This is a special guest column from Foursquare’s president Steven Rosenblatt, who will be joining us as a speaker in three weeks at Street Fight Summit 2016 in New York. Join him and hundreds of other local luminaries on October 25th. Click here for more info.
To put it simply: old media mix and measurement models are broken.
It used to be the case that marketers would run ad campaigns across traditional media channels and months would pass before receiving any signal back regarding their success. Holiday ads for jewelry, cars, clothing or toys would run in Q4 and by the following spring, each respective marketer would find out whether or not they came within swinging distance of their sales goals and other KPIs. Marketers would adapt, refine and repeat.
E-commerce changed much of that — finally throwing open the doors of instant gratification for marketers. Did ads drive clicks? Did clicks drive spending? All that (and more) was resolved thanks to cookies and sophisticated tracking of online shoppers.
But knowing what we do about real world commerce — that it still makes up 93% of consumer spending — neither the old media mix models nor online measurement suffice. With old media mix models, by the time data comes back, months have passed and the world has changed, and online measurement only captures online spending, a small fraction of the pie.
The solution lies within an unexpected source: mobile phones. Consumers take their phones everywhere, and new advances in advertising technology have made strides that finally allow marketers to take advantage of this and better understand how online ads impact offline behavior. Here are five ways that every marketer needs to rethink marketing measurement in order to better reach their consumer base:
1. Understand that where people go is the best indicator of who they are.
Marketers can now see where consumers actually go. Geolocation technology can reveal the cafés where consumers buy their coffee, the bars where they indulge in happy hours and the stores they rely upon to feed and clothe their families. Where actual visits are occurring in the real world is the number one signal of consumer intent.
While it can still be helpful for marketers to understand who follows their brand on social media or who has signed up for email notifications, visits to brick-and-mortar locations speak much louder.
2. Make real-time decisions based on real-time data.
Thanks to the ubiquity of mobile devices, location data enables marketers to understand the real-time foot traffic impact of their marketing campaigns. Foursquare launched its own live, Attribution dashboard earlier this summer to facilitate these daily learnings for marketers. This is one of the biggest shifts we have seen in measurement technology in recent years and yet, many overlook these capabilities.
Every marketer should take advantage of this by closely tracking the offline impact of their digital campaigns and optimizing their ads as they go. Is one market responding better to digital ads than another? Is creative resonating with certain age groups? Are publishing partners performing at the level they had promised? With real-time offline measurement, suddenly everything is up for grabs.
3. If you don’t understand where the data is coming from, scrap it.
Real world, real-time measurement can be a dream for marketers, but without transparency, it can be a real waste.
Marketers should hold their data and measurement providers accountable for every detail about the data and have a clean and clear understanding of where it is coming from and who it is representative of. Without transparency, marketers cannot possibly gauge how accurate any measurement tools are.
4. Be vigilant about accuracy.
A lot of inaccurate data is misrepresented in the mobile measurement space as valid. We know that nearly 80% of location data in the bidstream is inaccurate because we check it against first-party data from our consumer apps, Foursquare and Swarm. Our own users have helped us to develop a ground truth and deep understanding of location that helps us validate data sources for our partners.
Another note on accuracy: more data does not mean better data. While some companies will claim to see upwards of 1,000 daily place visits per person, Foursquare’s data shows that consumers visit an average of about 5 places daily. So where do these data providers get such high numbers from? Less refined data in the space reflects stores and venues that consumers are passing by, not stopping at, and surely plenty of other unrefined noise. Without accurate stop detection technology, it’s nearly impossible for these companies to understand consumer intent, leaving marketers with a blurred vision of consumer behavior.
Be skeptical of any numbers that simply do not make sense, like companies claiming they see more mobile devices than actually exist in the US.
5. Choose your partners wisely.
Marketers should not settle when it comes to selecting a measurement partner. To execute on and take advantage of new metrics, they need to align themselves with data partners that are collaborative, transparent, accurate and leading the way in measurement.
Legacy media mix and measurement models are due for an overhaul. Marketers need to come around on the importance of real-time, location measurement tools and incorporate them into their models quickly, or they’ll be outpaced by brands that do so with speed and accuracy.
Steven Rosenblatt is president of Foursquare. Join him and hundreds of other top local industry executives on October 25th at Street Fight Summit in New York. More info here.