Most of us recognize that consumer “path to purchase” or “decision journey” has changed. The introduction and continuing evolution of new media and new technology is a game changer. As we rise to the challenge of implementing an omnichannel marketing approach, another challenge soon rises to the top. How do we effectively measure or attribute marketing success when there are multiple channels and touchpoints?
Why is Marketing Attribution Important? If you are using multiple marketing channels, marketing attribution will provide answers to two very important questions:
- What is working?
- How do I allocate my budget?
Analytics have always been vitally important to us as marketers and have historically been focused on individual channel performance. Over the last few years, the relative ease of collecting and analyzing data in digital channels has put a focus on channel attribution as a method of determining the role individual channels play in influencing the customer journey. This is important to our clients because it’s a more insightful way to allocate limited budgets across the multitude of options available to them. It’s important to us as an agency because, like most agencies, we are often not executing all components of a campaign. And obviously, we’d like to get the credit we deserve and have the information we need to make adjustments as a campaign continues.
The last interaction before purchase is often on a digital channel, which has led even those using an attribution model directly to the reliance on last-click attribution or assigning all of the credit for success to the last interaction a customer has with the brand before the purchase event. These results, along with the lower CPA and higher ROI that digital channels can often show, may direct marketers to overly rely on digital efforts. For example, by overvaluing some channels, tactics such as direct mail may be cut in favor of email because it is less expensive.
Companies may give their digital marketing all of the credit for their multi-channel approach and pour more of their money into digital, only to see their profits and sales fall. While digital is an important component of all campaigns we undertake, it’s important to remember that digital results often benefit from a multi-channel approach. So, the last channel is only part of the picture.
Due to the structure of many organizations, including many of our large clients, data tends to be siloed by channel into working groups. This further reinforces the tendency to plan and evaluate campaign components in a head to head point of view, rather than as an integrated campaign. And rather than looking at revenue growth as an indicator of success, we tend to look at the efficient spend of budget by channel.
What Sales Funnel?
Marketing is about inspiring the customer to take an action. We’ve gotten good at getting consumers to take the FIRST action (getting them into the traditional sales funnel), but today’s consumer is no longer taking a linear path from that First action to the Last action (purchase).
Mobile, social and the omni-channel customer experience have changed the way people interact with brands and buy products and services. There are more ways for consumers to have a say in brand interaction – they want information and support in multiple places to help them make the right buying decisions.
As a result of this shift, the accepted sales funnel has changed and there is no longer a linear path to purchase.
People jump in and out of the sales funnel on the way to deciding to buy. This makes marketing more complex as well, requiring digital, traditional, online and offline strategies to work together.
The customer decision journey is now circular with 4 primary phases
- Initial consideration set (what brands are being considered in the sales cycle)
- Active evaluation (research and product comparison, online, reviews etc.)
- Closure (buying or applying)
- Post-closure (focus is on the customer experience to create loyalty)
The omni-channel customer experience requires multi-channel marketing touch-points to be successful.
What Gets Credit?
As marketers we’re pretty good at promoting and measuring the First action and the Last action. Last or first touch attribution are the easiest ways of looking at the success of marketing channels, but the results over value one channel and undervalue others including the middle touches.
It’s this more complex middle of the journey that presents the biggest challenge to us as marketers as we not only try to spend our budgets in ways to get the best results, but also to respond to and prompt continued customer actions. Keep this in mind as you consider the various attribution models.
Which Model is Right for Your Business?
Attribution models range from simple to complex and choosing the right one depends on your customer customer’s journey, the number and types of channels you use and other sales factors. Following are 7 types of attribution models:
- First-Touch Attribution – credit is assigned to the first marketing touchpoint
- Last-Touch Attribution – credit is assigned to the final touchpoint that precedes a sale or conversion
- Linear (Even Weighted) Attribution – each touchpoint in the conversion path shares equal credit
- Time-Decay Attribution – the touchpoints closest in time to the sale or conversion get most of the credit.
- Algorithmic Attribution – assigns data-driven conversion credit across all touch points preceding the conversion, and uses math typically associated with predictive analytics or machine learning to identify where credit is due.
Each type of attribution model has pros and cons. It is important to do your research and take these into consideration.
The omni-channel consumer requires us to move beyond a siloed, channel specific and last-click oriented way of analyzing marketing data. Companies who have adopted advanced attribution and non-siloed analytics structures are quickly developing a competitive advantage because they are better able to see how their tactics work in concert, across channels, online and offline, and to better predict and encourage consumer behavior over time. Thinking beyond traditional metrics to advanced attribution and integrated analytics will promote growth in revenue.