The importance of data ownership
In this episode of the Data Rich show, AJ is joined by Kevin Brkal the president and founder of KNB Online Inc.
We talk through attribution models, ad spend, and how to protect your data through data ownership.
Check out our insights and conversation below:
Data- Amazing, but creepy
Kevin’s agency focuses on Facebook ads. The reason that they chose this as their platform is because of the Facebook audience network. Lots of different sites use the Facebook Ads network to sell ad space on their websites.
When it comes to the mobile web, any apps that collect real time data most likely use or sell that data. They can track your location and establish geo-fencing and geo-targeting to hyper target you as a consumer. It often freaks people out when they start to see ads for things that they think shouldn’t have a digital trail, but any number of apps on your phone could theoretically track that information on you.
As people get more and more creeped out by the things about them that are tracked, we see platforms cracking down on the things that can be tracked. The question that we naturally want to answer is how will this affect marketing.
Find a strategy that works for you
Before the internet, marketers still reached their target market. While we may not have access to as much information as before, you can still get mountains of data.
While browsers crack down on the data that marketers can access, no one is looking at location data being shared. Search engines also still sell randomized user data as well, so marketers shouldn’t panic just yet.
The primary victim of the data crackdown
Attribution modeling will get more difficult as browsers cut down on the amount of data that they share. This leaves marketers to rely more heavily on last-click attribution, or just saturate their markets with ads. The business who can afford to spend the most to acquire their customers always wins, but this may become even more important in the future.
Attribution is already a mess, but as browsers continue to limit the amount of data that you can gather on customers, it will only get worse. This change increases the confusion that ecommerce companies will have to deal with. Businesses just need to just gather as much data as possible to make an informed decision.
As we talked about previously, the best way to combat the confusion is to gather as much data as possible.
One of the best way to increase your data is to leverage UTMs. UTMs are free tools that everyone can use to increase the amount of data that you can gather. They allow you to create custom tracking parameters to gain better insights into your customers.
From there, you need to track your data in as many sources as possible. Facebook Pixels, Google Analytics, the back end of your ecommerce store; all of them track data differently. But if you have all of that data tracked, then on the back end a data company can extract the data and figure out the truth for you.
Another thing that you can do is alter the attribution models that you use in your tracking systems. Facebook defaults to a 28-day click window, and a 1-day view-through window. You can alter this window to better match your preferred attribution modeling.
In today’s marketing landscape, there is no limit to the number of touch points that you can have with your customer. The trouble that most businesses run into is deciding how they want to attribute back to the touch points across the journey.
Google Analytics defaults to a last-click attribution model. This means that the thing that drove them to your site the time that they converted gets complete credit for the sale. Facebook has an attribution window, in the which it claims full credit if a sale occurs in that window. The trick that marketers need to use is a blended model.
Adidas recently stopped their branding campaigns in favor of campaigns that seemed to be driving their sales, based off last click attribution models. They quickly discovered that the branding campaigns that they were running warmed their customers enough to click on the direct response campaign and purchase. Based off the data that they looked at, they thought that they made the right choice to cut the branding campaigns.
The most important thing that companies need to do when working with an agency is make sure that you’re owning your data. Whatever agency you work with, you need to make sure that they create the ads under your account and that they track with your pixel. The reason for this is that then you own that data. If you allow them to run the ads under their umbrella or with their pixel, then they own the data. In the event of a dissolution of the partnership, they could sell that data to your competitors.
Regardless of who you work with, it’s extremely important to own your data. Many ecommerce companies have started to move away from Amazon, because Amazon owns all of the data on its platform. As Kevin correctly pointed out, Amazon can take the data that they gather on your customers, and the things that they purchase from you. From there, they can recreate your product under their umbrella and force you out of your own market. It wouldn’t be the first time that they did.
Businesses have finally begun to recognize the value of data, as data has just surpassed oil as the most valuable resource on the planet. Businesses have begun to recognize the value of owning their data from top to bottom.
Take action from your data
Once you own your data, the next important thing to do is take action from it.
In order to know what actions to take, you need to know what your primary objective is. If you’re an ecommerce company, you likely want to increase sales. B2B companies likely want to increase leads. The important metrics that everyone should track are the cost per acquisition (CPA) or cost per lead (CPL). From there you want to calculate your return on ad spend (ROAS). If you’re looking at generating leads, it’s important to know how much it costs for you to turn a lead into a customer, or your conversion rates from leads to customers. Once you know that, you can find the lifetime value of those customers (LTV). If you have your LTV and your conversion rates, then you can reverse engineer your allowable CPL.
Don’t take too quick of action though
With all data, it’s important to find as many sources of validation as you can. In this hyper-connected world, it’s unfortunately easy to have skewed data; as this commercial points out:
Many analytics systems fail to recognize refreshes on thank you pages, which can dramatically skew your data. At Praxis, we have found that the best way to stop this is by creating a first party cookie that loads into the user’s browser the first time that they visit the thank you page. From there, you can update your tags to only fire in the event that the cookie is not present in the browser. Obviously, this still isn’t a perfect solution to the problem, but it can reduce the negative effects of over-attribution.
The most important metrics
Kevin has found ROAS to be the most important KPI in his business. Anyone who runs ads obviously wants to turn a profit on those ads, so it is very important to make sure that you track your ROAS.
Regardless of the metrics that you measure, the most important thing that you can do with data is validate. Track everything through multiple systems, don’t put your trust in any one. At the end of the day, these platforms want you to spend more money with them, so they will skew the data in their favor.
Data can be overwhelming at first, but it is your friend. Data will help your business scale and grow faster than anything else. AJ pointed out that you need a relationship with your data. The more time you spend with your data, the more in sync you can get with it. The better attuned you are to shifts in the data, the faster you can react to sudden changes or opportunities.
If you need help with Facebook advertising, Kevin is a great resource and can be reached at kevinbrkal.com