The quote "If you can't measure it, you can't manage it" is often attributed to Peter Drucker, one of the great business minds of the 20th century. In pursuit of that ideal, eCommerce practitioners have been laser-focused on collecting as many data points as possible: clicks, conversion events, impressions, ad views ... ad nauseam.

However, marketing's impact extends far beyond these directly measurable interactions. Think about any billboard along the I-95, or any other highway—how do any of those brands know if their billboard is working? And how does a brand marketer measure the impact of that billboard across all the Walmarts, Targets, and Safeways in the ZIP code?

Most marketers know instinctively that the billboard has positive impacts on these retail channels, but aren't quite sure how to quantify them. This is where the halo effect comes into play, representing a crucial yet often overlooked aspect of marketing measurement.

What is the Halo Effect?

The halo effect is the phenomenon where a user's exposure to your brand through one marketing effort indirectly leads to a conversion elsewhere, even if that subsequent conversion isn't directly attributed to the initial campaign.

Think of it like this: you see a compelling video ad for a product on TikTok. You don't click through immediately, but the brand name sticks in your mind. Later, you might search for that brand on Google, and eventually decide to purchase the product the next time you see it on Amazon.

Most marketers would look at the direct conversions on the campaign (looking at the TikTok-attributed conversions on their Shopify dashboard) to understand the impact of that ad campaign, but ignore the customer journey we illustrated above.

And Amazon Analytics would probably attribute that sale to Google Search, not the TikTok ad that you saw. This indirect impact from the "glow" surrounding your ad campaigns is the halo effect.

Platforms/Marketplaces Most Likely to Feel the Impact of Halo Effects

While the halo effect can manifest in various ways, certain platforms and marketplaces are particularly of interest to eCommerce brands—it essentially boils down to the availability of the brand on these platforms and the amount of data sharing (or lack thereof) that occurs between these platforms, retailers, and brands.

Amazon:

Often, upper-funnel marketing activities on platforms like Meta, TikTok, and YouTube can significantly impact sales on a brand's Amazon store. A user might discover a product through a social media ad but prefer the convenience or familiarity of purchasing it on Amazon. This cross-platform influence is a prime example of the halo effect.

Retail Channels like Walmart and Target:

The halo effect can also extend to other online marketplaces like Walmart or even the physical retail stores of these retail giants. A strong online presence and effective digital advertising can build brand recognition and drive customers to seek out products on various sales channels.

How to Measure the Halo Effect

The key to halo effect measurement is rigorous incrementality testing. This is rooted in the scientific method—you choose two similar geographies (by historical performance), and run ads on one group, while withholding those ads from the second.

You then compare performance between both groups across all relevant sales channels (Amazon, Walmart, DTC, to name a few).

This methodology allows us to safely determine that the ads caused the increase in performance (if any) in the group that was shown the ads.

How Understanding the Halo Effect Can Alleviate the Over/Under-Reporting of Various Channels

Traditional attribution models often struggle to capture the intricate web of interactions that lead to a conversion. By understanding and measuring the halo effect, marketers can gain a more accurate picture of channel performance and avoid critical misinterpretations:

Accounting for the Under-Reporting of Upper-Funnel Channels:

Platforms like TikTok are often effective at generating awareness and interest (upper-funnel activities). However, their direct attribution might not capture the downstream conversions they influence on other platforms like Amazon or a brand's own website.

By measuring the halo effect, marketers can recognize the true value of these upper-funnel channels and avoid underinvesting in them based solely on direct conversion metrics. For instance, a lift test might reveal that a TikTok campaign significantly boosts Organic Search for the brand, indicating a strong halo effect that traditional TikTok attribution would miss.

Providing a More Accurate View Than Platform-Centric Attribution:

Ad channels' self-attribution only considers touchpoints within their own platform, neglecting the broader customer journey. This inherently misses the halo effect on other sales channels. Understanding the halo effect allows marketers to see the bigger picture and recognize that a campaign's success shouldn't be judged solely on the conversions reported within a single platform.

Complementing Attribution Tools on Amazon and Walmart:

Marketplaces and retailers provide attribution and analytics tools to merchants—not unlike those that you'd find on Shopify. The same problem remains—these models are heavily reliant on measuring clicks instead of focusing on the true causal relationship between an ad impression and a purchase. Introducing halo effects into your measurement mix alleviates that issue.

Conclusion

The halo effect is a vital concept for a holistic understanding of marketing effectiveness. By recognizing and measuring the ripple effects of our campaigns across different platforms and channels, we can move beyond the limitations of single-platform attribution, gain a truer sense of each channel's contribution, and make more informed decisions to drive sustainable growth.

Ready to measure the halo effect of your ads and measure their true impact? Book a demo with WorkMagic here.