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Are dying cookies giving you ROAS indigestion?

By MarketDial / Aug 17, 2022

How MarketDial, an in-store testing start-up, has become the best poised to lead companies through the loss of third-party cookies with geo-testing.

Morgan Davis, MarketDial CEO and Co-founder

A well-known fairy tale by Hans Christian Anderson tells of an emperor who replaced his nightingale with an ornate, mechanical bird. But as the mechanics wore down, and as the emperor became bedridden, it was the real nightingale’s song that restored the emperor to full health.

In a similar fashion, the evolution of retail testing syncs with this idea of a natural bird finding its voice again after having been temporarily replaced by that of a shiny, e-data bird.

For hundreds of years merchants acquired data primarily via categorization and observation. They would focus on a particular geographic region, target that group, and then note the changes in the outcome to see if their approach was producing the desired results. Television ads would run in one location but not another. Catalogues would be mailed to relevant genders.

And then the internet happened.

Computers could now assimilate and track information about individual consumers’ online behavior – where did they each shop; what did they each buy? When they received a coupon, did they use it? Online A/B tests could easily determine if something as simple as changing the color of a button could improve sales. E-commerce retailers could then use this information to target individual preferences and influence online purchase behavior.

For a season, it looked like brick-and-mortar retail was fatefully marching to its doom, supplanted by the golden age of online retail – the sheer amounts of data accessible to online retailers seemed to give them a significant advantage over their in-store counterparts.

But while the individuated data was excellent for vendors, consumers began to feel their privacy rights impinged upon. Stories began to emerge of teen pregnancies being disclosed to parents via targeted advertising. Documentaries on social media algorithms started to illustrate how biases could be exacerbated in the echo chambers of consumer preference.

Unfortunately, a disgruntled consumer is not a loyal consumer, and with mounting privacy violations, the bejeweled online consumer data machine started to wind down its glory run.

Throughout this online bruhaha, brick-and-mortar testing tech remained relatively static. If a retailer needed data insights, their go-to method was often to pay a premium for business consultants. The consultants generated great prospective insights, but without an easy way to test their recommendations, retailers were still making million-dollar decisions based on relatively hypothetical information. They were investing in initiatives without knowing if their investment would produce a definitive, proven lift in revenue.

MarketDial realized that brick-and-mortar retailers needed access to the same high-caliber data that online retailers had. Consequently, long before Google, Apple, and Facebook all declared death to third-party cookies, MarketDial was trying to solve the problem offline retailers faced in having deficient data for their in-store initiatives.

In the offline space, there weren’t any cookies to rely on, and the cost of change implementation was – and still is – exponentially higher with physical retail, making the stakes for under-informed decisions also much higher. But if you cannot look at data on a person-to-person level, what is the best way to determine consumer behavior?

For MarketDial, going back to the foundation of geo-focused testing was the solution. We built an app around how to pick the best geo-location for the test/control and how to measure it on a geo-level. Many of the current online A/B test companies are great at all things related to cookies, but now that cookies are disappearing, how are they going to collect the data you need? Their platforms were not built for geo-testing.

There’s another piece to this, too, which is that we know brick-and-mortar and e-commerce do best when they synchronize to support the overarching business. Omnichannel is the most common term for this integration, but strategic retail advisor Steve Dennis prefers the term Harmonized. In his book Remarkable Retail he notes:

“Harmony means two or more notes, played at the same time, that create a pleasing sound. . . . To be remarkable, it is not enough to merely integrate or unify all the component pieces of an often complicated path to purchase for the different customer segments we wish to win, grow, and keep. They all have to sing beautifully together.”

MarketDial is currently leading the charge on the brick-and-mortar side of the business, providing in-store testing data to retailers. Our platform has helped companies create cultures of testing, unifying company-wide initiatives and maximizing outcomes and ROI. Now it is poised to integrate geo-testing for e-commerce, creating a systemic, seamless harmonization of data across a company.

Our harmonized clients already are ahead of the game, using MarketDial to assess how online initiatives impact in-person purchase behavior among different geographic regions. We’ve had clients run digital advertising campaigns and test how those campaigns drove traffic to specific stores. They’ve also bought search terms that come up high on a particular holiday and have seen a significant ROI from geo-targeted advertising. In these ways they’re able to test and learn where the digital market correlates to physical, in-store sales, thereby supporting omnichannel cohesion.

As third-party cookies fall by the wayside, many retailers are terrified. They no longer have means to track the Return On Advertising Spend (ROAS). And online testing platforms don’t have a definitive methodology to fill in for that loss. Like a bedridden emperor, companies are wondering how they can function when their e-data bird will no longer sing. But the tried-and-true marketing methods of geo-testing, combined with our evolutionary testing algorithms have the potential to harmoniously save these companies from the brink.

For more insights into how testing can support your retail initiatives, read here:
Maximizing the value of testing for your stakeholders
Actionable insights: taking test and learn to the next level
Unlock the value of your data with A/B testing