What you need to know:

• Click based attribution marketing has hoodwinked smart people for years, WW Director of Marketing Nicole McInnes and Pet Circle CMO Jon Wild admit, but it’s time to leave it where it belongs: in the past.
• Building a media mix model and employing econometric techniques is the third step of eight in Atomic212 bosses James Dixon and Claire Fenner’s new book, How to do Effective Media.

A few years ago, WW marketing director Nicole McInnes joined a digital business that was only running ads on search.

“They were a growth business,” she said. “I said, ‘I know search has got a really good cost per acquisition, but if you don’t run something else, nothing’s going to happen’. They didn’t know that. They thought it was a really efficient tool, it spat out a really good metric. These flawed metrics make people who don’t understand make really bad decisions for businesses.”

She turned a business-wide decline into growth within months, but she uses the example to illustrate how dodgy metrics can undermine and an entire business. Search CPAs were cheap, but that didn’t make them effective.

“I know there are a lot of digital zealots out there, but TV in Australia still works its socks off,” she said. “That’s shown by the fact that its avails are always really low.”

The flaws of last click attribution and click through are widely documented. Jon Wild, CMO at online pureplay Pet Circle, said they filled the vacuum and are deterministic, which financial teams love. 

“Marketers hadn't actually built true measurement models, weren't thinking about it through thoroughly, and weren't thinking about incrementality, interactive effects and all the other variables,” he said.

“It's basically an absolute binary outcome. And businesses like that. Finance like that. They like to know 'if I spend this, I'll get this back'. So it's simple in its nature and generally poor in its application. It's not the truth, it's an index. It gives you something to benchmark.”

Building a media mix model, and using econometric modelling, are two suggestions from Atomic212’s James Dixon and Claire Fenner in a new book, How to do Effective Media.

Wild says media mix models are seriously useful, but they’re still developing into what marketers need: real time matrixes of media effectiveness.

“You need to be able to optimise in much the same way you do with click-based attribution systems,” he said. “Now, with AI modelling, the cloud, and all that stuff, this is now becoming a possibility… The real world is not a set of binary inputs.”
Dixon and Fenner say marketers should bring this data and models in house – but find that conversation difficult.

“It’s quite uncomfortable for marketers to go: ‘Everything we’ve been talking about for the past five to 10 years hasn’t been the true picture, and we’re going to completely throw that out and change it’,” Fenner said.

“But if you’re just looking at digital reporting, there could actually be a significant influence of other channels outside of that digital ecosystem, such as TV.” 

This article is one of a series adapted from Mi3's commercial Market Voice podcasts exploring the eight steps to building an effective media system, based on Claire Fenner and James Dixon's book. Listen to the podcasts here and here.