As the marketing landscape undergoes significant transformation, marketers are facing challenges in accurately measuring the impact of their investments. According to recent data from WARC, a mere 2% of marketers are effectively utilizing a combination of advanced measurement techniques such as marketing mix modelling (MMM), experiments, and attribution to gauge the full extent of their marketing impact.
The impending phase-out of cookies and the emergence of new measurement techniques are set to define the marketing landscape in 2024, ushering in a period of disruption, uncertainty, and experimentation. With cookies being phased out and new measurement methodologies gaining prominence, marketers are navigating uncharted territory in their quest for accurate measurement and attribution.
To shed light on these pressing issues, WARC, the global authority on marketing effectiveness, has released "The Future of Measurement" report. This comprehensive study delves into the latest trends and emerging best practices in marketing measurement, focusing on key areas such as artificial intelligence (AI) and synthetic data, the demise of third-party cookies, challenges in holistic measurement, and bridging the sustainability gap.
Paul Stringer, Managing Editor of Research and Insights at WARC, emphasizes the significance of these developments: "As we approach the phase-out of third-party cookies by Google in Q3 of this year, it's evident that many advertisers are not adequately prepared for this shift. The lack of awareness and preparedness underscores the urgency for marketers to adapt to new measurement solutions and embrace emerging technologies to accurately assess the impact of their marketing efforts."
As marketers navigate this period of transition and uncertainty, the insights provided by WARC's report serve as a valuable resource for industry professionals seeking to stay ahead of the curve and effectively measure the effectiveness of their marketing strategies in an evolving digital landscape.
“With measurement continuing to evolve in several directions at once, marketers find themselves battling multiple headwinds: not only the demise of third-party cookies, but new regulations around sustainability reporting, and, of course, the growing influence and impact of AI. All of which we address in this report,” part of the report reads.
Key challenges and trends outlined in The Future of Measurement report, and what marketers can do to keep pace with emerging best practices in measurement are:
- Hurdles in holistic measurement: only 2% of marketers are using attribution, experiments and marketing mix modelling (MMM) in combination to measure marketing impact
- Most marketers are failing to use the full range of techniques that enable them to measure the full impact of their marketing activities. Data from WARC’s Marketer’s Toolkit survey shows only 2% of marketers are using attribution, experiments and marketing mix modelling (MMM) in combination for measurement, whilst a further 22% say they don’t use any modelling at all.
- Guidance highlights three techniques that are critical to holistic measurement. Each technique brings strengths that can offset the weaknesses of the other.
- Attribution: The process of assigning credit to the different touchpoints that are found on a user’s path to a conversion. Fast and easy to scale, it gives real-time insight into drivers of performance. But, it is limited to digital channels and is best for measuring short-term impact.
- Experiments: Uses randomised controlled experiments to compare the change in consumer behaviour between groups that are exposed or withheld from marketing activity while keeping all other factors constant. It is the gold standard to measure causality but can be difficult to scale.
- Marketing mix modelling (MMM): Utilises advanced statistics to give a holistic overview of all channels, sales, and external factors. Can provide a longer-term view of media impact, but can be expensive and requires at least two years of historical data.
AI and the growth of synthetic data: 60% of data used to develop AI and analytics applications will be synthetically generated
Unlike ‘real’ data, which is based on observations from the real world, synthetic data is produced artificially to emulate it using purpose-built mathematical models or algorithms.
Synthetic data has a variety of applications in marketing, including pricing, customer journey planning, competitor analysis and new product development. It also negates customer privacy issues, as it has no personal information attached to it, and can conduct market research quicker and cheaper.
By this year, Gartner has estimated that 60% of the data used in AI and analytics projects will be synthetically generated, and according to Straits Research, the global market for synthetic data generation is projected to grow by 37% between 2023 and 2031.
However, AI-based insights bring new risks to marketing research. Generative AI tools can amplify bias, trigger privacy breaches and deliver inaccurate results. Marketers should develop clear ethics and best practices when working with these tools.
Tim Geenen, CEO and co-founder, Rayn HQ, says: “There are many benefits to [producing synthetic data], from achieving more accurate results, to building new data sets that reflect our diverse society and opening the door to advanced ways of understanding audiences.”
The third-party cookie countdown: Only half (51%) of marketers are prepared for the deprecation of third-party cookies.
The phasing out of cookies is due to take place in Q3 of 2024, severely limiting the ability of companies to track individuals online. Yet many marketers are still not prepared. According to a recent survey by IAB Europe, only half are prepared for the deprecation of third-party cookies.
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