the interruption curve & digital optimization by soren ryherd
TRANSCRIPT
#SMX #11B @sorenryherd
THE INTERRUPTION CURVE & DIGITAL OPTIMIZATION
Soren Ryherd, Co-Founder, Working Planet
#SMX #11B @sorenryherd
WORKING PLANET
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Single-channel tools don’t cut it TOOLS &
METRICS ARE OUTDATED
Can be dangerous with action-based optimization on single channel data
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TOOLS BASED ON SEARCH Most of our analytic tools are based
on search, but user behavior is dramatically different with search than other media
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Bid management, channel assessment and programmatic buying break down when viewed independently, because they are based solely on in-channel performance But USERS don’t behave that way
INAPPROPRIATE PROCESS
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Cha
nce
of O
ut-O
f-Cha
nnel
Eng
agem
ent
INTERRUPTION CURVE
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If bidding to Cost-Per-Action target and 70-90% of actions happen out-of-channel:
• The channel will be undervalued • Cross-Channel reinforcement will
not be tested • Financial optimization will be lost
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Everyone in this room has probably killed a perfectly
profitable campaign
BEEN THERE
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(actually, how all advertising works)
• The channel will be undervalued • Cross-Channel reinforcement will
not be tested • Financial optimization will be lost
Cost of Media
Engagement Value Created
HOW PERFORMANCE ADVERTISING WORKS
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Out-Of-Channel Robs Value from In-Channel (anatomy of a Death Spiral)
Cost of Media
Engagement Value Created
Competitive Auction Remains the Same
Engagement & Value Migrate Out of Channel
As Value Drops, Bids and Positions Drop
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Tools and tracking were built for device as proxy for person and a click as the only path of engagement Both of these are wrong
MULTI-DEVICE & MEDIA MIX INCREASE COMPLEXITY
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Cha
nce
of O
ut-O
f-Cha
nnel
Eng
agem
ent
INTERRUPTION CURVE
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What If Your Best Ad is One that No One Clicks On?
LOGICAL OUTCOMES
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KIDS, DON’T DO THIS AT HOME
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Nope.
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Really?
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THE ROLE OF BRAND TRAFFIC
brand is not a channel
should only be looked at in combination with other channels/activities/data
what are the drivers?
in the “unknown” bucket
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§ Channel optimization can lead to inefficient results
§ Baseline for Out-Of-Channel behavior cannot be “Zero”
§ Ad structure should reflect user behavior
LOGICAL OUTCOMES
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• Revenues are real
• Models cannot predict more sales than actually occur
• Feeding real financial data into optimization is critical
WORK BACKWARDS FROM SALES
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Out-Of-Channel behavior shows up in the “unknown” bucket of brand and direct Understanding what drives the unknown bucket lets you better optimize campaigns
ATTACK THE UNKNOWN BUCKET
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Be Smart: Complexity of user behavior offers opportunity. Only if we embrace out-of-channel behavior.
DON’T MURDER PROFIT
