Performance marketing insights, discussions and expertise

#2012Marketing Challenge 8: Adopting Attribution Reporting

By on November 7, 2011

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Tracking marketing campaigns used to be easier — TV, radio, and print were the three primary media channels and if people came to your store, or ordered from your catalog, it was relatively easy to trace their purchase path. These days, customers come to us from a myriad of sources: display ads, QR codes, email campaigns, media partner sites, TV ads, comparison shopping engines, organic search, PPC ads, etc.

Attribution reporting is a relatively new technology designed to help you understand the many different ‘touch points’ that consumers have with your brand.

(Source: Blitzagency.com)

Rather than focus on the last click (the click that brought the conversion such as a email sign-up or shopping cart purchase), attribution reporting assigns partial values to different and overlapping marketing touch points that your customers interact with across the sales funnel as they move from awareness through to conversion. Here at Impact Radius we refer to this as the Customer Journey.

Companies that implement attribution reporting typically see an 18% to 26% increase in ROI on their marketing spend. With such a significant improvement you’d think that companies and digital marketers alike would rush to install an attribution reporting solution. Well — not exactly. In fact, only 24% of companies have adopted attribution reporting.

Even more troubling, paid search advertising (PPC) and SEO still retain the lion’s share of online marketing budgets—despite the fact that our customers are being influenced by a combination of social mentions, display ads, offline marketing, promo codes, and traditional marketing channels such as TV and radio.

Paid-Search-PPC-Share-of-Online-Marketing-Budget

This is the fundamental problem of last click attribution – it unfairly assigns conversion credit to the last referral (click) source and completely discredits your other channels for their part in the sales funnel. Don’t you think the television ad that first introduced the customer to your brand should be given some credit? Attribution reporting gives us a better view of the entire purchase path and shows how our customers are influenced by a combination of channels and marketing messages.

So why the low adoption rate? From a complex marketplace to a shortage of expertise in advanced tracking and analytics, there are a lot of barriers to finally deciding on an attribution solution. Here at Impact Radius we have been talking to our clients and have come up with some of the challenges associated with attribution reporting adoption.

The basics of attribution—how and why it works
Attribution reporting, while innovative and technologically sophisticated, is really just a scientific way of measuring a classic suspicion of marketers. That is — people rarely buy in one step. In fact, the sales funnel is long, complex, and often requires a customer to experience multiple ad impressions, direct marketing influences, offers, and a specific level of brand recall before they’re ready to pull out their credit cards and commit to a sales or conversion.

Using sophisticated tracking technologies, and a system of attribution modeling (assigning weighted values to each media touch point) attribution reporting digs beneath clicks and traces your customer’s entire journey through the sales funnel.

customer_journey_single_row

This might involve, for example, using a unique tracking value in your print ads that then allows you to locate the referral source for a given customer as they enter into your sales funnel. After that, you can trace the different keywords the customer uses as they research your company on Google. Next, you can trace the different banner ads they see across a multitude of sites, and even measure the influence of a promo code distributed across social media and finally measure the influence of the email offer that invoked the click leading to the conversion.

With attribution reporting, the goal is to factor in every marketing tactic you use—from offline to online—and to see exactly your highest yielding channels, as well as the interaction and partial values of each channel. After you know your highest performing channels, you can prune the ineffective channels and re-allocate media spend to the channels helping to drive conversion.

Does it actually work?
Online marketing is advancing beyond search and SEO. While social media and display have been seen as low converting channels, attribution reporting is revealing a different picture.

Atlas Institute, for example, found that 44% of sponsored search clickers are exposed to display ads prior to the click. Atlas also found that 71% of sponsored search clicks are navigational in nature. As traditional last click web analytics are focused on clicks and conversions, marketers need more robust reporting to see the entire customer journey from awareness to conversion.

Another Atlas Institute study, which was commissioned a few years back, found that users who clicked on sponsored search and were exposed to a display ad from the same advertiser, on average, converted 22% more often than those users who only clicked on sponsored search only. This means that attribution is helping to show the relationship between the often nebulously measured effects of branding campaigns on driving sales.

As Google puts it:

“When a customer buys or converts on your site, most conversion tracking tools credit the most recent link or ad clicked. In reality though, customers research, compare and make purchase decisions via multiple touch points across multiple channels. So marketers that measure return solely on the last channel that a customer touches before conversion are getting an incomplete picture, and potentially missing out on important opportunities to reach their customers.”

With multi-channel attribution, you are tracking all of the user ‘touch points’ at a much more granular level. The result is a holistic picture about the complex and overlapping interactions between your different media ‘touches.’

So where to start?
While attribution has some attractive benefits, it is not an easy purchase. One of the largest challenges in adopting attribution reporting (and subsequent media planning based on true attribution) is that the subject alone is an advanced topic. This is not your standard pasting of a snippet of code into your order confirmation pages. Attribution reporting is designed for complex, multifaceted marketing campaigns and as such requires expertise in the space.

Another major challenge is that there is no magic formula, or best practice, for figuring out the ideal combination of media events. Customers do not travel along the same purchase path—and there are complex factors vary from industry to industry and company to company. As such, creating your attribution model is more or less an educated guess – a stab in the dark.

A market leader, for example, might benefit more from investing in branded keywords, SEO and drive-time radio prompts (as they have high brand recognition) whereas an emerging leader may have to invest more in social media campaigns, display ads, and digital coupons.

In other words, attribution isn’t a magic pill. It still requires innovative campaigns, testing, and experimentation to optimize your attribution model and increase ROAS.

For example, knowing that mentions of your brand on TripAdvisor.com prompt more clicks on your display ads can help a travel company better optimize their ad spend by shifting resources away from SEO and to invest more heavily in display. The challenge is figuring out what a successful campaign looks like and establishing benchmarks.

So who to choose?
Unfortunately, the marketplace for attribution reporting is relatively nascent and quite complex. It’s comprised of dozens of solution providers with widely different attribution methodologies, technology approaches, and features sets. As a new marketplace, few companies have clearly positioned themselves and marketers are left to decide whether they need, for example, a more web-orientated analytics solution or whether they should invest in a comprehensive offline and online tracking solution.

Add to this a lack of standards for attribution reporting, and privacy concerns with cookie-based tracking systems, and it’s easy to see why marketers are hesitant to make the jump from traditional web analytics to a more robust level.

But as digital marketing budgets increase, marketers will have to be able to justify their investment in channels. As of right now, search and SEO are able to show that they drive the majority of sales—but as marketers become more sophisticated in the online space, we know that we need to understand a more complete picture of how different channels are working together to drive clicks and sales.

Adopting Attribution Solutions Coming Soon
Subscribe to Impact Radius’ RSS feed and stay tuned for our solutions report designed to help you overcome the challenges with adopting attribution reporting and other digital marketing challenges predicted for 2012.

In the meantime, if you’d like to learn more about how Impact Radius can help you accurately track and control multi-channel campaigns, or if you just want some free advice, message us on Twitter or drop us a note at contactus@impactradius.com.

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