John Wanamaker was a Philadelphia merchant. He invented the price tag; placed the first half-page retail newspaper ad and, from the quote above, provided the genesis of marketing attribution.
Attribution is the science of assigning credit or allocating dollars from a sale to the marketing touchpoints that a customer is exposed to prior to their purchase.
Marketing organizations are more eager than ever to prove the value of their campaigns and show what worked or didn’t; 73% plan to increase spending on marketing analytics over the next three years, according to The CMO Survey; 86% for companies with $1 billion to $10 billion in revenue. Marketing attribution is a hot topic.
Is marketing attribution the Holy Grail or just smarter marekting. Here are 8 steps that demystify marketing attribution.
- DEFINE DESIRED RESULTS: The goal of attribution is to assess the value of each marketing touchpoint so you can spend more effectively. It begins by first defining success on your terms. Keep it simple. Ask yourself, who are my best customers? Then ask, what are my objectives with that customer? You may choose to increase spend and solidify loyalty with your highest-value customers. Or, you may choose to determine where you can find more high-value customers just like them. But it’s up to you, and what’s right for your organization.
- UNDERSTAND FIRST TOUCH VS. LAST TOUCH: By looking at just the last touchpoint(s), too much weight is put on the closing sources. This can undervalue the awareness channels, especially awareness channels like social media and brand advertising. Map out the sequence of what you think are the touchpoints. Because, if you don’t, you’re not doing marketing attribution.
- PICK THE RIGHT ATTRIBUTION MODEL: There are four different types of attribution models: 1) Online-Offline Attribution that determines the impact of digital marketing channels on offline marketing channels and vice versa, 2) Multi-Device Attribution that determines how different devices work together to create conversions and how the credit for conversions should be distributed among different devices, 3) Multi-Channel Attribution determines the impact of multiple digital marketing channels (paid search, organic search, email marketing, direct traffic, referral traffic, display advertising etc) on conversions and 4) Real World Attribution, the newest attribution model, takes into account that, in the real world, customers can go back and forth between online and offline marketing channels or they can go back and forth between tablet and desktop depending upon what stage they are in their purchase process. Choose the model based on the desired results you defined.
- GET INTERNAL GROUPS INVOLVED: Once you’ve picked the right model, you’re going to need to know what data exists, what are the measurement periods, how often the data is collected, when it is available and who is responsible. This requires careful coordination and collaboration between people and departments. This a also great way to bring internal groups together on an important topic to your company and motivate them by being part of something that is an important step for the organization.
- CONNECT THE DOTS BETWEEN ONLINE AND OFFLINE: With advancements like Universal Analytics from Google Analytics, marketing attribution on your website is relatively easy to implement and low cost. But, for many companies, Online-Offline Attribution is one of the most vexing problems because online is just a part of the problem and the purchase process begins and ends offline. There have been advancements in Online-Offline Attribution Model and platforms like Datalogic, Adometry and LiveRamp are examples of companies that are leading the way.
- INTERROGATE ATTRIBUTION VALUES: To determine how to spend marketing dollars most effectively, attribution models determine the value of each touchpoint, generally by a percentage. These values are a lynchpin in the decisions that are made to make sure that marketing dollars are spent most effectively. One way to interrogate attributions values is to ascribe what you think are the values yourself, compare them to the results from the model and dig in to the differences.
- TEST, TEST AND TEST SOME MORE: Even if you somehow manage the perfect attribution scenario, you’ve got work to do. As with everything else in marketing, nothing replaces testing. Those clicks could be more valuable with better ad copy; that conversion rate from a mobile click to a desktop search could be boosted by a sharper product image or more streamlined lead generation form. The goal of attribution, is to assess the value of each marketing touchpoint so you can spend more effectively. But that doesn’t inherently increase the value of those touchpoints; that’s still on you and your team.
- DON’T IGNORE CUSTOMER LIFETIME VALUE (CLV): The Pareto Principle states that, for many events, roughly 80% of the effects come from 20% of the causes. CLV (Customer Lifetime Value) is a prediction of all the value a business will derive from their entire relationship with a customer. If you rely only on single-conversion events as the ultimate goal, upstream clicks get undervalued and the value of your decisions over time might not be as effective as they could be.
Did this demystify marketing attribution for you? Does your company need guidance with marketing attribution? How would John Wanamaker use marketing attribution today if he was still with us?