The Marketer s Guide to CROSS-CHANNEL ATTRIBUTION
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- Garey Golden
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1 The Marketer s Guide to CROSS-CHANNEL ATTRIBUTION
2 CONTENTS 1. Executive Summary p2 2. Introduction p3 3. What is Attribution? p4 4. Why do you need Attribution? p5 5. Attribution Models p6 6. What is the Ideal Model? p7 7. What do you need to get started? p9 8. Summary p10
3 1 EXECUTIVE SUMMARY The world of consumer activity is changing. 75% of visitor conversions happen over multiple visits (Google, 2016), and according to Google, 90% of multiple device owners switch between screens to complete tasks - using an average of three different combinations each day (Google, 2013). Factor in that, in 2012, there were an estimated 5.3 trillion online advertising impressions alone (ComScore, 2013) and you begin to realise that the customer journey to conversion now spans across multiple channels, devices and sessions. This advent of multi-touch digital engagement has rendered out-of-the-box attribution models less effective, and led to a rising cost of customer acquisitoin. As a result, there is now a widening gap between these traditional approaches and the reality of planning cross-channel campaigns. Exciting new ways to capture customer interactions, and assign true value to marketing activities have emerged to counter these complexities, and this Fospha whitepaper will discuss how marketers can transform their attribution modelling in order to win in this changing climate. 2
4 2 INTRODUCTION Most brands have a multi-channel stratey to engage customers. And every channel provides marketers with a unique understanding of these customers. Take, for instance, a social media marketer. When they post content on a social media platform say, Facebook their decision is often based on how their audience responded in the past. For instance, did more customers like post A or post B? Did post C or D result in more immediate conversions on the company website? Whilst it is possible to incrementally increase the effectiveness of social media engagement by asking these questions, and tailoring strategy to them, marketers still lack a total understanding of what is driving performance, by nature of the fact that channels are viewed in isolation. They now have to consider, for example, whether customers preferred Facebook post A because of a previous viral video camaign or, why post C generated an increased click-through rate, but retargeting did not. The problem is the same whichever way you cut it marketers just aren t able to decipher how one marketing channel influences another. As a result, campaigns continue to be suboptimal, and cross-channel stategies are hindered by a lack of understanding of the customer journey. It is therefore no surprise that CMOs and other marketing leaders are so focused on establishing a single customer view, to truly calculate how each of these touchpoints contribute to conversions. 3
5 3 WHAT IS ATTRIBUTION? Marketing attribution is defined as: The practice of determining the role that any given channel plays in informing and influencing the customer journey. (Econsultancy Marketing Attribution Management Buyer s Guide) When marketers don t make attribution a priority, they often fall foul to issues such as: Lack of crosschannel view Inefficient allocation of resources Inability to understand the true cost of customer acquisition Inability to understand customer LTV Lack of trust in the data Marketing channel misspend However, when done correctly, attribution provides holistic and accurate information about the financial return the business s activities are delivering; allowing them to adjust what they are doing and utilise their budget to deliver more value to the business. 4
6 WHY USE IT? 4 1. JUSTIFY SPEND Marketers can struggle to attribute their spend accurately, and to show that what they re doing is right. Attribution modelling gets them one step closer to understanding, and proving, that they have the most optimal mix of digital activities and campaigns. 2. OPTIMISING UNPRODUCTIVE SPEND Attribution modelling provides a window that allows marketers to critically analyse what activities are contributing to conversions, and to understand which don t have any revenue value. With this knowledge, they are able to cut or change a programme, campaign or bid to reduce inefficient spending UNDERSTAND WHAT A CUSTOMER COSTS Multi-touch attribution modelling assigns credit to marketing channels in the most accurate way possible, leading to an increased understanding of cost of acquisition, retention and, when a multi-touch model is used, lifetime customer cost. 4. PLANNING CAMPAIGNS ACCORDINGLY Having granular detail on how your campaigns are performing provides marketers with the necessary insights to drive smarter marketing decisions. Understanding the relationship between two channels, such as Facebook display ads and Google AdWords, allows marketers to reallocate the necessary time and resources more effectively. 5. IMPACTING ROI EXPONENTIALLY The gains from attribution can be considered two-fold. Marketers are able to gain an increased understanding of their business performance and, from here, can take the appropriate actions to make the necessary changes - the outcome being an increase in conversions and ROI. 5
7 ATTRIBUTION MODELS 5 In order to gain a complete understanding of why marketing channel attribution is so key to marketing success, it is important to take a step back and examine how the various models work - and why they are being left behind. SINGLE-TOUCH: MULTI-TOUCH: Simple models that work from arbitrary metrics. Examines all known touchpoints and determines the value of each according to the chosen model Last click: This model assumes that the final touchpoint was the only influence on the conversion, and assigns no value to all previous touchpoints in the customer journey. Linear: This model assumes that every interaction in the customer journey has equal influence on the buying decision. The equivalent of giving everyone first prize in a race... First click: This model assumes that the first interaction was the only influence on the user and attributes no value to the interactions that follow. Position-based: This model attributes value to specific parts of the customer journey relative to where the touchpoints came. It gives greater weight to the first and last interactions, and splits the left-over value between the remaining touchpoints. Last Adwords click: This model assigns 100% of the conversion value to the last AdWord that was clicked. Time decay: This model adjusts credit so that the touchpoints closest to the conversion get the most amount of credit, with value reducing the farther back in time the conversion. The above, out of the box models, don t reflect the realities of marketing attribution. So what should marketers be using...? 6
8 6 WHAT IS THE IDEAL MODEL? Data-driven attribution modelling: The allocation of partial value to different touchpoints within the customer journey, which have influenced a sale or another desired outcome. (Econsultancy Marketing Attribution Management Buyer s Guide) Single-touch models are a good starting point for attribution modelling, and whilst clever multi-touch models - such as position-based or time decay - provide flexibility in valuing many interactions, they still fall short because they view each touchpoint as a singular, isolated event. In contrast, data-driven attribution models offer a degree of flexibility that other contenders lack. They use your consolidated customer data to build a truly analytical model, that captures every possible variation of cross-session and cross-channel activity at a granular visitor level. These adaptive models do not arbitrarily weight channels, but instead assign real value, by looking at all visitor data, and critically learn over time, as more data is collected, to determine the real value that each touchpoint has played in a conversion. 7
9 I want to remove a Facebook ad - what is the likely effect on conversions? This data-driven model uses machine learning and predictive modelling to understand the precise impact of cross-channel interactions. To calculate the probability that any single touchpoint contributes to a conversion, a marketer can remove that channel and monitor the drop in conversion, to attribute the right value. If Customer A has a tendency to click a Facebook ad, before returning to the website through a Google search, what is the weight of each channel? Data-driven models also take into account the impact of each channel on the others determining the probability that a user will transition from one step to another, based on the steps that they have previously taken. 8
10 7 WHAT DO YOU NEED TO GET STARTED? 1. INTEGRATED APPROACH Data integration is the key to fixing attribution (Himanshu Sharma), and companies looking to solve the attribution conundrum need to put data at the centre of their strategy. A Customer Data Platform consolidates a company s customer data from marketing, sales and service channels breaking down data silos - to provide you with a single customer view and granular detail on how your customers move through your channels; enabling marketers to take relevant, intelligent actions. 2. ACCOUNT FOR ALL YOUR CHANNELS Ensuring you are set up to capture all customer activity both online and offline is key to accurate attribution. Time should first be taken to ensure that every step in the customer journey is being tracked appropriately, and in a manner most conducive to attribution modelling. In doing so, companies ensure that they are using 100% of their data in their attribution solution resulting in more accurate analysis. 3. CROSS-FUNCTIONAL COMMUNICATION Teams working in a siloed fashion hinder the success of attribution modelling. Whilst getting the right people on board is undeniably crucial to success, ensuring that disparate teams work together is also key. Investing the time and effort into bringing these individuals together creates a more complete picture of the data and available resources helping ensure that attribution benefits all parties across the business. 4. IMPLEMENT, TEST, OPTIMISE Attribution inherently changes the way your business evaluates, plans and implements marketing activities. To ensure these alterations are moving your business in the right direction they must be continually scrutinised and improved. Remember: attribution is not a one-time thing, it should be constantly evolving. Attribution data should also be fed back into your Customer Data Platform to integrate with marketing software, so that marketers can constantly operationalise their insights. 9
11 SUMMARY 8 Effective attribution requires three key steps: 1 INTEGRATE 2 UNDERSTAND 3 Integrate data across all channels and devices, in the Customer Data Platform Identify touchpoints throughout the journey Make informed decisions with your marketing spend Assign credit to the accurate touchpoints Cluster customers based on interests and Link data to a single Create the single customer view 10 Easy-to-understand visualisations and reports Personalise your content to optimise experience
12 For companies who need to decrease cost of customer acquisition, and increase revenue and customer lifetime value, Fospha empowers them to measure and optimise marketing campaigns with tailor made, data-driven attribution models. Our Customer Data Platform integrates data from all your sources, creating a granular single customer view. From here, we leverage top-class analytics and machine learning, to build an attribution model that is unique to your specific business needs. Use it to identify marketing spend that doesn t contribute to conversions, along with identifying acquisition routes that may be underused or those that could be further optimised. Fospha enables you to redistribute your marketing spend and produce tangible, revenue generating, results. Contact Us London Office - 1 Hammersmith Broadway, London, W6 9DL New York Office - 55 Broad Street, Lower Manhattan, New York, NY Enquiries - tellmemore@fospha.com Website -
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