Conversion Attribution and the John Wanamaker Problem
- July 31, 2009
- by Rob Jackson
One aspect of digital marketing that has always stood out for me is accountability. The ability for advertisers to see where every penny was spent and if it worked was a clear advantage over the traditional marketing channels. For years now, great ROI and highly granular reports have allowed online marketers to prove the worth of their service while our old school marketing counterparts were left to eulogise about hypotheses and models that showed theirs.
The irony being that these traditionalists have been a catalyst for the digital marking industry to take a long look at itself. Imagine the following conversation to understand how:
New Media Marketer: Our Generic PPC campaign CPA is £200 and the Brand PPC campaign CPA is £50.
Traditional Marketing Manager: Well our target is £100 CPA so let’s cut the Generic campaign?
New Media Marketer: Bad idea because the Generic campaign drives traffic to the Brand campaign.
Traditional Marketing Manager: How much traffic?
New Media Marketer: Well um, we don’t know.
Traditional Marketing Manager: Well how many Brand campaign conversions had clicked on a Generic campaign ad previously?
New Media Marketer: Again we’re not certain but our knowledge of the purchase funnel means…
Traditional Marketing Manager: I don’t care about that – your metrics say the Generic campaign is over target so the budget gets slashed. Now where did I put the number for that TV agency…
These types of conversations have caused some serious soul searching in the digital world and brought us back with bump to the oldest adage in marketing:
“Half of the money I spend on advertising is wasted; the trouble is I don’t know which half” – John Wanamaker
It’s amazing to think of the changes the world of marketing since these words were uttered OVER A HUNDRED YEARS AGO and still it is a problem for the majority of digital marketers.
Giving the Whole Team Credit
For some time now most analytics packages work on “a last click wins” basis. CPA (cost per acquisition) or ROI (return on investment) are commonly calculated by crediting the channel that delivered the converting visit. For example:
Each of these channels can incur a cost to a marketer but under the Last Click model only the SEO will gain credit for the sale. This means that while the PPC, Email and Banner campaigns have contributed to the buying cycle process they have not been given any credit for doing so. How then can the person with the purse strings be expected to make the best decisions on budget allocation? I’m sure any premiership manager will tell you that the best strikers in the world are useless without the team effort to support them, and I’m equally certain he gives them a pat on the back when they do help out!
Solutions, Problems and Of Course More Questions
The other aspect of our industry I truly enjoy is the innovation; treading new ground all the time means you are always on your toes and constantly challenging what you know. So the good news is that there are now quite a few attribution platforms who claim to be able to resolve this issue for your campaigns. The bad news is that there is a) no industry standard and b) no perfect solution (Cookie deletion, multiple computers etc) – but there are benefits to deploying them – you just need to know which one suits your campaigns (and budget) the best.
First of all you need to decide which channels you want to track, not all solutions cover everything. Once you have that then you need to make sure you are asking the suppliers the right questions like:
- How is the service charged? Volume based models are common but may come back and bite you if you operate in low margin / high volume verticals like retail. I would recommend asking for a full forecast on cost before committing to a solution.
- Is There a Trail Product? If there is a hefty financial commitment it may be worth trying to get a trial period initially. A lot of suppliers offer 90 day introduction services or even better contract free services. At the very least make sure you get a full case study that is relevant to your product or service.
- How Complex is the Setup? Make sure you have a clear path to launch that satisfies all stake holders. If you use multiple suppliers for you different online channels you need to be certain that they can all deliver the required setup actions.
- Can Offline Conversions Be Included? There are some excellent methods for tracking offline conversions now available to advertisers. Likewise there are some that don’t work so make sure you have a clear understanding of how this can work for your business.
- How is the Output Data Presented? Information overload is something a lot of companies struggle with when using analytics. Reams of data but a bottleneck on how to turn that into actions that benefit your campaign. Some suppliers will send you an XML feed which is fine for a team of analysts but can your team handle that additional work load?
- How is the Attribution Modelled? So we know the last click model is flawed – what model do you then apply? Even distribution? Weighted towards the first click? Different weightings by channel? Who decides this? Are branded terms navigational or part of the funnel? How long is it before a Banner impression no longer affects a user’s decision process? More importantly how do you then turn this information into meaningful actions that that benefit your overall campaign?
Not forgetting these questions are just to start with! The point is that despite claims from some quarters that this problem has been solved, we are yet to see a clear industry standard. And with the pace that which the internet evolves who’s to know all of the currently available solutions won’t be obsolete this time next year? Let’s face it; Google is yet to weigh into this market (DART was there before Doubleclick was acquired), because we know how they like to innovate and it’s usually at a cost no one else can compete with!
Until then my advice is to speak to someone who has asked these questions in great detail already: there will be a solution that can add value to your campaigns finding that one quickly can be less than straight forward.
If you would like to know more about any of the following solutions then feel free to shout me on Twitter or via Latitude conversion analytics direct. Either that or be prepared for some lengthy presentations that may or may not be what you’re looking for:
Possible Solutions (in no particular order)
Atlas Engagement Mapping (Microsoft)
Eyeblaster
Double Click DART (Google)
Mediaplex Path to Conversion
Kenshoo Path 2 Conversion
Search Ignite
Core Metrics
Marin Software
ClearSaleing
DIGITAL MARKETING MATTERS
Ben Waugh
Where did you get your blog layout from? I’d like to get one like it for my blog.