AdExchanger Talks: The Behavioral Economist’s POV On Marketing Measurement

Host: Alison Schiff
Guest: Julian Runge, Assistant Professor of Marketing at Northwestern University
Release Date: May 6, 2025

1. Introduction

Alison Schiff welcomes listeners to this episode of AdExchanger Talks, focusing on advertising measurement. The episode features Julian Runge, a behavioral economist and quantitative marketing professor, who delves into the intricacies of marketing measurement and the underappreciated potential of gaming as a marketing channel.

2. Guest Background

Julian Runge shares his diverse background, highlighting his journey from leading analytics at Wooga, a German gaming studio, to his academic pursuits at Duke and Northwestern University. His expertise lies at the intersection of behavioral economics, user experience (UX) algorithms, and immersive media.

"When I'm not by a big body of water where I can do that, I walk a lot... my average step count for this year is around 13,000 steps a day."
— Julian Runge [02:38]

3. Gaming as a Marketing Channel

Runge passionately discusses the vast, yet underutilized, potential of gaming in marketing. He emphasizes that the perception of gamers has evolved, with mobile and casual games attracting a diverse audience across various demographics.

"Games now reach all kinds of audiences across age brackets, income brackets, and different other demographic or socioeconomic variables."
— Julian Runge [12:25]

Despite misconceptions, he points out successful brand integrations like Lego’s partnership with Epic Games, which saw a 26% surge in profits post-launch.

"Lego's partnership with Epic Games and Lego Fortnite was hugely successful."
— Julian Runge [14:55]

Runge attributes the slow adoption of gaming as a mainstream marketing medium to fragmentation in the gaming industry and the need for standardized ad formats and measurement frameworks.

"Gaming is heavily fragmented... it's inherently tricky [to integrate gaming into mainstream marketing]."
— Julian Runge [13:53]

4. Marketing Measurement and Experimentation

Transitioning to marketing measurement, Runge critiques the reluctance of marketers to adopt true experimentation despite its benefits in accurately assessing advertising effectiveness.

"Marketers often prefer to focus on what is in their control, like messaging and branding, rather than experimenting with measurement."
— Julian Runge [20:07]

He discusses organizational inertia and the disconnect between tactical and strategic levels within companies, which hinders the adoption of robust experimental methods.

"There’s a missing link... getting some of this knowledge that the people who are really in the market work with specific media has to make its way up to the senior levels."
— Julian Runge [21:24]

5. The Role of Market Mix Models (MMM)

Runge expresses his support for Market Mix Models (MMMs) as essential tools for comprehensive strategic overviews of marketing performance. He acknowledges their limitations, particularly in delivering technical answers, but values their ability to inform long-term strategic decisions.

"MMMs allow you a comprehensive strategic overview of how your marketing is doing."
— Julian Runge [31:25]

6. Incrementality in Measurement

Discussing incrementality, Runge emphasizes the importance of calibrating MMMs with experimental data to ensure accuracy and reliability. He references collaborative efforts with industry leaders like Meta and outlines methods for integrating experimental results into MMMs.

"Run experiments whenever you can and then you calibrate your MMM with that."
— Julian Runge [33:11]

7. Overcoming Barriers to Experimentation

Runge offers practical advice for marketers eager to embrace experimentation. He underscores the necessity of executive endorsement, building a culture that accepts failure, and integrating insights from tactical levels into strategic planning.

"You need an executive who actually sponsors this initiative... to make sure this knowledge gets built into the MMM that the central analytics team maintains."
— Julian Runge [28:39]

He also highlights the importance of distinguishing between causation and effectuation mindsets to remain open to data-driven insights.

"Develop heuristics to challenge your own preconceptions and earmark a portion of your budget to do more experimental stuff."
— Julian Runge [38:55]

8. Lightning Round Highlights

In a rapid-fire segment, Runge shares his enthusiasm for dwell time as an emerging metric, acknowledging its complexities.

"Dwell time is a really cool measure of ad effectiveness... there's an inverse U-shaped relationship between dwell time and ad effect."
— Julian Runge [44:27]

He also expresses a desire to see greater adoption of gaming as a marketing medium, urging CMOs to run branding campaigns in games to harness their full potential.

"Run a branding campaign in the game and measure it experimentally."
— Julian Runge [47:12]

9. Conclusion

Julian Runge concludes by advocating for platform-agnostic measurement solutions that are reliable and trusted across different media. He reiterates the untapped potential of gaming in reaching a vast, diverse audience and encourages marketers to integrate experimental approaches for more accurate and effective measurement.

"If I had the power to put something in the market, it would be a platform-agnostic measurement solution that's actually reliable and trusted."
— Julian Runge [47:42]

Alison Schiff wraps up the conversation, emphasizing the critical role of gaming in future marketing strategies and the importance of embracing true experimentation to optimize advertising effectiveness.

Key Takeaways

• Gaming as a Marketing Channel: With over 3 billion gamers worldwide, gaming presents a significant yet underleveraged opportunity for marketers. Successful integrations can lead to substantial profit increases.
• Importance of Experimentation: True experimentation allows marketers to rigorously assess the effectiveness of their strategies, countering organizational inertia and fostering a data-driven culture.
• Role of MMMs: Market Mix Models are valuable for strategic insights but should be calibrated with experimental data to enhance accuracy.
• Emerging Metrics: Dwell time offers nuanced insights into ad effectiveness but requires careful interpretation.
• Future Directions: Adoption of platform-agnostic measurement solutions and increased investment in gaming marketing campaigns are essential for maximizing advertising ROI.

Notable Quotes:

• "Gaming now reaches all kinds of audiences across age brackets, income brackets, and different other demographic or socioeconomic variables."
  — Julian Runge [12:25]

• "MMMs allow you a comprehensive strategic overview of how your marketing is doing."
  — Julian Runge [31:25]

• "Run a branding campaign in the game and measure it experimentally."
  — Julian Runge [47:12]

This comprehensive discussion underscores the transformative potential of integrating gaming into marketing strategies and the critical need for robust, experimental measurement techniques to drive advertising effectiveness.