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Don’t track clicks, measure what matters

While APAC is poised to be the world’s leading digital advertising market this year, overtaking the US in terms of ad spend, there is a growing debate on whether brands are accurately measuring the impact of and maximising their digital ad spend.

Marketing spoke with Steven Feiner, ex-Googler and CEO and founder at startup, A Better Florist, on the challenges of understanding digital marketing performance and focusing on increasing conversions.

Feiner founded A Better Florist last year in Singapore with the aim of making it much simpler and quicker to purchase flowers online and with an emphasis on making processes data-driven. He said many companies have become obsessed with tracking anything and everything and being 100% accurate.

“First things first, it doesn’t matter how correct your tracking is if nobody cares. There needs to be broad-based education and different stakeholders need to be in the same room,” he said.

He emphasised that it is an organisational change issue and that the main goal is to be directionally right at the start.

If your boss doesn’t understand what’s going on now and you’ve complicated it tremendously for them how is that going to go?

While the level of digital capability in this region is improving every day, Feiner says that we’re not there yet especially in very large organisations and the key is to keep it very simple at the start.

Don’t put the cart before the horse.

Feiner said with all the tools out there it’s easy to forget that you need to understand exactly what the variables are for your business, exactly what you can track and exactly what you can’t track. He said people often track for the sake of it and the biggest offender is the click.

“People shouldn’t track clicks any more. We would never track clicks. A click or an impression or a view isn’t a metric that matters,” he said. Feiner argued that the fundamental metric that matters for a business is a conversion but there are other smaller metrics that make it up along the customer journey.

[More from Feiner and other senior digital marketers at Digital Performance Marketing 2016Join us on 18 August for a day of insightful presentations, case studies and discussion on programmatic and performance marketing challenges and opportunities.]

“You have to have a set goal around attribution to compare every single marketing channel and make the best decisions,” he said. A Better Florist uses Mixpanel to track each conversion and platform in real time.

In terms of attribution models, A Better Florist, has decided to focus on the U-Shaped model which means they give sufficient weight to the first and last interaction and then less weight to the middle interactions.

Feiner said U-Shaped is the best in terms of a broad-based ecommerce approach but that many organisations still use outdated first and last click models simply because it takes less effort.

This is a short term view “so there is a big issue in terms of retention and lifetime value.”

“If we are focused only on something like first click or last click then we are only telling less than half the story,” he said.

If I only sold one bouquet to a person that would be an utter failure. I’m interested in how that customer came and keeping them for the long run.

This is where working towards understanding customer lifetime value (CLTV) is significant and it helps A Better Florist understand how much to pay to acquire each customer.

“There is no shortage of users you can acquire for a certain price point. Ultimately it’s understanding how much you can pay for a user based on your own economics. We will only acquire a customer if our LTV is high enough to pay for that customer.”

Feiner claimed companies that seem to be doing this best are predominantly online businesses. He cited the Rocket Group of companies in particular, the Zalora and Lazada brands as leading the charge in understanding their customers and what to measure both online and offline.

For Feiner, once you get the base set and organisational buy-in on what needs to be measured you can grow gradually based on your understanding of how your variables and customers fit into the capabilities of online measurement.

“At A Better Florist, we have the benefit of being a smaller organisation where we’re similar and there’s more homogeinity in terms of digital capabilities. It becomes sufficiently easier to talk of the next steps.”

“It’s a question of unlocking the value. First, you must understand exactly what that value means in the long run. We’re focused on profitability but for us we will only grow in the way we handle attribution and analytics allows us to grow.”

Catch Feiner at Digital Performance Marketing 2016 on 18 August at the Four Seasons Singapore where he will share more on attribution models and working towards customer lifetime retention online as well as other leading digital marketers from brands including: Google, Unilever, Cerebos and Carousell.

To book your seats for the conference contact Bernadine Reyla at bernadiner@marketing-interactive.com or call +65 6423 0329, +65 8782 1974

For sponsorship opportunities contact Johnathan Tiang at johnathant@marketing-interactive.com or call +65 6423 0329.

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