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Acquisio building an_attribution_model_that_works Acquisio building an_attribution_model_that_works Document Transcript

  • Building an Attribution Model That WorksA Search Marketing Now E-Book
  • Building an Attribution Model That Works IntroductionThe use of attribution modeling to improve PPC efficiency has quickly grown in both popularity andsophistication. In many cases, a PPC conversion is the first in a string of interactions that together comprise a longand profitable customer relationship. Viewing these transactions within the broader context of lifetime customerengagement and attributing this information to bid rates and ROI calculations, is crucial to your company’sbottom line.Yet, creating an accurate attribution model is still one of the most difficult parts of any agency’s or marketer’sjob, whether you are working with online or offline channels – or both. Every marketer wants to find the mosteffective, profitable marketing mix for its products and services across all channels, including paid search. Whatyou struggle with is how to monetize paid search, in terms of accurately measuring its impact on sales andcustomer engagement. While this is not a difficult concept to grasp, it is difficult to break down the problem intoactionable tactics that can be readily applied to your PPC programs.There are so many important variables to consider when building an attribution model and there are still no clear-cut answers to questions such as the following: • Should ad impressions be weighted the same as clicks? • Are clicks from search worth the same as clicks from Facebook and other social media? • How does recency effect attribution? Is a click that happened 12 days ago still worth anything? How much more than a click that happened 25 days ago? • What tools are currently available to help decide?This E-Book discusses why attribution modeling has become so important to PPC marketers and agencies andpresents numerous tips and techniques to help you build attribution models that will more accurately measureand value your online marketing campaigns.Our thanks go to the following industry experts and Search Engine Land columnists, who provided valuableinsight for this E-Book: Josh Dreller, director of media technology, Fuor Digital; Andrew Goodman, founder andprincipal, and Mona Elesseily, director of marketing strategy, Page Zero Media; Cindy Krum, CEO, Rank-Mobile,LLC; Eric Peterson, CEO and founder, Web Analytics Demystified; David Roth, director of SEM, Yahoo!; DanielleSmith, head of strategy and client development, Range Online Media; and Michelle Stern, client services director,iProspect.Thanks also to Karen Burka for preparing this E-Book. n2 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • Building an Attribution Model That WorksWhy Use Attribution Models?Paid search is rapidly becoming the most importantdriver of online sales. According to The 2010 Stateof Retailing Online report, co-produced by ForresterResearch and Shop.org, online retailers estimate that 35percent of their sales are motivated by Internet search.Attribution modeling can help quantify the symbioticrelationship that exists between PPC and online displayadvertising.At the same time, research shows that a growingnumber of consumers use multiple channels whenmaking purchase decisions. According to The Multi-Channel Retail Report, co-sponsored by J.C. WilliamsGroup, bizrate.com and shop.org, 26% of consumers The Complexity of Properthat visit a store looking for a product subsequently buythat item from a catalog; another 25% of consumers that Attributionvisit a store subsequently purchase the product online.In addition, more than two-thirds of catalog shoppers Although search marketing and technology platformsultimately purchase a product online, while 39% of have become increasingly sophisticated over the pastwebsite browsers purchase a product from a print two years, it is still very difficult to track multiple clicks orcatalog. the purchase path that online consumers take, especially when they begin with one type of search but end up inAnother study of more than 1,000 consumers by Art another. In 2010, the IAB (Internet Advertising Bureau)Technology Group (ATG) found that 78% use two or reported $26 billion spent on online advertising led bymore channels to shop; 30% said they spread their search (46%) and display (24%). The challenge is thatspending across three channels. measurement technology makes In 2010, the IAB (Internet attribution very complicated and difficult, particularly when tryingAs a result, measuring thebidding process in relation Advertising Bureau) to understand how online searchonly to online transactions affects offline channels.significantly underestimates PPC’s reported $26 billion spent Currently there appear to be twooverall contribution to companyrevenue. Attribution modeling on online advertising basic types of approaches, neitherenables agencies and marketersto more accurately analyze and led by search (46%) and of which is perfect. The first requires marketers or their agencies tomeasure PPC’s contribution to display (24%). enter percentages into boxes on a screen and assign portions of theoffline conversions. The key isunderstanding the full sales cycle by conversion value to different onlineincorporating data from marketing events that happen marketing channels (i.e., 25% for SEM, 35% for display,further up the funnel, but which still play an important 15% for email). The second approach relies on the use ofrole in leading to the final sale, including top-of-funnel black-box math and is more likely to be done in-house byinfluencers such as newsletter subscriptions and store large marketers using statistical and predictive modelinglocator searches. By following the sales cycle all the way to simulate different attribution models and map theirthrough to downstream, bottom-of-funnel influencers outcomes to business metrics like profit, revenue or ROI.such as call center conversions and returns, marketerscan develop a more accurate picture of future revenue Both of these approaches take a very generic view ofand conversion rates, creating smarter keyword bidding attribution rather than consider the unique needs ofstrategies and uncovering new opportunities and each marketer’s business. They also assume that theretake advantage of current CPMs and CPCs before the is enough in-house analytical expertise to intelligentlycompetition does. decipher marketing data.3 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350 View slide
  • Building an Attribution Model That WorksMulti-Touch vs. Last-Clicked The Simplest AttributionAttribution Models May Be the Most MisleadingThere has been much search industry debate on themerits of last-click vs. multi-touch attribution models. Last-click attribution is simple and most platformIncreasingly, PPC conversions are influenced by more application defaults are set to last-touch attributionthan just the last click; many times a conversion happens (as well as showing one model at a time). But thisa few hours, days or weeks after a series of clicks and simplistic approach misses most, if not all of thesearches. value in the consumer interaction pathway. At a minimum, you need to look at first- and last-clickHowever, multi-touch attribution models are difficult attribution equally. To gauge how close – or how farto develop and make effective primarily because there – you are from proper attribution, ask yourself theare so many variables involved. For example, you’ll following:need to decide what percentage of the conversion valueto give to the first interaction vs. the last…or whether • Do you rely on last-touch attribution?display view-throughs are worth as much as a searchclick. Timing and recency need to be examined as well. • Do you make ad buying decisions based on dataDid a consumer interact with your ad last week…or you know is misleading or incorrect?last month? These are all questions search marketersand their agencies must consider and discuss before • Does your attribution platform support multipleassigning attribution values. attribution models?For these reasons, some search marketers believe • Does your attribution platform make multiplethat the “last-ad clicked” model is the most beneficial attribution data easily available?because search occurs deep into the purchase funnel,close to the conversion. But last-click attribution models • Do you have a plan to improve your view ofhave their drawbacks, as well. Namely, they don’t follow marketing attribution?consumers over extended time periods, or considerthe variety of online influencers such as email, direct Source: Web Analytics Demystified, SearchEngineLandnavigation, display ads or even organic search (SEO).As a result, a significant portion of the inaccuracies marketing programs, including SEO, online displayand oversimplifications now involved in crediting and offline advertising without a complete view of theonline media sources for conversions comes from only conversion funnel from top to bottom.counting the last click. According to Microsoft’s Atlas Institute, between 93-Effective PPC marketing requires you to stay ahead 95% of audience engagements with online advertisingof real-time bid markets and the evolving complexity typically receive no credit at all when marketers reviewassociated with search engines. Setting up search campaign ROI. That means that most marketers are onlyaccounts on a new search engine can be challenging looking at five percent to seven percent of consumerand expensive while the cost of keywords continues media interactions when optimizing conversions.to increase. In addition, it is difficult to measure the Without tracking and analyzing multiple touch points,relationship between search marketing and other you can’t get the true ROI of your marketing dollars. As a result, you might not be fully optimizing your marketing initiatives. A multi-touch attribution model allows you to track all user touch points and capture more complete information about their interactions with yours or your clients’ brands. The key is to track all of your online media in one system, allowing you to see4 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350 View slide
  • Building an Attribution Model That Worksall of the pathways users took to ultimately convert. For 4. Is your cookie expiration set right? Set your cookieexample, Consumer #1 might have seen a display ad on expiration according to what your company acceptsMonday, clicked a sponsorship on Tuesday, received an as an appropriate length of time for the sales cycle. Ifemail from your client on Wednesday, and came back you’re unsure, it’s best to err on the higher end becauseon Friday via a paid search ad and converted. Multi- you can always filter the data based on the time from thetouch attribution assigns credit to the entire conversion initial impression or click to the conversion.pathway, not just the last ad clicked. 5. Is your data clean? Set up business rules ahead of time for data that’s not appropriate to analyze. ForBuilding an Attribution example, if 97% of your data reveals that there areModel That Works between one and 12 touch points during the life of the cookie, you’re going to have some cut off point above 12 touch points where it makes sense to scrub that data.So how do you decide to attribute the revenue thatresults from a sale? And how do you decide where 6. Can you integrate CRM data? After cleaning yourto allocate your ad spend based on that attribution? data, it will be useful to marry your internal CRM dataDeveloping attribution models that integrate multiple with your engine and conversion data. This will allowonline channels requires having your internal data you to determine which purchase paths lead to themanagement house in order. As you begin the process, least and most desirable customers and guide yourhere are eight key questions to ask…and answer before optimization strategy.you begin. 7. Is your data weighted properly? There are several1. Do you have adequate technical resources? The ways to allocate success across different onlineavailability (or lack thereof) of technical resources will marketing channels. The easiesthelp you determine how many channels method is to weight each channelto initially consider in your attributionmodeling efforts. Start simply with just Start simply with equally, leaving yourself the option of taking the frequency of each channel’stwo channels to create a case study. just two channels to exposure into account, as well as theThen leverage it to get the additionalresources you need for modeling across create a case study. placement of each in the purchase path (first, last or middle touch point). Formore channels. Then leverage it to example, if someone has been exposed to a display ad five times in a seven-2. Is there an attribution plan formultiple products? Once you’ve decided get the additional touchpoint path, then the credit given to display can be weighted higher. Orwhich channels to include in your modelyou should consider attribution between resources you need if display was the first touchpoint, you could make the case that this channeldifferent products as well, for example if for modeling across introduced someone to the brand anda consumer clicks on an ad for ProductA and then later converts on Product B. more channels. should be given more credit than the other channels. In addition, it wouldIn addition, if your company markets make sense to weight the data pointsseveral brands, the same scenario would be applicable based on whether they result in new customers orto multiple brands. existing customers.3. Do you have a single tracking system? For each 8. Do you have the right reports? Several reports arechannel you’re measuring you’ll need to have the critical in attribution modeling. You need to be able to seesame tracking system. Keep in mind that if one of your the purchase path (marketing channel, engine or site, andchannels is display advertising, you’ll want a tracking keyword, if applicable) by custom date range. In addition,system that can track view-based conversions and not you need to be able to see which channels introduce newjust click-based conversions. Should you decide to customers to the brand, which channels influence andchange tracking providers, don’t forget to keep a record which channels net the transaction. Viewing this data byof the historical data. customer type will paint a more complete picture when attempting to improve overall results.5 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • Building an Attribution Model That WorksStep Two: automated to easily implement the recommendations into the media buys themselves.Developing a StrategyTo build an attribution model that works for yours or Step Three:your clients’ business goals, begin with a three-pronged A Practical Approach toapproach involving people, statistical analysis andactionable information that combines elements of your Appropriate Attributionexisting practices and expands upon them to provide amore complete, appropriate solution for each advertiser. The next step is to assign attribution within any given campaign through an approach called appropriateThe first phase should focus on human resources. attribution. To begin, walk back through each click andData can only be as smart as the people interpreting decide how to assign the revenue collected to the firstit. Employing an attribution specialist to lead the effort touch and divide that by the revenue collected if youis ideal, though not always doable. In any case, you were to assign or associate it with the last touch.will need to conduct a fairly exhaustive analysis of themarketer’s business and online marketing programs. Revenue from First Touch/Revenue from Last Touch =Start with business goals and product adoption cycles, Appropriate Attribution Ratiomove on to conversion window analysis and end witha channel-by-channel audit of both online and offline In essence, you are creating a ratio that will allow you tomarketing. evaluate or interpret the value of any online campaign toward your marketing goals. For example, the closerArmed with the proper inputs as they relate to a your resulting number is to zero the more skewedmarketer’s business and its metrics or KPIs, the next step toward the last click your revenue is and the campaignis statistical modeling to predict all possible outcomes can be viewed as a true conversion campaign thatand understand which model will best support your results in sales. The further the resulting number is frombusiness goals. This is where an honest evaluation zero, the more likely you are running an acquisitionof the company’s data quality and accuracy is vitally or top-of-funnel campaign, because the value will beimportant. Analytics and measurement must be skewed toward the first click. If your attribution ratio isstandardized on a single platform to be able to compare balanced between the two ends of the click pathway,“apples to apples.” then the value of that marketing campaign is as a persuasion campaign because it is not actively acquiringAcquisio’s performance media platform, for example, or converting customers.has an integrated third-party ad server that allowsagencies and marketers to track multiple online • Closer to 0.00 = Conversion Campaignchannels – search, display and social media – with the • Closer to 1.00 = Persuasion Campaignsame technology. One server powers display ad views • Closer to 10.00 = Acquisition Campaignand clicks, as well as Facebook and PPC clicks givingbusiness users the ability to more accurately weight an Using this type of appropriate attribution ratio forad view vs. an ad click. There are multiple models to any online marketing channel will allow you to morechoose from and cycle through to see how any given efficiently bid and allocate resources to specificmodel will impact campaign results or ROI. keywords or campaigns based on your business goals. Summarizing each of your marketing channels will alsoFinally, the third step makes all of this information enable you to see where you need to drive more salesactionable by using the model outputs to apply directly (and perhaps spend more) or see where your campaignsto actual online channels. Ideally this process should be are working and spend more there. Start with business goals and product adoption cycles, move on to conversion window analysis and end with a channel-by-channel audit of both online and offline marketing.6 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • Building an Attribution Model That WorksBringing Margin and Cost into interested in your product or service. We know if someone searches for camera information for morethe Equation than 15 minutes on a consumer electronics website that they’re interested in cameras. Online marketersBecause revenue is only part of the equation for many should try to close the loop definitively with an onlinemarketers, you can create a more sophisticated, accurate sale to these types of visitors. Don’t get “too good” atattribution model by building costs and/or marginal driving online searchers to physical stores; improve yourcontribution into your appropriate attribution ratio to conversion marketing so the customer is spending moreevaluate campaigns. than just his or her time online. Appropriate Attribution RatioNet = (Revenue from 4. Queries with geographic qualifiers. Some queries first touch - Campaign marketing cost) / (Revenue containing geographic qualifiers indicate offline from last touch – Campaign marketing cost) purchase intent. For example, if someone is searching for the query “dentist in West Vancouver” they’re Appropriate Attribution RatioMargin = (Revenue from more than likely looking for a dental appointment in a first touch – Campaign COGS/Revenue from last particular geographic location. The type of insight you touch- Campaign COGS) get will depend on your industry and may not be as relevant in other categories so use care when examining *Appropriate Attribution Ratios courtesy of Web terms. Analytics Demystified and Coremetrics. 5. Local search. Many times local PPC campaigns are designed to drive offline purchases. Using theSeven Metrics to Measure same example as above, if the term “dentist in West Vancouver” was targeted to West Vancouver andthe Impact of PPC on Offline designed to drive traffic, it is probably driving a high proportion of your phone appointments or walk-inConversion traffic. Some Yellow Pages advertisers use dedicated phone numbers for their campaigns. Try doing the sameLastly, attribution modeling can be a valuable tool for on the search side. If not, you’re not adequately trackingboth agencies and marketers to prove the impact and the campaign’s impact.value that PPC and other online channels have on offlinesales. Here are seven key metrics to link online channels 6. Promo codes. To track offline conversion, create ato offline conversions. coupon or other online-specific promotion that’s only redeemable in the store (if appropriate). Customers can1. Online/offline orders and pick-ups. Tracking how write down or print special codes that they can redeemmany customers searched and purchased online, then in-store.picked up their purchases in your brick-and-mortarstores provides very precise online/offline data for 7. Focus groups and post-purchase surveys. Run a focusretailers that offer this service. group to get a better idea of how your buyers shop. Also, after people make purchases online, ask for their2. Store locator pages. Customers who want to visit feedback through a post-purchase survey to get morea particular store tend to seek information on store information on buying behavior and offline impact.locator pages. For these pages to be most effective andtrackable make sure you provide relevant informationlike “find a store near you,” store hours, directions andphone numbers in your online campaigns, and that it’seasy to find on your website.3. Time spent on website. The more time someonespends on your website, the more likely they’re7 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • Building an Attribution Model That WorksIn SummaryAttribution modeling has become a critical marketing tool in today’s competitive media marketplace, whereconsumers are bombarded by multi-channel advertising messages and budget dollars are tight. With PPC becominga key driver of online sales, and more marketers questioning its role in driving offline sales, it’s more important thanever before to view conversion within the broader context of lifetime customer engagement and attributing thisinformation ROI calculations. Using a multi-touch attribution model allows marketers to track all customer touchpoints and capture more complete information about customer interactions with their brands.Yet proper attribution still poses numerous challenges to marketers and agencies alike because there are so manyvariables involved. There are no shortcuts or clear-cut answers to questions about weighting each channel or theimpact that recency has on the value of a conversion. And each business must make decisions based on their ownunique business goals, KPIs and metrics -- there is no one-size-fits-all model.These challenges will diminish as more and more analytics solutions and PPC reporting platforms develop thecapacity to more accurately track and model multiple attributions. For example, Acquisio’s performance mediaplatform has an integrated third-party ad server that allows agencies and advertisers to track multiple channels –search, display, social media – with the same technology. One server powers display ad views and clicks, as well asFacebook and PPC clicks making it easier to traffic existing ad buys. n8 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350
  • Building an Attribution Model That WorksThe world’s leading Performance Media Platform, Acquisio helps marketers buy, track, manage, optimize, andreport on media across all channels. The platform was designed for search marketing, and it has evolved to includeFacebook ads and all major RTB display networks. Acquisio provides the industry-leading technology for marketersbuying ads on any online channel, allowing them to handle all tasks associated with performance advertising, fromad purchase through conversion tracking and beyond, within a single integrated platform. With more than $500MMin ad spend under its management, Acquisio is the multi-channel advertising solution preferred by advertising andmarketing agencies around the world. For more information, visit www.acquisio.com.465 Victoria, Suite 300Saint Lambert, QCCanadaJ4P 2J2toll-free: +1.866.493.9070direct: +1.450.465.2631fax: +1.450.465.2841Search Marketing Now webcasts and white papers provide authoritative and actionable education about searchengine marketing issues. Register today for one of our free webcasts covering topics about search engineoptimization, paid search advertising and search marketing in general.Search Marketing Now is a division of Third Door Media, which publishes web sites, and produces in-personevents and webcasts. Each of the four brands - Search Engine Land, Search Marketing Expo, Search MarketingNow, and Sphinn - fosters continuing education, evolution and engagement for the community we serve.9 © 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: whitepapers@searchmarketingnow.com • (203) 664-1350