Attribution modeling is one of the most intricate puzzles facing today’s marketers. In a digital world where offline touches still matter, how do we track the impact of all our marketing and sales activities to understand which areas deserve greater investment?
The story of misguided attribution modeling, like many of today’s marketing tales, begins and ends with data.
As marketers get smarter about data ROI, we’re beginning to realize how much data we leave untapped in our CRMs – data that can tell us a lot about our buyers’ behavior online.
Today’s always-on, digitally-savvy buying environment is run by data-driven decisions, and intuitive decision-making has fallen behind as an outdated tactic. Multi-channel attribution relies on this new paradigm, and forces marketers to become data-driven.
More often than not, we don’t use single-touch attribution models because we think they’re superior, we use them because our systems make tracking every touch a nightmare. However, as activity tracking becomes easier, multi-channel attribution is a mandatory development.
“Multi-channel attribution can help us understand why people buy from us, what happens before they buy, what prompts them to make purchase decisions or complete predefined goals, and ultimately determine the most effective digital channels for investment,” says Nick Necsulescu, Senior Manager of Customer Segmentation at TD Bank.
The wrong attribution model can lead to erroneous allocation of marketing budget, and poor campaign results.
So you think your onsite ads really convert leads with a single click? Or you think social media and blogging haven’t been making an impact on your business because you can’t tie them to revenue?
Necsulescu recently spoke at ClickZ Live New York’s digital marketing conference about why most marketers miss the boat with attribution: they rely on single touch models, rather than more accurate multi-channel attribution.
If you’re still stuck using an unsophisticated attribution model, you’re not alone, and it’s not too late to get back ahead of the curve. The majority of marketers employ a last click attribution strategy, which offers only a very simplistic view of your total marketing and sales efforts.
The Last Touch Attribution Model assigns 100% of credit to the last interaction. This is the model Adobe Omniture and Google Analytics use by default.
Most marketers don’t rely on last touch attribution because they think it’s the best model; they rely on last touch attribution because cracking the multi-channel attribution code is one of the toughest problems in modern marketing.
Necsulescu advises marketers to adopt an attribution model based on the reality that most deals touch multiple marketing activities before they close.
“Multi-touch attribution answers how much revenue or pipeline was generated for every dollar we spend on marketing programs. It gives us the framework to reliably know how our efforts affect sales and make better decisions based on that knowledge.” Excerpt from The Definitive Guide to Multi-Touch Revenue Attribution, by Brightfunnel
Assists happen when marketing and sales activity contributes to the conversion of a lead or opportunity, but doesn’t account for the last touch before close. A prospect might click a display before a sales call converts the lead to an opportunity, in which case the display ad would be the assist and the sales call would be the last touch.
Using this theory, Necsulescu proposes the following sample attribution equation, in which you can begin to see how a position-based attribution model operates.
Multi-channel attribution sounds great in theory, so what does it look like when applied to an actual pipeline?
Take a look at this sample conversion chart for a digital campaign from Necsulescu’s presentation at ClickZ Live New York:
In this campaign, 60% of last click conversions were actually assisted by another digital channel – more often than not, that channel was social media. It’s also noteworthy that every single channel contributed more assists than conversions.
“Comparing the last interaction and the click assisted conversion values we can quickly see which channels were being undervalued, and also which forms of advertising tend to lead to immediate conversion,” explains Necsulescu.
In today’s always-on, digitally savvy buying environment, the majority of conversions and sales aren’t single touch, and our campaigns shouldn’t reflect this falsehood. Rather than doubling down on a search marketing campaign, allocating a percentage of the campaign budget to social media could significantly lift the ROI of the campaign.
As we learn to better allocate spend and track attribution of marketing and sales activities, we can run informed multi-channel marketing campaigns that perform across the board.