Season 5, Episode 5: The measurement myth

38 snips

Jan 29, 2025

Dive into the complexities of advertising measurement, where the famous quote about wasted ad spend sets the stage for a discussion on inherent uncertainties. Discover the measurement myth that challenges the notion of needing absolute precision. Explore advanced advertising attribution methodologies and the impact of privacy regulations on strategies. Learn how shifts in the digital landscape, like the decline of third-party cookies, prompt a rethink in marketing measurement, urging a move towards innovative and flexible approaches.

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INSIGHT

Wanamaker's Wisdom

John Wanamaker, a marketing pioneer, understood that advertising measurement is inherently uncertain.
His famous quote about wasted ad spend reflects this uncertainty, not advertising's ineffectiveness.

INSIGHT

The Measurement Myth

The "measurement myth" is the belief that advertising measurement requires total deterministic precision.
This myth prioritizes channels supporting deterministic identity over more holistic approaches.

ANECDOTE

Idealized Attribution

A simplified example of digital display ad attribution involves direct clicks leading to immediate purchases, tracked via UTM parameters and cookies.
This scenario, however, relies on specific integrations and immediate conversions, which aren't always realistic.

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"Half the money I spend on advertising is wasted; the trouble is, I don't know which half."

Knowing the context of his work, my view of the infamous quote attributed to John Wanamaker is that advertising measurement is fundamentally and necessarily uncertain, even in success. This surfaces another, in my view, invalid interpretation of the quote: that advertising is only effective when it can be measured perfectly, absolutely, and with total precision. To my mind, this has been the prevailing view within digital advertising sector: that advertising measurement is inherently defined by total, deterministic precision.

This is the measurement myth.

In this podcast, I’ll unpack the measurement myth and why I believe the digital advertising ecosystem is abandoning it in favor of more holistic, statistically sophisticated, and scalable approaches to advertising attribution and measurement. I’ll discuss some of the methodologies at the frontier of advertising attribution that are alleviating the need for deterministic identity in advertising measurement and how their use allows advertisers to materially expand the reach of their messaging, and what the implications of that are for the digital economy.

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