Why Last-Click Attribution Fails Marketers and How Performance CTV Solves It | Jason Fairchild, Co-Founder & CEO at tvScientific

Why Last Click Fails Marketers

Tim Rowe, State of Streaming 0:45

If a customer watches your television commercial but buys the product after a quick Google search, why is Google getting 100% of the credit? Relying on last-click attribution is kind of like using kindergarten math to measure a multi-million dollar media budget. Plus, with paid search CPMs quietly hitting $30 to $100 AI summaries disrupting the way that we think about the bottom of the funnel. Is a highly targeted television campaign actually the most cost-effective performance channel left on the table? Today I'm joined by Jason Fairchild from tvScientific to talk about the reality of performance CTV. We discuss how incrementality testing finally proves television's exact return on investment and how TV creates a halo effect that actually boosts your search and social metrics. We also cover Pinterest's acquisition of tvScientific and what their 80 billion monthly visual searches mean for the future of intent in the living room. Make sure you hit that subscribe button so you never miss an episode. Now, on to the conversation.

Defining Performance Advertising On TV

Jason Fairchild 2:28

did it drive a sale? Did it drive an app download? Did it drive a lead, whatever their outcome that they're trying to measure, can they measure what their cost per lead was? So can they do real accurate measurement around their media investment ROI? So that's performance advertising. You may have heard, or the audience may have heard, cost per click or CPA. Those are all forms of performance-oriented advertising because you can measure the cost for a given unit of value, a click, a conversion, et cetera. So the big opportunity on TV, this that you know, we identified, and I come from paid search. You know, I was at a TV trade show and I was looking at some of the early, you know, CTV technology platforms and started to understand that because it's built on the internet, you could start to get a feedback loop like you do in digital advertising. So I called the founder of the paid search business model, uh, Bill Gross out of Idea Lab in Pasadena, and said, Hey, you know, I explained to him what I was seeing. I said, Am I crazy? But you know, could we do for TV what we did for paid search back in the day, which is enable advertisers to invest in TV and get the feedback loop so they know their ROI and every dollar spent on a granular basis? And that led to our funding. And what effectively what that means is a marketer can come in and buy CTV. We have a self-served platform and a managed service. We buy media and all the CTV streaming services, so Hulu or Peacock or you know, you're familiar with most of them. And we can connect the dots between an ad delivered at a household and a conversion from that household. So, did someone that had seen that ad buy after they saw the ad? And that's part of it. And that, by the way, that's a breakthrough because that's never been able to, that piece of it was unlocked by CTV and it's never been able to then accomplish before.

The Path From Ad To Purchase

Jason Fairchild 4:14

So, yes, we can do that. The next thing is you've got to understand TV's impact on driving that outcome because you can't click on a TV. So a user, a natural behavior might be if they see a Domino's Pizza ad, they might pick up their phone while they're watching TV, do a search for Domino's, click on a search result that might be paid from Google, and then make a purchase. So Domino's in their marketing dashboard is going to see a last click from Google, and Google's gonna take all the credit for that. By the way, that's an inherent flaw in last click advertising. So, what we do is we say we have a whole bunch of attribution analytics that are very transparent. So a marketer can see time, date, stamp of when an ad was delivered to a household, what the last click was to their website, and did that person order or not, that household order or not. And uh you can see that path to purchase. So that's one.

Incrementality Testing As True ROI

Jason Fairchild 5:08

Two, we'll do what's called incrementality testing. Incrementality testing basically does a holdout and this campaign to understand for people that were exposed to the ad, what's the conversion rate, what's the click-through rate at Google or Facebook, what's the dwell time, what's the purchase rate once they get to the website versus people who have been exposed to one TV ad or two TV ads, et cetera. And that really is the gold standard for assigning credit to how much TV is responsible for driving that outcome. All of that means you can do the ROI analysis that performance advertising is built on. So in a nutshell, performance advertising is taking the proven models of in paid search or social advertising Meta, for example, and moving it into TV and enabling people to buy and measure TV in the same way they buy and measure search and social. Sorry, that was a lot.

Tim Rowe, State of Streaming 5:59

No, that was great. And I think it was very needed because what I heard is this isn't replace your paid search budget with TV because now you can measure it. It's here we're now able to assign proper credit to television's role in driving that outcome. Did I hear that correctly?

The Brand Value You Get Free

Jason Fairchild 6:19

100%. Now, the bonus is even if you're just a pure math person and you only buy media for a dollar if you can make $1.50 and you're just pure quant driven, the bonus is on top of all that immediate performance value you're getting, you're getting all of the added value of awareness bumps and all of the things that TV is kind of known for, brand advertising, you're getting that almost for free. If you buy just purely on the quantitative ROI, you're getting probably another 50% more value just in brand advertising, which is awesome.

Tim Rowe, State of Streaming 6:53

And maybe that's the 50% of advertising I haven't been able to measure up until now. So thank you for giving us, I think, a good framework to think about performance CTV is that hey, we're now able to quantify the top of the funnel and its role across the media mix versus hey, take your budget out of paid search and maybe your tried and true cost per click, you know, sort of tactics and move it all to the top of the funnel. Because I think that's where some of the pushback from the maybe industry, if we'll just use the big 'I' industry, some of the pushback is, well, are you saying that I replaced my demand capture now with just more demand gen? But that's not what you're saying.

Halo Impact On Search Behavior

Jason Fairchild 7:35

No, I mean these channels operate, you know, one of our attribution analytics reports is what's called Halo Impact. Halo is if you run them together, you know, you're in search and you run TV, what's the impact on, you know, do you get a higher click-through rate on paid search or organic search? Do you get a higher, you know, visit rate? Do you get a repeat visit rate? It starts to quantify the value of running these together, at least TV's impact on last click and in site visits. We don't have access to like Meta. If you advertise on Meta, what's the value on TV because they're a walled garden and they don't share data? But we do have access to enough data to like build a compelling case that they should be run together. And then the common sense view is search ad or a social ad is what, an inch tall by a couple inches wide, and it's there for a couple of seconds, maybe. TV ad is full sight sound motion, 60, 70, 80 screen inches, you know, wide, depending on how big your TV is. It's 100% viewable for, you know, 30 seconds is most of the TV ads. I mean, it's a radically different presentation of the advertiser value proposition that connects emotionally, uh visually, all those things. You know, I think 10 years from now, we're gonna be looking back at performance, the early days of performance TV, and just saying it's a lot more valuable than paid search. Not that you shouldn't do paid search, but it's way more valuable because it's creating that intent, that you know, that emotional connection for a brand that's leading to the search in the first place. I was in the paid search business for six years. The one thing you can't do is create more searches. You can't create more people wanting Domino's pizza from Google. What you can do with TV is create more people wanting Domino's pizza or whatever your product or service is. I think it's massively undervalued. And you don't even have to buy into that. All you have to buy into is hey, if I buy my media on paid search and social based on getting a dollar fifty in sales for every dollar you know I spend in media or whatever your ratio is, you can do the same thing on TV. You don't have to even buy into the the added value that I just described.

What Exposure Frequency Does To Conversions

Jason Fairchild 9:44

Tim Rowe, State of Streaming 9:45

It's good. What do we see in the Halo report? What are some interesting findings that you and the team have uncovered from advertisers that do this?

Jason Fairchild 9:51

It's so fascinating because and I've asked that same question many times when we first started doing it. The first thing we look at is okay, leaving the product aside, it might be a car, it might be, you know, it might be what electronics. But if you deliver one ad, what's the click-through rate on the last channel? So you might have a click-through rate at Google, organic versus paid of X, Y, or Z. So control group, they didn't see any ads. What is it? Then this one ad, two ad, three ad, four ad, five ad, up to ten ads over the period of call it a week. And you'll what you see is the click-through rate at the last channel goes up. The dwell time and purchase rate goes up the more you expose them to TV advertising. This is not like soft analytics. This is when you click in it, you can see the time date stamp of ad exposure versus last

Avoiding Black Box ROI Claims

Jason Fairchild 10:38

click. You can see the real hard underlying data, which by the way is one of the problems with performance TV that, like anything else, any new category attracts a bunch of Wild West players. And there's people that just claim a certain ROI, but don't give you the ability to verify all the data at the granular level. You just want to stay away from that because you know it's easy to claim credit. You got to show. And you got to show what the incrementality is, you got to show what the path of purchase is. And all those players, Wild West players, they end up getting squeezed out of industries over time. And thankfully that's starting to happen with performance TV.

Why Agencies Struggle To Adopt

Tim Rowe, State of Streaming 11:14

What are some of the challenges that brands or advertisers have? Is it workflow related? Is it rethinking the measurement framework? What are some of the drawbacks or holdbacks from brands and advertisers who haven't yet adopted?

Jason Fairchild 11:28

Well, the bigger the advertiser, the more they use agencies. And there's like a legacy framework. They'll have the TV buyer, the radio buyer, the sort of legacy media buyers. Then they'll have the performance teams, and those usually buy search and social, and maybe even affiliate. When you go and talk to someone about TV at an agency, they immediately point you to the legacy teams who don't even speak this language. They talk about gross rating points, they talk about Nielsen measurement, they talk about upfronts, they talk about all the stuff that has nothing to do with performance. So job one is basically getting to the right person that speaks performance. The good news is I think increasingly even CFOs now demand some accountability from media spend. So you know, the atmosphere is getting better. So that's job one, get to the right person. Job two is you have to educate around everyone is indoctrinated around last click or paid click KPIs. Well, you know, what's your cost per click? Well, you can't really click on a TV, so let's that's maybe not, you know, that's not the metric. But here's how we connect the dots between, you know, ad delivered to a household and did they purchase the product? And the good news is, you know, incrementality testing, which, you know, five years ago when we started, people were like, huh? What's that? Now it's, I would say the most sophisticated marketers and even you know, into the mid-market, they're they get it. And that whether they use ours or a third party's incrementality testing doesn't really matter. But that is the gold standard in terms of understanding the impact of any one channel, TV or otherwise, on driving the outcomes. So the good news is I think the market is maturing and people are getting educated. And last click, there's a great one. Ford spends $150 million a year, whatever it is, on advertising the Ford F-150 pickup truck, the you know, the number one selling car in the US. And what do people do? They go to Google and they they find out where the local Ford dealer is and they click on something, and and ultimately in the marketer dashboard, Google gets the credit for that. The $150 million is just, you know, not even considered. Leaving aside, right or wrong, it's not accurate. So I think marketers need to understand that that is not true north. It's it's more complicated than that. That's very simple kindergarten math, and you don't get to live in this world applying kindergarten math to complex problems.

Tim Rowe, State of Streaming 13:55

And we're in such exciting times. We can apply that critical lens. I think never before has human capital been worth more to be exactly that. Critical thinkers, good decision makers. How do we apply and ask, you know, interrogate the data? That's a that's a phrase that a previous guest shared. I like that. Interrogate the data. Let's all be good interrogators.

Pinterest Intent Data Meets The Living Room

Tim Rowe, State of Streaming 14:18

The acquisition closed earlier this year. Pinterest acquiring tvScientific. What are you looking forward to in the next 12 to 18 months? What haven't you gotten to do yet? What are you looking forward to?

Jason Fairchild 14:28

Well, this idea of and what was compelling to me about the Pinterest acquisition or the Pinterest as a company is they have a massive amount of visual searches. They do 80 billion searches a month, half of which are commercial. That makes them larger than Amazon in terms of commercial searches every month. Run that back.

Tim Rowe, State of Streaming 14:47

What do you mean? What do you mean commercial?

Jason Fairchild 14:49

Commercial means a person is searching for a product, generally a product, sometimes a service in paid search land. But in Pinterest, it's usually a product. It's commercial nature. They're looking to research and buy a product. Could be makeup, could be home improvements, could be a car, could be hubcaps, could be whatever. So that is a bunch of intent that search intent. We know from Google, multi-trillion dollar valuation, and we know from Amazon that intent, you know, shopping intent data is really valuable. So the idea of working with advertisers to tell them that they can get to someone that's in the market for, you know, a car or home improvement category, you can place an ad on Pinterest, which of course they do, but you can also place an ad in the living room. So you get multiple opportunities to put your ad in front of that user at Pinterest in the living room on the big screen, which inevitably is going to drive better performance for advertisers. So I'm excited about bringing that reality to fruition because I think it's just a massive opportunity.

Tim Rowe, State of Streaming 15:51

Yeah, it's pretty cool. I hadn't really thought about Pinterest in that context before. And hopefully some of our listeners are now rethinking performance TV, rethinking the relationship between Pinterest, the path to purchase, and what that ultimately looks like as we do move towards a more visual future to your point earlier.

Paid Search CPMs Versus Targeted CTV

Tim Rowe, State of Streaming 16:10

These little one-by-one paid search ads. You know, I worked with someone not too long ago and we did the math. I don't know if you can validate this or not for me, but we did the math on paid search, and we wanted to kind of get back into a CPM. What's the CPM of a paid search campaign? And could you move some of that money maybe to the top of the funnel and make a case for it? The CPMs we came up with on paid search were kind of crazy. Like $70, $80, those are Super Bowl CPMs. Does that track or maybe I missed a zero there?

Jason Fairchild 16:41

Yeah, we can do some math. Like it's if you get a thousand impressions and you get a 5% click-through rate and paid search at $2.50. You can do the math on what it costs you to get a thousand impressions. And I think it's anywhere from like $30 in in certain categories to up to $100 CPM, and even more for like unique and high value categories. You can buy highly targeted TV ads for $15 CPM and sometimes lower and sometimes higher, but like you'd have no friction buying TV inventory targeted to a very set given set of users for a $15 CPM in that range, ballpark. So it's an incredibly cost effective and paid search very expensive for obvious reasons. The one thing, if you're in a, you know, if you're in a debt consolidation category, there's only so many searches in a given category. So as I mentioned earlier, TV will help drive more people into the intent category. And if you layer on Pinterest data and you're surgical about targeting people that have already expressed intent in a given category, then it's uh it's even more effective. And we've seen, we experience daily huge bumps in performance when you layer in Pinterest intent data to a performance campaign.

Tim Rowe, State of Streaming 17:50

Awesome.

How To Reach Jason Plus Watching Habits

Tim Rowe, State of Streaming 17:50

Jason, if folks want to learn more, where should they go?

Jason Fairchild 17:53

Shoot me an email at jason @tvscientific.com or you come to tvScientific, get send us an email, and uh we'll we'll get you connected.

Tim Rowe, State of Streaming 18:03

Excellent. We'll make it easy for anyone listening to get in touch with Jason, the email, the the website, the links will be in the show notes. Jason, what are you streaming right now? What are you what are you watching on TV?

Jason Fairchild 18:16

I um it depends. If um my wife and I watched you know Survivor and all the stuff that she likes to watch. Well the horses, what's it called? Wild horses, something. Uh wild horses, yes. Yeah, I like I mean that kind of thing. And then if I'm alone, I uh I always end up watching World War II or documentaries, really boring stuff.

Tim Rowe, State of Streaming 18:36

All right, so if you want to reach Jason, that's how you've got to target him. History channel. All right. Now we all know. Excellent. Jason, thank you so much for being here. All right, thank you.

Share The Show And Closing

Tim Rowe, State of Streaming 18:45

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