“Data-Driven Thinking” is composed by members of the media community and consists of fresh ideas on the digital revolution in media.
Todays column is by Nate Woodman, creator of independent consulting company Proof.
AdExchanger readers need to be familiar with the term “weaponized personal privacy.” The idea explains the primary result of Big Tech raising the walls of their gardens under the banner of personal privacy however with the deliberate secondary effect of increasing profits.
Long before privacy was the name of the video game, Google and Facebook demonstrated that measurement is an arrow in their competitive quiver.
Historically, Google and Facebook used last-touch attribution (LTA) was the default system for payment, optimization and reporting. But in current weeks, both Google and Facebook upgraded their measurement methods.
It is not a coincidence that both business updated their attribution systems at the same time. And its noteworthy that they picked markedly different approaches to replace LTA, Google going with multitouch attribution (MTA) and Facebook its open-source marketing mix modeling option (MMM).
Tilting the measurement playing field.
Google just recently moved from a much-derided and basic LTA approach to a basic and less-derided MTA one.
Google held onto LTA measurement for more than 15 years despite its known flaws since the search engine typically accumulates the last click for a user who checks out a website or online shop.
Facebook likewise traditionally defaulted to the last click with a 30-day attribution window, or last view for a one-day window. Facebook cuffed independent app set up advertisement networks like Millennial Media circa 2014 by forcing mobile marketers to adopt its attribution methodology and SDK, just as Facebook introduced their own app install advertisement network.
Why change methods now?
The significant element is Apples AppTrackingTransparency (ATT) policy reaching scale.
Each business might offset the marginal loss in third-party cookie information from Safari and Firefox internet browsers. But Google and Facebooks LTA method could no longer successfully track iOS users and conversion events, as enough Apple users pull out of tracking to cripple the general attribution score.
Both business have picked new measurement methodologies that play to their strengths in the new media and privacy environment.
Independent ad tech is not the primary rival guiding Googles or Facebooks decision-making (that would be Apple). The independent advertisement tech market isnt huge enough to warrant the attention, to be frank. The independents will be those most affected by the changes.
Independent ad tech is not the main competitor guiding Googles or Facebooks decision-making (that would be Apple). The independent ad tech market isnt huge enough to warrant the attention, to be frank. Google has market supremacy in search, display marketing and instream online video. Facebook has market dominance in mobile advertisements and app-install channels. This was highlighted in the collusion case documents, which exposed that Facebook agreed to reject header bidding (the independent ad tech initiative) in exchange for bidding choice on app-install stock on Googles exchange.
Why did Google pick MTA and Facebook open-source MMM?
The response is because, in each case, the new measurement method is beneficial provided the existing market dynamics and increased competition from Amazon and Apple.
Google and Facebook have specified their own views on where they see their competitive strengths, as exposed through internal interaction recorded by the multiple state attorney generals of the United States inquiries into collusion in between the two business. Google and Facebook effectively divided the digital advertisement market in two and concurred not to disrupt the others market supremacy.
Google has market supremacy in search, display marketing and instream online video. Facebook has market dominance in mobile ads and app-install channels. This was highlighted in the collusion case documentation, which revealed that Facebook consented to decline header bidding (the independent ad tech initiative) in exchange for bidding choice on app-install stock on Googles exchange.
Google and Apple likewise co-existed peaceably, because Google went more affordable and open source with Android, while Apple took the premium smart device market (plus a financially rewarding search licensing deal, with Google paying billions per year for iOS and Safari searches). Now Google and Amazon have direct channel overlaps on search and intent-based marketing, while Facebook and Apple square off for the app-install market.
How do the current measurement modifications reflect the competitive dynamics?
Google selected MTA as its default methodology since it can still associate touch points along the user journey from owned-and-operated residential or commercial properties such as YouTube television, YouTube, Google Search ands its screen network. Any earnings loss from search-based last clicks can be picked up in other Google-owned channels.
In addition, the switch to MTA opens the door for advertisers to accept probabilistic attribution modeling and lays the path for Google to use modeled conversions as part of its attribution credit, hence reclaiming conversions it can no longer deterministically verify due to ATT.
Facebook defaulted to MMM, a methodology that is less precise but ultimately more accurate to true marketing effectiveness measurement, due to the fact that it can be validated by external experiments. The relocation, if adopted by marketers, levels the measurement playing field with Apples information and measurement take advantage of over Facebook for app-install attribution.
The choice by Facebook is better to the methodological reality; it is also tactically protective.
Google has actually created a new weapon with MTA, while Facebook has made a guard with MMM.
We can find out from the context and market dynamics that competitive business will always make choices that remain in their benefit. Brand names are certified financiers, and they need to be conscious of the mistakes of who they let count and associate the success of their marketing dollars. Buyer beware.