Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Vectors Of Engagement And The Click-Free Digital Economy

Posted by Tom Foremski - December 4, 2014

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A click is unreliable because its origins can be easily obscured for fraudulent reasons and its use as a metric of engagement is incomplete and deeply flawed.

There's a clue to where things are headed in this post by Josh Constine: Why LiveRail Ditched An IPO To Sell Its Video AdTech To Facebook For ~$500M

Facebook has invested a ton into conversion tracking so it knows if you bought something after seeing one of its ads. It all works because people stay logged in to Facebook, which ties together their web and mobile identities.

Online, Facebook uses tracking pixels installed on advertisers’ checkout pages to measure conversions even weeks after an initial view. Offline, it partners with brick-and-mortar purchase data brokers like Datalogix to connect your supermarket buys using a loyalty discount card to your Facebook profile. Businesses can also securely upload privacy-protected records of who bought what at their stores, which Facebook then matches to who saw what ads.

All this lets Facebook tell advertisers when they earned more money from sales inspired by their ads than the ads themselves cost. When it can demonstrate this return on investment, advertisers pour more cash into Facebook’s coffers.

Foremski's Take: The future beyond the "click" will be a fascinatingly complex future and complexity rewards big players. In the above example, Facebook can show the vectors of engagement that led to a purchase. And there's related vectors of engagement (VOEs) such as recommending to a friend after watching an ad, or video. 

There's many other possible VOEs from other platforms. Google could show that a search for Target stores resulted in a visit to Target, thanks to its geo-tracking and seek a payment for providing that service. (It's a way to monetize foot traffic as well as web traffic.)

Publishers have been trying to get credit for sending shoppers to retailers through affiliate links in articles that they read. But this effort is often derailed because shoppers will visit price comparison sites before buying, and it is those last seen sites that get the credit and the affiliate payout. [Skimlinks Says Affiliate Payouts Short-Change Publishers -SVW]

And here's the rub, when there's many overlapping VOEs, and many different paths to the cash register, who can tell which one generated the sale? Which one should be paid?

If a company rewards Facebook for a VOE but ignored Google, will that result in an "optimization" of Google's algorithm that would favor a paying competitor? Most certainly.

Google Facebook, and others, all optimize their ad serving to favor the best revenue generating ads — why would this be any different? VOEs can be optimized in favor of those that pay, just the same as with ads.

Since VOEs can be fluid and are ultimately based on a platform's optimizing algorithm, there's very little transparency into the process of linking marketing with a cash register event. You'll pay to make sure you don't get left out.

Just hand your marketing budget to Google or Facebook or Twitter and they'll do the rest. You can go fishing.

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The Holmes Report names Tom Foremski one of the top 25 Innovators of 2013.




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