisers: one that would be transparent, traceable, and accountable for all advertising expenditure. Theoretically, ad dollars would be translated to clicks, clicks would then be tracked down to conversions, sales , and even subsequent dollar value of acquired clients -- closing the spend-return loop to achieve a full ROI picture.

However, 15 years past the dawn of the internet, during which time huge technological advancements have taken place, we are still far away from fully realizing this vision. Why?

In this article, I will outline some of the main complications, and propose directions advertisers may consider to get closer to the original promise, and to advertising optimization.

Main challenges

1. Attribution. Which traffic source is to be credited for a conversion? Oftentimes, a user is converted after arriving multiple times at the website via diverse sources. Should the "last click" be fully credited as the source, disregarding the prior ones? Why not the first click? Or split the credit between them in this way or other? How far back should clicks be considered as part of the "click stream to conversion"?
   
   These are not easy questions to answer, and they strongly depend on specific business characteristics. Add to the equation a multitude of technical variables related to the tracking mechanisms themselves. The core issue of attributing credit to click sources is all but straightforward.
   
2. Granularity. As new advertising formats continually roll out and are refined (especially by Google) which is the "granular unit" to be attributed a success or failure and optimized accordingly? Is it a keyword, a text ad or a landing page? Is it an ad placement or banner creative?
   
   The answer is, of course, their combinations. However, analysis of this multi-dimensional environment creates a massive dataset that requires a far more complex decision-making process, and a highly powerful analysis tool and staff.
   
3. Untracked influences. Offline and online advertising do not live separately. People exposed to brands offline will interact more with the brand online, and vise versa. But the available tracking tools tell us a partial and disparate story: an online transaction generated via a certain tracked click, or a transaction at the brick and mortar cashier that just occurred.
   
   Moreover, online display advertising and social media may influence brand perception and attraction, which would not translate directly into incoming clicks, and therefore are not tracked. However, they could have influence on increased brand related searches, increased CTRs for the brand ads, and ultimately more conversions. We have seen multiple cases during periods of intense brand-related advertising activity where conversions have increased significantly. When brand advertising slows, products return to lower interest and conversion levels for branded clicks.
   
4. Lifetime client value considerations. Not all clients were born equal, as every salesperson knows. However, most direct response advertisers work by a "cost per client acquisition" (CPA) target. This means that they are willing to pay up to a certain threshold for acquiring a single client.
   
   CPA value is usually derived by predictions of lifetime client value. However, that client lifetime value may differ greatly from theme to theme, country to country, and a host of other parameters. Erroneous campaign management decisions could be made by relying too much on across-the-board CPA targets.