The AdNews end of year Perspectives, looking back at 2024 and forward to next year.
Jo-Ann Foo, Senior Director, Analytic Partners
It’s fair to say that 2024 has been the breakout year when it comes to marketing analytics - the amount of column inches and conversation about marketing mix modelling (MMM) has been matched by clients putting their money behind it, and seeing the results to back it up.
One reason why MMM became such a hot topic this year is due to all the chat around the death of the cookie and walled gardens getting even higher walls (think Apple making cross-app tracking an opt-in). These changes meant that the online attribution models that were previously considered vital started to be questioned - both in terms of their future but also (especially when it comes to last click) their accuracy.
The accuracy of last click models particularly came under scrutiny over the past year due to the loss of data signals from walled gardens and the fact that people can’t, or don’t, click on some media (such as videos).
Altogether, that means you can be missing something like 82% of your interactions from social media, as an example.
There’s also been criticism from Les Binet highlighting the fallacy of attributing a sale to a single tactic. This mindset leads marketers to believe a sale may happen due to price OR product features OR the economy OR the ad with attribution. The reality is that the OR should be an AND, which can only be shown through a model looking at incrementality, such as a mix model.
So without the confidence that these models gave, marketers had to begin to search for other solutions, which encouraged more new entrants to the market this year, who had budgets that used to be spent on attribution models.
Then there is also the economic backdrop of 2024, which was marked by budgets being cut and slow spend. We were all expecting challenges - it’s been tough for many industries, and marketing isn’t immune.
Tight budgets persisted from 2023 into this year, and while there are signs of improvement, a genuine turnaround still feels distant. I believe the pressure may only end once the RBA announces a cut to the interest rate. Until that happens, businesses have to continue to fight for every sale.
It’s these economic difficulties which I believe may have also contributed to the growth of MMM this year. When budgets are tight, marketers truly need to make every single dollar work harder than ever and connecting marketing directly to sales to be able to provide evidence of efficiency and effectiveness to finance, is a key benefit of MMM.
However, a natural consequence of MMM becoming more popular means it has put the spotlight on other related challenges, with quality of data chief among them.
There is still a gap in the quality of data most marketers have access to and the quality of data they need in order to develop actionable insights. This is a critical area for improvement. The quality of data going in is always going to affect what comes out, regardless of the tool that’s used.
I believe there’s a strong opportunity to elevate this space and improve the quality of these resources across the board and I’d love to see this lift. As publishers get more interested in MMM too, it will hopefully mean that data quality finally improves.
Another emerging challenge is the industry’s obsession with “real-time” reporting. Real-time measurement and reporting have become increasingly sought after because it allows brands to follow the performance of campaigns in granular, real-time detail, giving them the chance to swap out underperforming ads for new ones as often as they’d like.
It’s all well and good to have a dashboard that can help you report the results of your marketing quickly, but the claim of real-time in MMM should be critically examined. There’s an abundance of data that should go into your model that isn’t available real-time, such as competitor pricing and distribution (end of day at best), TV ratings (monthly for the version most clients sign off on), economic indicators from the ABS… and the list goes on.
This means your real-time model has to forecast all of these data points, bringing in more capacity error as you forecast your forecast. And let’s be real - if the real-time model could forecast all those economic factors well, wouldn’t the provider be using it to build a trillion dollar share portfolio rather than optimise toilet cleaner sales? (No offense to the toilet cleaner manufacturers.)
My own opinion is that real-time should be the domain of online-only models where you’re happy to ignore anything offline - which has issues of its own.
This approach of fast model reads and changes isn’t always in a brand’s best interests. Changing your campaign too often means you’re not giving your creative a chance to wear in, let alone for you to start worrying about if they’re wearing out.
These minute, quick adjustments also mean you may be affecting the long-term effectiveness of your campaign and overall brand strategy. As many marketing effectiveness experts state “consistency is the unheralded superhero of marketing effectiveness”- but the danger of excessively frequent reporting is that you don’t stay consistent and instead jump at shadows.
This leads into my next point. As we head into 2025, I would like the industry to think more deeply about what they’re looking to use their marketing analytics for. It’s easy to be swept up in the need for data, reporting, and statistics, but marketers need to have a really clear focus on what they’re trying to achieve in order to get the most out of the tools they’re using.
It’s also easy to become overwhelmed with all the technology and solutions available, but really, there are probably only a few simple solutions any business can implement to gain better understanding of their marketing activity.
There’s no silver bullet or single platform that will give a marketer everything they need - and that goes for specific channels as well. A balanced approach is always best, no matter if it comes to your marketing mix or tech stack.
For 2025, my hope is that marketers can take a step back from the overwhelming noise of technology and reporting metrics. Instead, let’s focus on the fundamentals - clarifying goals, ensuring quality data, and making decisions that lead to meaningful, long-term outcomes.
While 2024 was marked by economic headwinds and data challenges, it was also a year of progress. Marketers are increasingly embracing tools like MMM not just to measure performance but to understand how they can truly drive growth. The conversations are evolving, the tools are improving, and the industry is heading in the right direction.
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