Johnson and coauthors Randall Lewis of Netflix and Elmar Nubbemeyer of Google have developed a methodology that makes testing ad effectiveness much easier—and less costly.
Marketers who want to know how effective their ads are need to know how consumers would behave had they not seen the ads. To set up the comparison, the team developed a methodology called ghost ads, which identifies the control group counterparts of the exposed consumers in a randomized experiment.
“A ghost ad is a log that tells us when an ad from the experiment would have been shown to a user in the control group,” Johnson says. “The control group user still sees the ad she would have seen if she weren’t in an experiment.”
Until now, the best way for an advertiser to measure ad effectiveness was to pay to run a public service announcement in place of its ad, creating a control group of viewers. But running PSAs is problematic, Johnson says.
“Companies are reluctant to run PSA experiments as a matter of normal business practices. It’s expensive,” he notes.
With ghost ads in place of PSAs, the control group user sees whatever the ad platform chooses to deliver when the treatment ad is absent. The aptly named ghost ads make the experimental ads visible to the ad platform and experimenter but invisible to users in the control group. Users see a variety of competing ads rather than a single PSA. Ghost ads do the work of a PSA without the associated costs and are compatible with performance-optimizing ad platforms.
In one of their experiments, with an online retailer’s display retargeting campaign, the campaign lifted website visits by 17 percent and purchases by 11 percent.
The methodology could revolutionize ad effectiveness measurement, Johnson says. More than a hundred advertisers now use ghost ads on Google each month, and 100 million of the ads are loaded every day. It also has the potential to be broadly used by companies that sell banner ads and search ads, and could be applied to targeted radio and TV ads as well.
“If you’re a CMO right now it’s very hard to say credible things about the effectiveness of advertising,” Johnson notes. “Ghost ads can improve the credibility of your marketing organization by allowing you to calculate the return on your ad investment.
“Thinking big picture, the potential is really enormous,” he says. —Sally Parker