One of the great ironies about the mobile revolution has been that while digital ad impressions are easy to track, using that data to determine mobile ads’ efficacy has proven a challenge. Many brand marketers are still left wondering how much retail lift the ads actually achieve — and as a result they are perhaps a little more conservative with their budgets than if they could see the direct relationship. A number of companies in the local space have spent the last couple of years working on this attribution problem, and some believe their efforts are starting to come to fruition.
Empyr‘s system of attribution connects advertisers with publishers, and uses data from Visa, Mastercard and AmEx to measure purchases that follow ad impressions. The company collects a pay-per-sale fee on all transactions that are driven by the ads.
Street Fight recently caught up with Empyr’s CEO and Founder Jon Carder, who will be a speaker at Street Fight Summit West on June 7th in San Francisco, to talk about the challenges involved in online-to-offline attribution and how overcoming those challenges can shore up local advertising.
Explain a bit about how Empyr grew out of your work at Mogl and where your focus is these days.
When we set out to build Mogl five years ago we set out to be the world’s best restaurant rewards program. Out of that experience, we discovered card-linked offers, and at the time the technology for card-linked offers kind of sucked. It was like you could attach an offer to a credit card or debit card but you had to work through merchant processors to do the tracking and it had this 3-day delay, and it was ultimately a pretty crappy user experience. But over the last three years we’ve ended up partnering directly with Visa, Mastercard, and Amex, and now we can track offline transactions in seconds, and that is a pretty cool shift.
What we realized is card-linked offers are much more powerful than just a simple restaurant rewards program. This is a key ingredient to closing the loop of online-to-offline commerce. So we realized, let’s open up this technology and let any publisher access it and let any advertiser access it, and that’s really where the concept for Empyr came from —taking Mogl technology that we’d sort of built or stumbled upon and opening it up for anyone to use.
By publishers I mean anyone with a website or app that has a lot of consumers that are using it. You can now give consumers this super frictionless way to earn cash back at tons of offline business. It’s really easy, you just link up the card once on any website or app and then you just walk into the business and pay and, voilà, money appears back on your credit or debit card.
On the advertiser side, anybody from a restaurant to a grocery story to a gas station — anybody with those brick-and-mortar locations — can now advertise on all of these publisher websites and apps, and instead of buying impressions or clicks, they can buy sales, so they only pay when somebody walks in and buys from them.
Why is online-offline attribution so important to the local industry?
I think it’s really the missing piece to local advertisers’ being able to advertise online. Right now if you’re a local advertiser, you’re buying impressions, you’re buying clicks, you can guess how much revenue that’s generating, but you don’t really know 100 percent, so it’s impossible to judge your ROI and therefore attrition rates are large.
We have high-single digit, in some cases low double-digit attrition every month from online advertising packages whether it’s MPO or SPM or display, attrition rates are awful. When you can actually prove attribution and you can show a local advertiser how much revenue they’re generating, we’re seeing attrition in the 2 percent range, 3 percent range. It just gets incredibly better because there’s proof of how well the advertising’s working. So it’s really the missing piece. I think it bridges the gap or closes the loop.
Do you think establishing attribution links will be able to activate more local advertisers who are currently sitting on the sidelines because they see online and mobile ads as too “risky?”
Absolutely. It solves two problems: It gets more local advertisers involved in online marketing and it keeps them involved for longer periods of time. We’ve seen incredible results selling a pay-per-sale program to local businesses. Some of the stats are 25 percent conversion ratios on a cold call to a local business. They’ve never heard of the product before, they’ve never heard of us before, they sit through a pitch, and 25 percent sign up.
And we’re working with companies like LivingSocial who’ve been selling daily deals, which is also a sort of pay-per-sale program. But it’s just a more expensive pay-per-sale program when you’re giving out a 50-percent discount plus another 25 percent on top of that, so LivingSocial sellers have started going out and selling the Empyr program and have been blowing their numbers out of the water. So it’s definitely going to be bringing on a massive amount of advertisers who are sitting on the sidelines, again, because it’s less risky.
And it’s also easier to understand. For a local advertiser, Google is fairly complex. What keywords do I bid on? How much does it cost? How much should I bid? What page am I on? Why does that matter? They’re coming to my website. Do I need to have something on my website? Do i need to collect their email address. It’s just all very complicated, same thing with SEO, same thing with really a lot of online marketing programs.
Whereas this is quite simple. It says, “Hey, restaurant owner, we’re going to sign you up to this pay-per-sale program. You’re going to give a 10-percent discount, and then you’re going to pay us 10 percent.” Something simple like that — we usually provide a simple flat. So they don’t have to do anything. Once they sign up, there’s no managing of a keyword campaign. There’s no strategy involved.
What’s the most difficult part of establishing attribution? And who else is in your space? Are there any other creative solutions that have been proposed to tackle that problem?
I think there are some other creative solutions. [Among] other companies that are doing online-to-offline for attribution, a lot of them are collecting data from multiple sources and are trying to correlate it all together. So I think there are some pretty cool data solutions out there that don’t involve bringing an advertiser on and a consumer on. They can just track it. It’s not 100 percent accurate but it’s getting better.
The problem is the costs of those services are prohibitive to the local advertiser. Most of those data solutions are for national advertisers, so guys like Home Depot who are going to run a big online campaign can take tens of thousands of dollars to see how much revenue that most likely generated. But if you’re a local advertiser, it’s really hard to find data solutions. Plus, a lot of these local advertisers don’t have complex marketing departments who can use that data to correlate exactly what their return on investment is. So I think the offerings are pretty good with national advertisers and are getting better because there’s more data, but i think with local advertisers there’s a limited set of solutions.
Joseph Zappa is Street Fight’s news editor. This interview has been edited for length and clarity.
Hear more from Jon Carder at Street Fight Summit West on June 7th in San Francisco. Click on the icon below for tickets!