By Vinny O’Brien, E-Commerce Trainer and Consultant at Vinny&Co
Let me qualify this. Attribution itself is a challenge to understand for non-technical advertisers. It matters more to agencies than anyone else.
Brendan Hughes, CEO of Optily, recently posted about a metric ‘MER’ – marketing efficiency ratio. Over the last few months, I have been embedding this into clients. As defined by Optly (there are many definitions), MER looks at the relationship between overall sales and advertising. MER enables you to overcome many of the issues associated with correctly attributing sales to ads run across different ad channels.
This is why I think it can gain a foothold to become a metric all teams can think about in 2023 and beyond. Here are some of my assertions as to why. I am not going to use data (yet) to back this, but there is a reality of how the market has shifted.
We are told we need to be present in all channels – so why would we build our advertising around a single channel attribution whilst ignoring the rest.
Most ad platforms are being built to be self-serve – where budget and business goals are the only inputs we need to control. Attribution is not spoken of.
With the exception of Amazon, most other platforms lack in intent to purchase. This will change as Retail Media Networks (RMNs) evolve and get more mature. Our job as small to medium businesses will be to ensure we keep the intent networks well served with budget.
Brand awareness, growth goals and sales need to live in the same discussion. MER allows this discussion to happen. It is not perfect.
For conglomerates and multinationals, attribution models help deliver insights – they are generally the only ones with the budget to take effect. Across their channels, they have enough transactions running through the business to arrive (at some point) at economies of scale, for better or worse.
Within the MER model, channels adopt goals instead of ROAS as a metric. This has been studied and modelled written about by a world-class practitioner Kiri Masters and her co-author Matteo Bizon
Instead of making things better, the ad world has gotten more difficult, particularly for those at the SM side of SME | SMB groupings. It is congested, tiring and growing every week. My big bet for awareness next year is catch-up TV (CTV) – consumers live in this media.
MER is a cross-functional metric. It can help bridge culture and skills gaps. It has a better presence at the boardroom table.
Is it time that we stopped the attribution discussion and all adopted MER as a company metric?
Read Kiri and Matteo’s research here – it is exceptional.
