Many advertisers have a love-hate relationship with third-party tracking cookies. At best, cookies are a reliable way for marketing and advertising professionals to create targeted ad campaigns that help them reach particular audience segments based on ideal behavioral characteristics.
However, cookies crumble when applied to one of today’s digital advertising imperatives: measuring the cross-channel value of advertising. Today’s advertisers are all too aware of the need to go beyond direct, in-channel measurement of ad campaigns to include an understanding of their advertising’s cross-channel effects. Only by looking through both of these lenses can an advertiser can understand the actual value of his ads and optimize his ad spend accordingly.
Cookies, which are used to track individual purchase paths across the web, are the foundation upon which attribution schemes attempt to measure cross-channel ad value. The problem is that third-party cookies cannot track across devices---a fatal flaw in today’s multi-device world. With the increasing likelihood that any given person is browsing the Web on a tablet, looking through specific product catalogs on a mobile phone, and ultimately making a purchase on a laptop, cookies can’t keep up. In fact, Google’s ad sales chief recently reported that 90% of today's consumers shift seamlessly between devices to complete a task, with 500% more people simultaneously using multiple devices than were three years ago. Also, third-party cookies are themselves under increasing fire, with a growing portion of the browser market blocking them by default. Plus, rumors abound that Google may even be planning to replace cookies altogether.
The bottom line is that the purchase paths cookie-based attribution schemes deliver are fraught with potholes and pitfalls. It’s a risky proposition to base ad spend decisions on such a shaky foundation.
Reach for VPI Instead of Cookies
Instead of relying on incomplete cookie paths, marketers can and should instead measure value by using data that spans devices---data that, in other words, provides a solid foundation upon which to make sound ad bidding and buying decisions. Ad-level impression data, sitting reliably right at the fingertips of every digital advertiser, fits the bill. Impression data focuses on the number of people exposed to any one ad, rather than futilely trying to tie together one person’s journey through a variety of ads on different channels and devices. It’s a natural source for measuring how advertising in one channel, such as display, impacts sales through another channel like search, where consumers go with the intention of finding product info and buying.
By identifying the relationship between a particular display ad’s impression volume and sales through a particular search keyword, advertisers can determine the value of each ad, measured as value per impression (VPI). VPI is calculated through modeling at the atomic (individual ad and keyword) level that first determines whether a particular display ad’s impression volume is one of the top variables driving a particular keyword’s predicted performance and then measures the magnitude of the impact.
VPI analysis can be done for each and every display ad, as well as other brand-centric ads such as those on Facebook or Twitter. It delivers what cookie-based attribution cannot: a meaningful and actionable understanding of a particular ad’s cross-channel value across devices. It gives advertisers a metric that can be applied across all ads in their mix to help them understand which ads are truly valuable... and which are not. Moreover, it can be translated directly into buying and bidding terms, guiding advertisers on precisely how much to invest in each ad to optimize their spend for maximum financial return across channels.
When measuring cross-channel value, cookies have been leading marketers down the wrong path, one that leads to an incomplete, broken set of data upon which to base ad investment decisions. The good news is that VPI analysis can provide a complete view of ad value across devices and channels, which in turn enables smarter ad investment and better-than-ever returns.