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What Brands Should Know Before Hiring An Ad Partner

Vice President of Operations, leading and growing the US team for RTB House

In the retail world, I believe 2020 and 2021 will be remembered for the explosive growth of e-commerce. Over the past year, many brands have shifted their focus to a digital-first approach and are taking their online targeting strategies more seriously than ever. There has been a shift away from last-click marketing and a greater willingness from CMOs to measure attribution in ways previously only reserved for the last click.

Increasingly, brands are realizing they can’t just retarget their previous customers; they have to address all areas of the consumer’s path to purchase with the same investment and attention. In e-commerce, full-funnel marketing solutions can help sustain sales growth.

Through my time helping lead a full-funnel marketing agency, I’ve seen firsthand that in the past, companies have overvalued the channel where the deal was closed and the sale was made, therefore leaving channels that started the sales process to atrophy. In doing this, some brands might feel as if they have emptied the cookie jar. Constantly remarketing to the same people is not an infinitely sustainable process, as core users and core demographics run the risk of becoming exhausted.

By focusing heavily on last-click marketing when allocating performance budgets, core users are targeted heavily, which is what can lead to user exhaustion. This exhaustion can, in turn, lead to high rates of channel cannibalization where the audience is churned and becomes smaller. Channel cannibalization rates, in my experience, often increase when brands have higher rates of retargeting to returning users, whereas rates tend to decrease when brands have higher rates of acquiring new users. By providing some element of value to bring new users into their consumer pool, brands are not only able to better avoid customer churn but also better able to increase their pool of retargetable users. This can lead to better last-click advertising as well.

With brands developing more of a digital focus due to the pandemic, and with the maturation of attribution technology, bringing in new users in a measurable way is more achievable than ever. Business leaders have always known the importance of prospecting, but the challenge has been measurement. In digital, nonperformance is simply not acceptable.

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This is why some brands turn to full-funnel ad partners, as these partners can help measure this type of engagement and give brands a better understanding of what actions a consumer takes after seeing a connected TV or over-the-top video impression. (Full disclosure: My company offers full-funnel ad services, as do others.) Did that consumer click on a retargeting banner or a prospecting ad? Did they engage with an email marketing campaign or go into a physical store? Being able to track and attribute these upper-funnel tactics to get more users in is a huge win for the entire funnel; once a user has engaged, they become ripe for retargeting. And with better prospecting, the retargeting funnel is carefully maintained with much less chance of channel cannibalization.

For brands seeking a vendor for better digital prospecting and full-funnel marketing, there are a lot of boxes that need to be checked: First, brands need to allocate their budgets as efficiently as possible, as they often need complex solutions. It’s also essential to have a technical stack that simply works. The reality is that most large brands require multiple vendors to do different things. My company, for instance, has clients that also use Google and Criteo, as most vendors have their own specialties and strengths. For each individual brand, there’s only one way to find the most effective and cost-efficient solution: testing and performance monitoring.

A full-funnel partner should help your brand determine where customers are within the funnel, which customer segment they fall into, which ads are best to show each segment and which products will resonate the best with each user. But before any of that, brands need to get users onto their sites in the first place. Brands need audiences big enough to create meaningful segments, and then they can target those segments specifically.

Finally, I recommend keeping the following best practices in mind if you decide to partner with an agency:

1. Ensure that you have given all vendors clear and even targets. If you are going to use two retargeters, for example, I suggest giving them both the same cost-per-action or return-on-ad-spend goals.

2. Make sure your mix of partners will future-proof your online marketing. Ask your vendors if they target based on identity-matching, context or group-based methodology. This will ensure reach and scale while still being able to generate results.

3. Test to find the best mix. (Personally, when it comes to incrementality testing, I’ve found the “ghost ads” methodology is often well received.) Make sure your partners are able to support the types of testing that will allow you to best determine where to put your marketing dollars.

Ultimately, for each brand, the specific stack will be different based on their individual needs. But the commonality is that a successful stack will put real effort into prospecting new users. Without that, brands are simply too at-risk for their best channel to eat its own tail.

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