Cost per acquisition (CPA) and other performance metrics are the latest source of tension between CMOs and their digital media partners.
While some companies have taken strides to improve visibility into their day-to-day work, more can be done to offer greater insight into performance for a true apples-to-apples comparison. This is particularly true when evaluating which acquisition strategy is most efficient based on CPA measurement.
The good news is that the issue isn’t with visibility into total cost (i.e. total spend of campaign); instead, marketers face uncertainty regarding how their partners count acquired customers. The reality is a majority of companies over count acquired customers, and in turn, the resulting CPA is artificially strong.
Here are a few simple questions you can ask your digital media partner to validate your CPA metrics.
What is your cross-device solution for de-duplicating orders when multiple devices or cookies are tied to an individual?
If you’re working with a digital marketing partner that doesn’t have strong cross-device identification, you run the risk of receiving a report that inflates the number of acquired customers. We often see companies that count each cookie or device as a new customer when in reality they are shared by one individual. When that happens, reporting can easily misrepresent performance.
Poor cross-device identification also wastes your acquisition spend. Such waste occurs when individuals who converted on their tablet continue receiving the same messaging on their desktop or smartphone. Waste also occurs when individuals are over-messaged on their devices because your digital marketing partner is unable to recognize that it’s actually the same person. By messaging the same individuals over and over again, you miss a valuable opportunity to create new relationships with unique prospects.
Given the anonymity of the internet, cross-device identification is critical to both accurate CPA measurement and efficient media spend.
If your acquired customers’ metric counts unique individuals, have those individuals previously made a purchase from you?
CPA metrics measure just that – acquisition. Once you’ve collapsed your customer file, make sure your partner is indicating which customers are truly new-to-file. If someone is an existing customer who bought in-store last month, then they should not be represented as an acquired customer.
Here’s an example I often use:
Let’s say you’re working with a company who claims to have acquired 10 acquired customers through your recent campaign. Upon further inspection, however, those 10 acquired customers are actually 10 cookies that can be collapsed to five individuals. Next you find that of those five individuals, three of them have made a purchase this year. By asking a few questions, you’ve gone from 10 acquired customers down to two acquired customers.
What information can you give me to validate results?
This is simple: Request data files for every impression delivered and files for every attributed conversion. These will allow you to conduct an internal audit to validate the CPA metric provided by your partner.
As digital media measurement evolves from metrics like clicks and impressions to CPA and other performance-based measurement, transparent reporting is critical to maintaining client trust. Our clients routinely ask us where they should spend their limited dollars, and presenting them with accurate CPA metrics allows them to understand real performance of their acquisition spend. Not all acquisition measurement is equal, however, and it’s time we let our clients know that before they find it out for themselves.