Three Takeaways from Our 2021 CommerceNext Roundtable
In-person interactions have been few and far between these days, so I particularly relished the opportunity to attend a real live event and interact directly with other marketers at CommerceNext. It’s always fascinating to hear about the trends and challenges that marketers are facing – and given the twists and turns of the past year and a half, I was eager to see how the industry had adapted.
This year, my roundtable’s theme was customer acquisition beyond search and social. Below are some of my main insights from my discussions with marketers:
Far too many marketers are still relying on last-click attribution
In my conversations with marketers, I was surprised to find that a significant number of them still used last-click attribution to track conversions. Our CEO, Jeremy Fain, has written in the past about why last-click (also known as last touch) attribution is a severely flawed metric, but it essentially boils down to the fact that focusing on this attribution model causes marketers to ignore the role that other touchpoints play in getting someone to convert.
Part of the problem is the fact that marketers, especially those working for brands with limited digital advertising experience, tend to gravitate towards whatever’s easiest to measure – and until very recently, last-click attribution was Google Ads’ default conversion model, making it one of the most accessible metrics. However, last-click attribution doesn’t work for channels like CTV, where the route to a conversion is more circuitous. Now that even Google is moving away from this model, marketers will have no choice but to develop a more nuanced, comprehensive understanding of their customers’ journeys.
Most spend is concentrated on Google and Facebook, ignoring the prospecting opportunities other platforms present
For many of the marketers I spoke to, search (ie. Google) and Facebook took up by far the largest share of ad spend. At the moment, social media advertising still produces the highest ROI of all channels, but it’s clear that marketers are starting to run into issues of scale and increasing customer acquisition costs.
This demonstrates a common problem I see with many marketers: too often, they’re focused more on the bottom line and driving conversions, and not enough on the hard work of prospecting. Customer acquisition is expensive, and it only gets more expensive if you don’t take the time to identify which audiences you should be targeting, and which people are more likely to convert. At Cognitiv, our deep learning algorithms automate the prospecting process by combing through clients’ first-party data to determine the key characteristics of an ideal consumer, which then enables them to pinpoint the individuals that are most likely to make a purchase. This results in a scalable and efficient solution for finding the new and incremental customers.
Many brands still don’t know how to utilize their first-party data
Because many of the marketers I spoke with worked for brands still at a relatively early stage in their digital development, none of them had yet been able to utilize their first-party data for customer acquisition. Most of them rely on Facebook and Google to do look-alike modeling, which can be useful given both companies’ extensive data resources – but brands have to reckon with the fact that their own data might be used to fuel Facebook’s algorithms for their competitors.
First-party data is a hugely valuable commodity. Utilized properly, it can open up whole new avenues of exploration that marketers previously might have ignored. Deep learning in particular is great at analyzing data to find patterns that human analysts may have missed, which can lead to the discovery of new audiences to target, products to develop, or marketing touchpoints to invest in.
Most of the marketers I spoke to were at an early stage in their marketing evolution, which explains why they were so highly dependent on Google and Facebook. However, it was also clear to them that they were largely at the mercy of those two companies, and needed to find alternatives if they wanted to remain successful.
The reality is that marketers need a robust customer acquisition strategy that focuses as much on prospecting as on conversions – which means finding a way to leverage first-party data to provide the kind of customer insights needed to generate those prospects. It also means leaning on advanced technologies, like deep learning, to do the hard work for you, leaving you free to focus on moving your brand forward.