The rise of programmatic vs the challenge of attribution
Marius Smyth, Managing Director EMEA, AdRoll writes about the latest changes and challenges in the landscape of programmatic and attribution.
Programmatic advertising: it’s easy to forget just how new it really is. The earliest seeds of this industry were planted less than a decade ago and, in recent years, mainstream businesses and media have been the primary adopters. As in all industries driven by disruptive technology, programmatic advertising has changed quickly, bringing with it challenges, such as how marketers should be tackling attribution. We recently surveyed more than 200 UK marketers across industries for AdRoll’s State of the Industry UK 2016 report, to discover how businesses are adopting the new marketing opportunities brought forth by programmatic advertising and also overcoming any obstacles they may face.
Mobile – room for growth
Our report finds that UK marketers are thinking mobile first this year, despite persistent challenges. 54% of marketers are already retargeting on mobile. Furthermore, 58% plan to increase their mobile-advertising budget in 2016, which speaks to the importance of reaching people where they’re spending more and more time: on mobile devices. But our report also uncovered some of the particular hurdles marketers are still facing. For example, 25% of those surveyed still don’t have a mobile app and 14% still don’t have a mobile-optimised site. Some UK marketers feel that consumers still don't convert on mobile, with 37% saying that it’s mobile advertising’s biggest stumbling block, highlighting the distance the industry still needs to go to before mobile reaches its full marketing potential. Hopefully, further investment in mobile budgets, as hinted at by our results, will deliver marketers the answers they are looking for.
Attribution – a challenge to overcome
While mobile retargeting remains a top priority for UK marketers, attribution is hot on its heels as an issue that needs to be resolved. As we all know, one of the most difficult — and crucial — tasks for a B2B or B2C marketer is trying to solve the attribution riddle. Just how much influence did a piece of marketing activity have on that successful conversion? The report finds that this continues to be at the front of marketers’ minds, with 75% of those surveyed asserting that solving attribution is critical or very important to success in marketing. Although many marketers have now adopted an attribution model that tracks multiple customer touch points, there are still 17% who turn to a single-click method.
Disconcertingly, the report found that 39% of marketers are now attributing only 10–24% of conversions to view-throughs while the number of marketers attributing over 50% of their conversions to view-throughs is a mere 9%. This further highlights that UK marketers do not fully understand the process of attribution in marketing campaigns, perhaps because the ‘right’ way to approach it is becoming increasingly complex. Marketers are finding ever more-sophisticated approaches to programmatic advertising but the unintended consequence of these clever solutions is fragmentation across devices and platforms, making it trickier to measure campaign success.
The good news is this typically taboo topic is finally coming into the open and becoming more important than ever, with our report finding 96% of marketers acknowledged the importance of solving the attribution conundrum. Marketers need to fully embrace attribution models that track multiple customer touch points to help observe campaign metrics and to give credit where credit is due.
Overall, our report finds that marketers have enthusiastically embraced the programmatic era: an incredible 95% of marketers surveyed plan for programmatic ad budgets to increase or stay the same this year. Further proof of this shift, a solid 61% of marketers said they believe that programmatic ads provide a greater return on investment than traditional media.
With a strong grasp on social—and more ambitious investment in mobile— marketers are showing that their relationship with ad tech is becoming stronger and more competent. With the majority of marketers indicating that they intend to keep raising their investment in programmatic, retargeting and mobile, 2016 promises to bring even more efficiency to the marketer’s working world, benefiting media agencies, their partners and the businesses they deal with every day.
Adroll’s ‘State of the Industry UK 2016’ report can be downloaded here