The two most valuable data points in online marketing, in terms of delivering ROI for a client, do not require a complex alogorithm or a secret sauce. When someone conducts a search, they are giving up one data point. Based on that one data point, a buyer can place a related ad and generally get a good return. In the Audience Targeting space, the same is true. A site visitor provides one data point - a browser reached a product page on a site. Based on that one data point, marketers are generating terrific ROI executing retargeting campaigns. My point is that the two most effective online marketing tactics are based on a single data point. No doubt there are algorithms that can measure the effectiveness of these single data point activities, extrapolate and increase performance, but the primary efficacy of these strategies centers around a single data point.
Of course this doesn’t mean that a sophisticated algorithm based on the analysis of many data points can’t work, but in most cases advertisers don’t buy enough media to provide enough data to make the algorithm reliable and actionable. When you are analyzing volumes of data points, you need a lot of volume to deliver actionable information (I’m sure that comment will not sit well with some of the company’s developing predictive models based on limited data, but I have never seen this strategy work for a client and I remain very wary). There was good post I read this morning on Cogblog that illustrated my point – even at Ad.com, arguably the biggest ad network out there, with volumes of data, more data is needed to improve the algorithms. In his post, Brent Haliburton argues: “I worked at Ad.com and I am not gonna lie, I took away from that place a sense that algorithms are hard, you need tons of data to figure out how to improve them, and there are few shortcuts other than “been there, done that”. Unlikely that any small company has a better algorithm today.” I’m no techie but its hard to fight Brent’s logic.
I have been focusing on this subject because I fear that algorithms have become a smokescreen for fraudulent operators and advertisers need to be wary. My advice to ad buyers and online marketing people is this – before you place an order with a new DSP or Ad Net that relies on their secret sauce to deliver results – just make sure that the secret sauce isn’t View Conversion Spam – because it usually is. When you have had a lot of success with single data points, it’s easy to be cynical.
