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AggregateKnowledge-Media-Spend-Efficiency-Comparison-Feb2013Social vastly outperforms portals, networks, and exchanges in ad reach efficiency – a measure that refers to their ability to reach exclusive users at the lowest cost – finds a study [download page] from Aggregate Knowledge. The study, which analyzed more than 35 billion impressions across Q4 2012, found that social performs 2.8 times better than the indexed average on this measure. While exchanges were the cheapest channel when taking only cost into account, they dropped off when factoring in the ability to reach users absent on other channels.

Ads on social were also well above the average in their ability to consistently reach high-quality users. Aggregate Knowledge describes its “user quality index” as measuring “a channel’s ability to reach a user that can be marketed to consistently.” Social performed almost twice as well as the average in this regard, with portals (index of 108) also above-average.

The study also demonstrates that the value of social and portals are underestimated when using a pure last-touch attribution model, which is the most commonly used model. In other words, when using a multi-touch attribution model instead, social and portals see their value increase the most, while exchanges lose a great deal of worth given that they are predominantly in the lower funnel.

About the Data: For its quarterly report, Aggregate Knowledge (AK) compiled data from a representative sample of its customer base. This includes 530 campaigns, accounting for 70% of AK’s total impression volume and 84% of conversions across approximately 150 billion ad events.

The methodology for data collection, analysis, and reporting consisted of multiple steps. Data was collected through the AK “pixel” (or “tag”), which was then ingested by the AK Media Intelligence Platform (MIP) using AK’s proprietary Summarizer technology. AK’s team of data scientists then worked with the platform, querying the MIP for channel-based performance and cost data, as well as target ability, overlap, and exclusive reach metrics. AK also looked over the raw event data for converting users to see whether or not those users had seen an ad on a particular channel (or combination of channels) further upstream, providing additional insight beyond that exposed by last-touch attribution.

Data represented covered 500 different inventory providers across key vertical industries such as telecommunications, finance, retail, automotive, and consumer packaged goods.

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