MEASUREMENT DIVIDE INSIGHTS

Transcription

1 T H E FA C E B O O K MEASUREMENT DIVIDE R A K U T E N M A R K E T I N G INSIGHTS

2 MEASUREMENT DISCREPANCIES Attributable revenue from ad campaigns might be higher than advertisers' web analytics lead them to believe. Rakuten Marketing Insights analysis of client performance data revealed discrepancies between conversion tracking and web analytics that are costing advertisers insight into 192% more attributable revenue and higher return on ad spend for mobile campaigns. While the discrepancies between conversion tracking and web analytics for mobile are significant, they are minimal for desktop: There is on average a 3% discrepancy for attributable revenue between conversion tracking and web analytics. Despite the prevailing theory that cross-device and the inherent challenges associated with cross-device measurement accounts for this disproportionately high discrepancy on mobile, this is not the case. In fact, the cross-device campaigns analyzed revealed that attributable revenue only comprised on average 5.6% of the total revenue generated across mobile-only, desktop-only and cross-device campaigns, and as little as 2.4% for one retailer in the study. Advertisers invest their marketing budgets across channels and strategies that yield the highest returns. The discrepancies between conversion tracking and advertisers web analytics are not trivial. For one client included in the study, the attributable revenue from conversion tracking could be as high as $4.7 million annually, while their web analytics would report $1.9 million. Many advertisers apply a 2x 3x multiplier to their web analytics attributable mobile revenue to estimate a more realistic return on investment for their mobile campaigns. The advertisers relying solely on web analytics are making decisions based on data that doesn t accurately reflect that campaigns are driving more revenue than they think. conversion tracking is inconsistent with what advertisers see in their web analytics for many reasons. Although conversion tracking paints a more comprehensive picture of performance, there are technological challenges that prevent conversion tracking on from functioning correctly. This discrepancy means there are additional conversions happening that are simply not recorded anywhere. The issues surrounding measurement are abundant and complex the following summarizes some of the challenges advertisers face. 2

3 Measuring post-click and post-impression conversions: Post-click conversions are tracked differently by conversion tracking than in web analytics: conversion tracking captures all post-click conversions (we measured post-click conversions within a 24-hour window), while web analytics typically only captures last-click conversions. The same holds true for post-impression conversions: captures all post-impression conversions within a 24-hour window, and web analytics simply cannot capture these conversions from viewed inventory. Cross-device consumer identification & measurement: Web analytics platforms that rely on cookies cannot accurately track cross-device conversions because of the inherent challenges with identifying consumers across devices. Coupled with the consumer s ability to block cookies on desktop and mobile, it becomes nearly impossible to measure conversions and attributable revenue for cross-device campaigns. doesn t solely rely on cookies and can measure conversions as consumers log into the platform across devices. platforms & cookies: Social advertising experts and advertisers agree that some of the discrepancy can be attributed to certain mobile operating systems and Internet browser combinations blocking third-party cookies. Depending on how the third-party measurement system is configured, it will appear to the browser as a third-party cookie which will not be tracked, or a first-party cookie which will be tracked. 3

4 MOBILE IS THE CLEAR WINNER FOR PERFORMANCE The other major trend that emerged from this study is that mobile outperforms desktop, and advertisers web analytics data is not reflecting this trend accurately. This should come as no surprise has 1.57 billion mobile users, and 1.03 billion of them access daily. Among the user base, 54% access the platform exclusively from mobile. advertising has historically experienced challenges, but the writing is on the wall advertisers cannot shy away from investing in mobile if they want to reach and drive revenue from social-savvy mobile consumers. Analyzing conversion tracking data made it clear that mobile is the undisputed winner over desktop when evaluating campaign performance. The click-through rate for mobile ads was on average 63% higher than desktop, although the conversion rate was on average 33% lower. However, when you factor in that cost-per-click for mobile is 70% lower than desktop, return on ad spend for mobile is 72% higher than desktop. AVERAGE FACEBOOK AD ROAS MOBILE VS DESKTOP 63 % HIGHER 33 % 70 % MOBILE ROAS 72 % HIGHER THAN DESKTOP CTR CVR CPC 4

5 Analyzing conversion tracking data for each of the individual clients in this study revealed that the same patterns from the aggregate data hold true at the individual client level: a clearly demonstrated higher click-through rate, lower conversion rate, much lower cost-per-click and therefore higher return on ad spend for mobile, when compared to desktop. In addition, the reported attributable revenue for each advertiser was substantially higher in conversion tracking than what was reported in each advertiser s web analytics. CLIENT ONE Discrepancy: Attributable revenue on mobile is 58% lower in web CLIENT 1 analytics than in conversion tracking, while we saw an attributable revenue discrepancy on desktop of 8% between and web analytics. conversion tracking highlights: 8 % 58 % Click-though rate on mobile is 77% higher than desktop. Conversion rate on mobile is 8% lower than desktop. Cost-per-click is 68% higher on desktop than on mobile (or 68% lower on mobile than on desktop). Therefore, mobile achieves a 69% higher return on ad spend than desktop. Revenue* Revenue 5

6 CLIENT TWO Discrepancy: Attributable revenue on mobile is 70% lower in web CLIENT 2 analytics than in conversion tracking, while we saw an attributable revenue discrepancy on desktop of 8% between 8 % and web analytics. 70 % conversion tracking highlights: Click-though rate on mobile is 49.4% higher than desktop Conversion rate on mobile is 46% lower than desktop. Cost-per-click is 87% higher on desktop than on mobile (or 87% lower on mobile than on desktop). Therefore, mobile achieves a 64% higher return on ad spend than desktop. Revenue* Revenue CLIENT THREE CLIENT 3 Discrepancy: Attributable revenue on mobile is 68% lower in web 15 % analytics than in conversion tracking, while attributable revenue on desktop is only 15% higher in conversion tracking than on web analytics. 68 % conversion tracking highlights: Click-though rate on mobile is 64 % higher than desktop. Conversion rate on mobile is 6.6% lower than desktop. Cost-per-click is 56% higher on desktop than on mobile (or 56% lower on mobile than on desktop). Therefore, mobile achieves a 122% higher return on ad spend than desktop. Revenue* Revenue * It is important to note that conversion data is reported with 1-day post-click attribution while web analytics report with 30-day last-click attribution, which can lead to discrepancies. 6

7 The data and performance analysis creates some interesting insights: consumers are more likely to click on a ad on mobile but less likely to convert. Although consumers are converting more and more on their mobile devices, the conversions rates will likely continue to go down, due to the challenge of purchasing on small screens. The substantially lower cost-per-click drives an overall higher return on ad spend on mobile. If the fact that mobile is a critical part of the consumer journey isn t enough to make advertisers invest heavily in reaching consumers on social media on mobile devices, higher return on ad spend and substantial attributable revenue should be. We are not just finding that mobile outperforms desktop we are finding performance that should make advertisers pause and rethink their strategy when considering the efficacy and budget allocation towards mobile advertising. ADVICE TO ADVERTISERS Consider taking a systematic approach to ascertain how advertising on mobile is performing, leveraging the following process: 1. CREATE A MULTIPLIER: Measure the difference in mobile revenue between conversion tracking and your web analytics tool. Reported Revenue Reported Revenue We will use $180K as mobile revenue and $100K as mobile revenue reported by your web analytics tool. $180k/$100k= 1.8 For this example, the multiplier is 1.8. If working with fewer than thirty days of campaign data use an benchmark multiple of (2.5x), a multiplier we recommend to our clients based on working with numerous advertisers and managing their advertising campaigns. 7

8 2. ACCURATELY ATTRIBUTE MOBILE REVENUE: Multiply the mobile revenue reported by your web analytics tool by the multiplier created to get your net attributable mobile revenue. Revenue Reported by Tool x = Net Attributable Revenue $100k x 1.8 = $180k This number matches the original reported mobile revenue to show the multiplier bridges that gap. 3. DE-DUPE THE REVENUE USING RELIABLE DESKTOP DISCREPANCY: measures performance using a post-click revenue model and web analytics tools typically measure attributable revenue based on last-click performance. This discrepancy must be accounted for by normalizing the data. This can be done by using the revenue discrepancy between attributable revenue on desktop and that of the marketer s attribution software as a benchmark. For this example, we will use $120k in desktop revenue reported and $100k in desktop revenue reported by web analytics. revenue reported - Revenue Reported by Tool Revenue Reported by Tool = Discrepancy Net Attributable Revenue - ( Net Attributable Revenue x Discrepancy ) = Accurate Revenue ($120k - $100k)/$100k = 20%. Then discount the mobile multiplier revenue by that desktop discrepancy. $180k ($180k * 20%) = $144k. 8

9 METHODOLOGY: Rakuten Marketing Insights analysis of client performance across advertising on desktop and mobile for a one-month period. Data analyzed was from conversion tracking and advertisers web analytics reporting across Adobe Analytics, Coremetrics and Google Analytics. The three clients included in the study spend between $350,000 and $725,000 annually to advertise with. SOURCES: CONTACT US Rakuten Marketing rm-letstalk@mail.rakuten.com