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  • Marketers like Airbnb and eBay are increasingly using scientific tests to run different ads across different segments of audiences, and then using the results to shift budgets accordingly.
  • Such tests help to measure incremental returns on a particular advertising campaign or even an entire media channel using test and control groups.
  • Facebook too is pushing the concept of measuring advertising based on its ability to drive business outcomes as an industry-wide initiative along with multiple third party researchers.

Airbnb has always relied on data to drive its marketing. But testing how well different ads perform with different audiences and on different platforms – and then ideally shifting budgets to the ads or tactics that were performing the best –wasn’t part of the marketing mix until two years ago.

Today, this kind of scientific ad tracking – which help to measure incremental returns on a particular advertising campaign or even an entire media channel using a test and a control group – are a standard practice at the short-term home rental brand.

“It’s important to understand with as much precision as possible how many extra dollars in booking value we bring to the business with each extra dollar we spend on a platform,” Airbnb’s Director of data science, Alok Gupta, told Business Insider. “It has become an increasing priority because we have a finite marketing budget want to maximize ROI.”

By comparing different results from ad campaigns delivered to distinct groups of consumers, Airbnb – like many big big brands – has been able to calculate lifts in ad performance and justify marketing spend on specific campaigns or channels.

This kind of testing is particularly potent on Facebook, given that it has rich sets of data on over 2 billion users across the globe (like their age and location) and is able to easily deliver different messages Read More Here