Accenture: ACN-interactive-pov-multichannel-attribution Feb 2013
Accenture Interactive | Point of View SeriesMultichannelAttributionMeasuring Marketing ROI in theDigital Era
Multichannel AttributionMeasuring Marketing ROI in the Digital EraDigital technologies have A typical consumer journey is anything but • How did a particular sale happen? linear, single channel or reliant upon oneempowered today’s consumers to • Who should get the credit for it? device. It may start in front of the TV andget what they want, when they progress toward a tablet, then switch to a • ow much credit should be attributed to Hwant and where they want. So smart phone, make pit stops at a product each consumer interaction across channels,while consumers may have few website followed by a social network site, and on what basis?problems moving from one media for sharing news about the product, and end with a purchase at a store. See consumer • ow should the investment be apportioned Hchannel to another and from journey scenario. across channels?one device to another, businessis having a hard time keeping up In order to serve this channel-savvy, highlywith them. mobile, multidevice-happy consumer, chief These questionsAnticipating the next move in a marketing officers (CMOs) have their work cut out for them. These CMOs need to have have become theconsumer’s journey to conversion, an accurate understanding of consumers— their intentions, impressions of products subject of someand measuring every interactionacross channels, is a significant and services and their behavior; to pinpoint exactly which marketing channels—online or lively discussionschallenge. Pervasive methods offline—are yielding maximum MROI. on direct, lastin use today for associatingconsumer behavior with marketing For example, knowing the impact of paid search engine marketing (SEM), online action or last clickinvestment fall short of capturing display media, natural search marketing based on search engine optimization (SEO) or versus multichannelthe contributions from multiplechannels on a specific path to affiliate partners, on both online and offline attribution. customer behavior. Or understanding howpurchase. As marketing leaders email, mobile-optimized websites, onlineshift budgets from channel to video ads, social media, mobile display ads and the like, work together with offlinechannel, new approaches are media. For that, CMOs must have accuraterequired that provide better insight answers to questions such as:and ultimately drive smarter budgetallocation and improved marketingreturn on investment (MROI).
A typical consumer journey scenario Dave is sitting with a tablet watching a show on Dave does a Google Search on his tablet, which pops up a 1 TV. During one of the ad breaks he sees a discount 2 paid search ad. He clicks on the ad and goes to the phone commercial for mobile phones. manufacturers website, which lists not only additional discounts and insurance plans, but also has links to reviews. Dave sends the link to his email address for access later. On his way to work Dave opens the email on his smart Later, Sarah logs into Facebook on her new phone and 3 phone and forwards the link to his friend, Sarah, who is 4 shares her news about the purchase with her friends. looking for a good deal on a mobile phone. Sarah goes Some friends search for the phone retailer and make a web to the phone manufacturers website on her laptop, reads purchase. Some put the item in the cart then abandon the reviews, then drives to the nearest store to purchase the digital journey – preferring to drive to their nearest store to smart phone. try the phone and complete the purchase.
Last action dilemma Lately, however, it is being widelyOne of the biggest problems today is that, acknowledged within the industry thatwhile consumers operate in a multichannel attributing the cause of a conversionworld, the metrics of their interactions primarily to the last action often leadsare still siloed. That is, we have metrics to overattribution of consumer responsefor measuring consumer activity in to that action, ignoring other influences,each channel but not for measuring the such as a TV advertisement or online paidentire consumer journey in an integrated search campaign. This is resulting in themanner. The need to capture and analyze emergence of econometric MROI analysesthis journey as it takes place across both which focus on, measure, and analyzeoffline and online channels has led to the historical data of all known interactionsemergence of various attribution models over a specific period of time to in order toand approaches. derive multichannel attribution.For the most part, direct attribution has Regardless of which approach onebeen a popular approach for analyzing embraces, it is absolutely clear that unlessconsumer data. Not only because consumer data is captured in real-time,alternative approaches are just beginning across channels and devices, any exerciseto emerge, but also because direct that gives credit to consumer action perattribution is simple to implement. It calls specific channel or device may lead to anfor attributing conversion (or purchase) to inaccurate interpretation of results andthe “last action,” such as a mouse click or thereby to undesirable business decisions.direct mail response.
Multichannel attribution Dynamic tools and capability • eural Networks: Leverage machine NAnalyzing consumer behavior is getting There is no “one-size-fits-all” approach learning algorithms that use complex,more complex, not only because of the sheer to successful multichannel attribution. nonlinear mapping functions forvolume of data, but also because that data The consumer data landscape and business estimation and classification. Neuralcomes from multiple sources, including environment are highly complex and ever- networks prove their worth inconsumer touchpoints, data providers, and changing. Therefore, high performance, multichannel attribution where thereadvertisers. So how to accurately measure dynamic tools and capability are vital is often a lack of consistent historicaland interpret consumer data? to success. The techniques required information or an absence of a may include: theoretical framework around causalThough one reliable approach for measuring relationships among variables.consumer data that is good for all situations • Clustering: Group customers with similarhas yet to emerge, there are a number of traits and profiles, and use clustering Integrated analyticsmultichannel attribution approaches that to identify homogeneous patterns. While multichannel attribution can yieldare yielding positive results. There are Each attribute within each cluster is hitherto unobtainable levels of granularity,three fundamental aspects to successful allocated a specific weight to identify it is not a panacea. It should be alignedmultichannel attribution. its relative importance to the cluster, to, and integrated with, other analytics and across clusters. This is not a once- techniques as and when needed. ForBig data mindset and-done exercise, but a technique that example, if analytic processes are alreadyData needs to be gathered and analyzed helps dynamically identify trends and in place focusing on both media andfrom across consumer touchpoints. To similarities in customer behavior. marketing mix, as well as investmentachieve that goal, analytics engines that optimization, then adopting an integratedcan process a huge volume of data and drill • Logistic Regression: Isolate and measure analytics approach is a powerfuldown to various levels of data granularity the impact of the multitude of media, combination. This type of approach willare required—a must for understanding marketing and service influences on allow companies to apply marketing mixboth individual behavior and the behavior customer behavior. Through scenario modelling to understand the marketingof a segment of consumers across channels. planning, optimize future activities to effectiveness at a regional level, andThis requires robust data architectures drive sales, reduce churn and improve conduct multichannel attribution analysisfor enabling systematic consumer data customer satisfaction. to dive deeper into the data for insightsacquisition, processing, population, and surrounding media, customer experiencereporting, as well as data analytics. and customer behavior.
Comparison of Direct and Multichannel Attribution – an example To demonstrate the difference between direct and multichannel Taking a direct attribution approach, the Google paid search attribution, consider for a moment the following example. A ad will be identified as the activity that influenced the sale. consumer sees a TV ad that results in him wanting to purchase The multichannel attribution approach however, considers a specific product. He goes online to make the purchase and the influence of both the TV and the Google paid search ads. decides to use his Google search engine to find the product URL. See table below. His Google search returns a paid link promoting the product which the consumer clicks on to take him to the site where he makes a purchase. Direct attribution Multichannel attribution Summary of Uses the information provided at point of Recognizes that multiple inputs drive a purchase approach purchase, whereby a click or entry of a code and quantifies, or attributes, value to each input. indicates where to attribute the purchase or connection. Scenario results The purchase or connection is attributed to The purchase or connection would likely be google keyword search. attributed to both the tv and google paid search advertisements, and in a way which allows the diminishing return on increasing investment in each activity to be captured—much more reflective of true customer behavior.The direct attribution approach has the activities drive base consumer behavior decision to cut TV advertising and directadvantage of being simple to calculate, in a statistical sample, while others drive more funds to paid search, which could beproviding top line metrics for marketers incremental consumer behavior. the result of the direct attribution approach,to justify investment and manage costs. the value of TV advertising is recognizedHowever, direct attribution also leads The multichannel attribution approach when considering future investment andto linear thinking—the assumption that provides greater insight into the data funds are not redirected in such a “black andeverything has a fixed cost per connection or influencing the purchase or connection. In white” response. Multichannel attributionclick, and if marketing investment is doubled, this example, attributing the influence to enables optimization of forward lookingthe consumer response rate will also double. the TV ad on the purchase will impact MROI budgets, identification of cost savings andIn practice, there is significant variation calculations of both the TV and Google improved MROI.in effective cost per response, as certain paid search activities. Instead of taking the
Driving Consumer Relevance consumers or to a specific segment of 1 A phenomenon, we call “the R Factor” or “consumer relevance at scale.” For a full discussion on the RThe channel-savvy, highly mobile, consumers at scale. Companies will be Factor, see Baiju Shah and Nandini Nayak, “Gotmultidevice-happy consumer has able to “test the water” for new products the R Factor: Driving breakthrough performance in the Era of Relevance,” http://www.accenture.com/created a new playing field for marketing and services, learn from early consumer SiteCollectionDocuments/PDF/Accenture-Relevance-organizations. Today, the effectiveness of responses, and make the necessary changes At-Scale-POV-WEB-5April.pdf accessed June 28, 2012.marketing strategy is increasingly measured before launching them to a wider audience.in terms of its relevance to the intent and As more attention is focused on thechanging preferences of consumers across last-action dilemma, we are likely to seechannels and touchpoints—at both macro multichannel attribution becoming a keyand micro levels of granularity.1 component of not just marketing strategy, but of a company’s overall business strategy.As the practice of multichannel attributiongains popularity and attains a certain levelof maturity, companies will be able to deliver To learn more about developingthe right message, via the right channel, a multichannel attributionat the right time to a larger audience, as approach, contact:well as make accurate investment decisionsacross channels and touchpoints. The Conor McGovernway companies run marketing campaigns email@example.com change for the better—with datagranularity and new analytics techniques,marketing organizations can access micro-segmentation data and deliver targetedmarketing campaigns to individual