The Measurement Gap: iROAS, Geo Holdouts, and Progressive Truth

**Luke Austin** (0:00)
So, the problem that exists as it relates to marketing measurement is that there's a measurement gap.
Every brand really wants to understand the causal relationship between the advertising dollars they spend and the revenue they realize as a result. This is the central question of modern marketing. Does the spend actually work?

**SPEAKER_2** (0:20)
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**Luke Austin** (1:03)
Hey everyone, welcome to CTC's Canon Series where we're walking through our methodology across the core disciplines, the CTC methodology, how we approach forecasting, modeling, measurement, med ads, Google ads, email strategy, creative strategy, and the data that has informed the methodology across these disciplines. Keep diving into each one. This is part three on measurement. We've walked through forecasting, we've walked through modeling. We are now on measurement and then we will be sequencing into the other disciplines of creative strategy, meta, Google, email, and on down the line from there. So measurement is today's topic and this may be one of the topics that gets the most heated debate outside of meta ads and then creative strategy will be up there as well. So we have some hot topic conversations coming up in these in these next three conversations that we'll have as we walk through our series. But marketing measurement, this is how CTC close the gap between what your data says and what's actually happening through incrementality testing, geo holdup studies and commitment to moving closer to reality over time.
We could spend the next two hours just walking through all the different frameworks and approaches to measurement that exist in the direct to consumer ecommerce space and the brands that we work with. Across our data set of hundreds of brands, we are able to see and get insight into the conversations, the organizational structures, the platforms, the frameworks, the spreadsheets, the tools that are used to surround this conversation of marketing measurement from creating a weighted triangulation of marketing measurement based off of J last click, an adobe signal, and Northbeam to using also measure as the source of truth and then translating those to the platform ROAS targets to we're going to use platform attribution as the key source of truth on the line. There's there are an infinite combination of how brands are approaching marketing measurement. And our role and our responsibility is to identify what we see as being the most helpful framework for approaching this conversation that leads to the best decision making in pursuit of the business hitting their business objective, which is rooted in the first part of the series around forecasting and it's aligning on what that core objective is. So the problem that exists as it relates to marketing measurement is that there's a measurement gap. Every brand really wants to understand the causal relationship between the advertising dollars they spend and the revenue they realize as a result. This is the central question of modern marketing. Does the spend actually work? A great measurement system. We believe close to the gap between reality and fiction when it comes to interpreting that effect. The wider the gap, the worse your capital allocation decisions, the wider the error bars are. The narrower the gap, the more confidently you can invest towards growth. So on picture two ends of a line, we have reality, the true incremental impact of your spend. We have fiction, what your platform dashboards report or whatever the tools are. And there's the gap in between those things. The measurement system exists in that gap. The goal is not perfection. The goal is to move fiction closer to reality over time with increasing confidence. So some first principles to ground us in this conversation. Before building any measurement system, there are foundational truths that must be accepted. There are opinions.
These are constraints that cover any honest approach to marketing measurement. So the first of these three principles is that media efficacy is in constant flux. The relationship between your ad spend and its revenue impact is not a constant. It changes day to day, week to week, driven by forces both within and outside your control. Any system that treats this relationship as fixed is lying to you. The second principle, you are always building an approximation. At all times, your measurement system is an attempt to build the closest approximation to reality that you can. There's no perfect measurement. There is only less wrong.