By Steve Tobias, Media Center of Excellence, IRI

If a consumer buys a product after seeing an ad, will that sale be attributed to the correct marketing lever? This is the million-dollar (or rather billion-dollar!) question in advertising, and one that marketers across all industries, but especially those in CPG and retail, continue to grapple with despite the many advances in marketing measurement. And with budgets continually under more pressure, it has become even more important to prove that every dollar of investment is being maximized and that measurement is done in a holistic and objective way.

Digital marketing measurement has evolved significantly during the past few years, as traditional marketing mix modeling (MMM), which is used to improve marketing performance across many touchpoints, now supports more dynamic media planning needs. It also allows for unprecedented data access and helps marketers reconcile results from other advanced measurement approaches, such as multi-touch attribution (MTA), which is used to help marketers identify which of many touchpoints led to a purchase and optimize those touchpoints.

There’s been a wave in the industry to marry methodologies across different forms of marketing measurement to ensure more consistent results. But this increased momentum for the connection or "unification" of MMM performance measures (portfolio, brand and total touchpoint measurement) with highly granular MTA-level tactics (site, genre, creative, audience target, frequency band, discrete campaign measurement) shines a bright spotlight on the most obvious challenge: There’s almost always an extra step in the path to purchase. Consumers have to get to the store or go to the retailer’s or brand's website to buy, often making it difficult to tie that purchase to specific ads in any channel.

According to eMarketer, CPG and retail marketers tend to spend more on digital advertising, but the majority of CPG sales still take place in brick-and-mortar stores. This is true despite the rapid acceleration of e-commerce, including click and collect, as the COVID-19 pandemic ramped up last year. A BCG report showed that, during the pandemic, online food and beverage sales went as high as 15% of total retail sales.

The fact remains that consumers' online search and contextual behavior isn't always a great predictor of their CPG and retail purchase behavior - especially because what they buy is often driven more by their habitual replenishment needs. For example, most households purchase laundry detergent on a regular basis, so it becomes critical to only attribute incremental purchases or brand switching to advertising. Advertisers already know they need to start marketing to buyers when the product is beginning to run low. But even if consumers don't see an ad, they're still going to buy detergent.

On the other hand, if a child suddenly has cold-like symptoms, their parent's online search behavior may include searching for products that are geared specifically to children. Even if the parent views a specific online ad or video, they often still drive to the local store to make the purchase, which makes it difficult to tie their online behavior or online ad exposure to the offline sale.

Then there's the impact of in-store trade promotions, which complicates measurement even more. Trade promotions, which typically include shelf displays, features in circulars and temporary price reductions, often have a meaningful impact on purchase decisions. Of course, during much of the pandemic, this has been less prevalent. But as things normalize, and with the laundry detergent example above, what if the consumers were first influenced by a digital ad reminding them to buy their current brand of laundry detergent, but when they got to the store, they saw that a competitive brand was on sale and decided to purchase that one instead?

An ad may have indeed driven an incremental purchase, but without also measuring the impact of trade on that decision, a marketer may come to the wrong conclusion or an incomplete one about what impacted the sale.

Unfortunately for marketers, it's getting harder to attribute media to offline sales. And assigning the impact of marketing exposure across all the different stages of the consumer path to purchase is challenging. This is why it's important to use more sophisticated and integrated measurement approaches – ones that are complementary and can get you to more accurate attribution.

A More Integrated and Holistic Analytical Approach

The earlier cold symptom example is a real-world attribution challenge for traditional MTA methods. If the attribution of media effects is misrepresented at the most disaggregated level, there's a missed opportunity to unify this attribution measurement with higher-order investment decisions (e.g., how well the total campaign worked or how well total online video spend performed). Marketers would be compounding the challenge by first wrongly attributing the true effects of the discrete digital campaign and then wrongly reconciling them to top-down MMM measurement techniques. When you can harmonize your measurement, you get more accurate attribution and can continually optimize your media spend.

At IRI, we believe that to get close to achieving unified measurement for a campaign, marketers must be able to tap into seven important resources:

1. unique data assets including actual purchase-based and behavior measurement at the consumer level
2. robust media partnerships for more granular reads within technology platforms
3. customized and sophisticated measurement techniques for CPG and retail that benchmark thousands of real-world observations
4. a technology platform enabling simulation and optimization that connects every point in the marketing planning/execution process (from portfolio to brand to campaign to touch point to consumer)
5. the harmonization of strategic and tactical marketing objectivesthat assign the right incremental lift effect to the most granular marketing tactics while reconciling to strategic marketing goals (e.g., total brand sales, awareness, penetration)
6. an AI-based platform that gives you early alerts on your business performance and identifies and sizes opportunities so you can get a head-start on determining what's worth activating
7. always-on optimization that allows for changes to campaigns in near-real time, to maximize budget and impact.

We've solved for all the above with our multi-touch attribution and unified measurement solutions, as well as our opportunity alerts and predictors.

The customer path to purchase is dynamic and constantly changing, especially in CPG and retail — we all experienced that firsthand last year during the week that COVID-19 hit the U.S. and grocery shelves started to quickly empty, leaving consumers, brands and retailers scrambling to manage through the rapid changes. While there is no silver bullet today for perfect ad measurement, there are several ways for marketers to continue to close the gaps between their online/offline data and more accurately measure performance across all types of media.

Let's talk about how you can improve the ROI of your media campaigns. Take a look around our media solutions and then reach out to your IRI representative or to me at Steve.Tobias@IRIworldwide.com.