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I crossing digital-attribution-measurement-082010


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  • 1. ICROSSING POV: DIGITAL ATTRIBUTION MEASUREMENT GAINS MOMENTUM by Chuck Sharp, Senior Vice President, Analytics, iCrossing August 2010 CURRENT SITUATION Online marketing has always held the promise of being the most accountable medium, but there is a fatal flaw in the way things are measured today. Currently, most marketers use a single-click methodology to assign credit for an online conversion. In other words, the last banner ad, keyword or action the customer saw or performed before the conversion receives 100 percent of the credit for the transaction. But why do marketers use the single-click methodology when they intuitively know that most consumers interact with and are influenced by many touchpoints before they even reach the point of transaction? First we must realize that most marketers are just beginning to realize that a more holistic measurement approach is possible. This isn’t surprising given that detailed attribution measurement has never been possible in the offline world. Many marketers struggle to make sense of the data being produced by the single-click model, so introducing a more sophisticated measurement approach seems overwhelming. From a technical perspective, the potential resources associated with retaining the large amount of data for attribution modeling and the limited functionality of Web analytics software providers have also contributed in making the single-click model the default measurement methodology because of its ease, not necessarily because it is the best solution. Today, there are many forces that are pushing companies away from the single-click model toward a more integrated, holistic measurement approach. One key driver is that many sophisticated marketers feel like they have done all they can with the single-click model and they are looking for new optimization opportunities. The continued pressure to get smarter with measurement has forced marketers to look at measurement methodologies that can measure touchpoints, which take place in the awareness and consideration stages. Finally, marketers know that multiple touchpoints influence purchase behavior, and they simply want a more accurate way to demonstrate how multi- channel efforts work together to drive conversions.© ICROSSING. ALL RIGHTS RESERVED. 1
  • 2. DIGITAL ATTRIBUTION MEASUREMENT GAINS MOMENTUM AUGUST 2010 IMPACT As marketers implement attribution measurement they uncover new optimization opportunities. At a strategic level marketers use the information to better allocate budget between different channels. Tactically the information is used to better allocate budget between different keywords on a daily basis. Companies from different industries have used the iCrossing attribution solution to better allocate their digital marketing spend. For example: + One hospitality client used attribution data to justify an increase in spend for non-branded terms that included the city name and popular activities like spa, golf or beach. These terms had a low ROI in a single-click model but in an attribution model were very profitable. These customers would become interested in the hotel because of these terms but eventually convert on a branded term or after a direct visit to the website. This knowledge enabled the marketer to justify an increase in spend on those non-branded terms. + An ecommerce client was under pressure to reduce spending on paid search, non-branded terms by 50 percent. The client used a forecast that leveraged the attribution data to show how this change in spend would impact all channels including email, direct load, and branded paid search. + iCrossing created an attribution model for a client and found that more than one-third of their transactions were impacted by multi- channel or multi-keyword interactions. For a different client, the findings were around 20 percent. Overall, iCrossing expects that companies will soon find that credit for 25 percent of their transactions will be altered if they switch to an attribution model. Other clients are concerned about measuring the real value display impressions have on other channels. Through attribution measurement, impression level data from Dart or Atlas can be integrated into the attribution model and the true measurement of display impressions can be calculated. We expect to see most of the leading corporations in the travel and hospitality, retail and financial services verticals switch to attribution measurement within the next twelve to eighteen months, while the other verticals will adopt attribution measurement at a slower pace. In general, companies whose customers transact online are more likely to be early adopters of this measurement methodology while companies whose sites are used for lead generation or product or service awareness are slower to adopt. OPPORTUNITY Through attribution modeling, a more accurate distribution of credit can be given to channels that customers touch before their last click. For example, if a customer first comes to a site after clicking on a display ad, then later searches on a non-branded keyword, then a branded keyword, and finally converts during a visit where they typed in the site URL directly, an attribution model would assign weighted credit to all channels. Without an attribution model, using the “old way,” the direct load to the website would get all the credit for driving that conversion. Attribution measurement enables the distribution of credit between all touchpoints, not just the last.© ICROSSING. ALL RIGHTS RESERVED. 2
  • 3. DIGITAL ATTRIBUTION MEASUREMENT GAINS MOMENTUM AUGUST 2010 Once implemented, the information is used to give marketers more accurate insight into how all of their online channels are working together to drive conversions. For example, an iCrossing client was interested in seeing the impact a reduction in spend in non-branded paid search terms would have on the other channels. They used the insight provided through attribution measurement to show the quantifiable impact this action would have on branded paid search conversions and conversions from other channels. This type of insight provides the support marketers need to reallocate budgets and enables agency partners and internal teams to better optimize media spend and make the budgeting process more analytical and less political. There are a number of vendors that sell some form of attribution measurement. These include display advertising vendors, start-up technology companies, Web analytics providers, agencies that specialize in paid search and a few integrated digital agencies like iCrossing. While there are several components of any attribution measurement solution that are table stakes (such as measuring display impressions, providing customized attribution models, and incorporating all digital channels including social media) there are also several capabilities that are critical. To make any attribution measurement solution work, a robust offering includes: 1. TAG AGNOSTICISM An attribution solution provider can use its own tagging, but it must also accept tagging from other providers, such as Omniture, Webtrends, Coremetrics, Dart, Atlas to name a few. Service providers that only accept their own tags miss critical information that informs the appropriate attribution. 2. A-LA-CARTE SERVICES An a-la-carte approach enables companies to select the attribution services and technologies they want to enlist from the attribution service provider. This a-la-carte approach gives clients the ultimate The iCrossing attribution tree diagram identifies key flexibility and total control over the attribution solution. For example, paths customers use before they get to the site. It also Omniture isn’t capable of incorporating display impressions into enables accurate scenario planning and forecasts. attribution models nor are they able to support customized attribution models. An attribution service provider must be able to provide these services while leveraging the Omniture Site Catalyst tag as the attribution source of record. All this information can be stored and analyzed in a data warehouse created by the service provider or, if the client prefers, in a client database. 3. CAMPAIGN ATTRIBUTION AND EXECUTION Ideally a single service provider should create and manage the attribution solution as well as execute campaigns. This creates a seamless transition between the people and technology that manage the attribution solution, and the people and technology that execute the campaigns. This connection reduces costs and increases efficiencies. 4. CONVERSION QUALITY VALUES Not all conversions are created equally. A sound attribution model accounts for this fact by: + assigning a different value to each conversion + assigning a higher value to conversions that involve net new customers or conversions in product categories that generate higher margins or produce customers with higher life-time values + integrating with a client’s CRM system and applies a customer value or transaction value to each conversion + utilizing this information to calculate a conversion score that is then distributed across the different touch points that influenced the conversion 5. RESEARCH BEFORE IMPLEMENTATION Research – when done at the start of an attribution project – can uncover the scale of the cross-channel and cross-keyword conversions taking place. It’s critical for marketers to first understand the value they can derive from a switch to attribution measurement before they invest in a new measurement approach. Once this has been understood, a full attribution model can be implemented.© ICROSSING. ALL RIGHTS RESERVED. 3
  • 4. DIGITAL ATTRIBUTION MEASUREMENT GAINS MOMENTUM AUGUST 2010 6. SCENARIO PLANNING Scenario planning uses modeling techniques that have been perfected in genetic research and supply chain management, and includes an attribution tree diagram that identifies key paths customers use before they get to the site. Users are able to adjust conversion percentages, traffic volume assumptions, and other key factors, and able to see how these changes might impact future results. This approach brings attribution to life inside of an organization and helps marketers optimize spend in the future. FUTURE STATE As companies switch from the single-click model to an attribution form of measurement, they will go through two phases. In the first phase, attribution results will primarily be used to gain insight into how multi-channel efforts work together to drive conversions, informing marketing-mix allocation planning at a strategic level. In this stage, the organization will be familiarizing itself with attribution measurement while still relying on the single-click approach for tactical execution. As the buy-in for attribution increases, attributed results will be used to identify obvious optimization opportunities and in scenario planning and forecasting. Companies will enter into the second phase when key stakeholders trust the attributed results more than they do the results being produced by the single-click model. In this phase, those in charge of day-to-day tactical campaign execution will start to use attributed results and the single-click results feed will be turned off. In the next two years, attribution measurement will slowly become the de facto measurement methodology for sophisticated marketing organizations. Smaller companies and less sophisticated marketers will continue to use the single click approach but they, too, will switch to attribution measurement in three-to-five years. Thoughtful companies will take a measured approach to the adoption of attribution measurement by first understanding its potential impact on the organization before jumping into a full implementation. Those companies who adopt attribution measurement will use it to uncover new optimization opportunities and to improve the quality of their forecasts and as it gains momentum will use it on a daily basis as their de facto measurement approach. STAY CONNECTED Find out more at Call us toll-free at 866.620.3780 Follow us at Become a fan at© ICROSSING. ALL RIGHTS RESERVED. 4