Repost of my Data Driven Thinking byline published by AdExchanger August 2015.
The good news: Mobile will be the freight train that drives the media industry.
The bad news: The lack of data availability and transparency will cost marketers billions of dollars.
Since the iPhone’s 2007 introduction, the media industry has deemed every year to be “The year of mobile.” It took longer than expected to mature, but desktop’s awkward little brother is about to dwarf big bro and steal his girlfriend along the way. Mobile surpassed desktop in consumption in 2014 and will surpass it in spending in 2016. eMarketer predicts mobile media will reach $65 billion by 2019, or 72% of digital spending.
As we move towards a “mobile-first” world, we need to address a very big problem: We still can’t accurately measure performance. The ability to target customers in new and innovative ways outpaces the ability to measure effectiveness of those tactics.
Mobile’s Measurement Problem
The digital media ecosystem was built on cookies to target, track and measure performance. Cookies are imperfect but good enough to develop accurate insights into customers’ journeys. Using cookie data to assemble and model conversion paths, marketers can use fractional or multi-touch attribution to optimize media campaigns much more effectively than with last-click metrics.
In mobile, third-party cookies are blocked on most devices and privacy regulations limit device tracking. Consequently, traditional ad servers are limited to reporting on last-click conversions where possible.
For brands seeking to drive app installs, mobile attribution companies like Kochava, Tune, Appsflyer and Apsalar can track the click that led to the download in Apple or Google stores. Some are working on post-click and post-view reports, but these will be of limited help to advertisers seeking actionable insights.
The lack of mobile data means advertisers cannot quantify reach and frequency across publishers. They also cannot measure performance across publishers via multi-touch attribution. The cost and complexity of device bridging further obfuscates user-level engagement.
Rays Of Light
Mobile data and measurement challenges won’t be solved overnight, but a convergence of factors point to a less opaque future. Here are my predictions:
1. Ad servers will adapt to device IDs
Conceptually, a device ID is not unlike a cookie ID, privacy issues notwithstanding, but it takes time and money to introduce a cookie-less ID system. Following the lead of Medialets, traditional ad servers will introduce their own anonymous IDs, instead of cookies, that map to probabilistic and deterministic device IDs. Like cookies, these IDs will allow them to log user level data that can feed fractional attribution models. We’ll probably see some early announcements before the end of year, with more to come in 2016.
2. Data unification will become readily available
To date, demand-side platforms, data management platforms, tag managers and data connectors have fixated on using data to help advertisers target, retarget, cross-sell and remarket. The same data that is used to drive revenue can also be used to connect user-level data for measurement purposes. Companies, such as Liveramp, Signal, Exelate and Mediamath, are already unifying data for analysis. More will follow.
3. Device bridging will become ubiquitous
To date, connecting devices across publishers has been a luxury afforded by the largest advertisers. In time that will change as wireless carriers, and possibly some publishers, offer device graphs exclusive of media and standalone vendors, such as Tapad and Crosswise, will reach economies of scale. At the same time, ad servers and data connectors will build or license device graphs and offer bridging as an extension of their service.
As ad delivery, data management and device bridging become more integrated (e.g. see announcement by Tapad and Medialets), costs will come down and advertisers of all sizes will be able to measure engagement across devices.
4. Mobile attribution vendors will be forced to evolve
As ad servers and data connectors incorporate device-level conversions in their data sets, including app installs, mobile attribution companies will have to expand their offerings or risk becoming redundant. Some may stick to their knitting and delve deeper into mobile analytics and data management. Others may pivot towards media and expand into desktop or addressable TV. Others may just be acquired. Regardless, it’s unlikely this category will remain as-is for much longer.
5. Last-touch attribution may finally go away.
We’ve been predicting the end of the click as a key performance indicator for years. But inertia, apathy and a continuous stream of shiny objects have allowed last-touch metrics to survive while brands and agencies fought other battles.
Now that we’ve tackled video, programmatic, social, native, viewability, fraud and HTML5, the new focus on insights and big data may finally drive the roaches away. The click will be hard to kill, but as we become smarter about measurement, it will become much less visible.
As the mobile data gaps are filled, the promise of cross-platform, cross-device, cross-channel attribution can become a practical reality for advertisers of all sizes. From a measurement perspective, our best days are still ahead. But as mentioned in the headline, getting there is going to be quite costly.