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Facebook Multi-Touch Attribution True Value of Display in Finance

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Facebook Multi-Touch Attribution True Value of Display in Finance

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  • Multi-touch attribution (MTA) tools are designed to assign credit across multiple channels algorithmically by finding patterns across customer journeys. Find out the two key components necessary for a successful MTA implementation. http://bit.ly/2kdC68k
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Facebook Multi-Touch Attribution True Value of Display in Finance

  1. 1. Media attribution: Optimising digital marketing spend in Financial Services A multi touch attribution study on the role of Facebook, display and search marketing in Financial Services.
  2. 2. Executive summary Marketers have been applying science, specifically statistics and econometric modeling, for many decades now to answer the key question all advertisers face - how to allocate media budgets across channels to maximise overall return on advertising spend (ROAS) with a limited budget. Unfortunately, when it came to digital marketing, the same rigor was not applied due to a lack of reliable data as well as focus from top executives. 02 Whilst the data has improved and digital is now an indispensable part of any marketer’s channel mix, many brands still rely on inaccurate attribution methods. The most prevalent, last-click attribution, gives all conversion credit to the last campaign touch point in the purchase path thus ignoring the value of all other digital advertising that contributed to the conversion. Unchallenged for many years, it has lead to an outdated and biased view of the digital landscape. Media attribution solves the key question every marketer faces - how to split my media budget? It delivers significant ROI and can even turn into a tangible long-term competitive advantage for brands. “ ” Christian Bartens, CEO, Datalicious ACROSS 5 MONTHS = ROAS A N D 7 B R A N D S 104 million 75,000 P U R C H A S E PAT H S C O N V E R S I O N S The study summarizes the results of the analysis of: This study seeks to understand the true impact of digital channels for financial services companies in Australia. Using a multi-touch attribution approach, the study summarizes the results of the analysis of 702 million media touch points across 104 million purchase paths and 75 thousand conversions across five months and seven brands. Compared to last-click, multi-touch attribution uses logistic regression to assign custom conversion credits to every campaign touch point along the purchase path depending on its relative importance in driving conversions thus not undervaluing any particular channels. 702 millionMEDIA TOUCH POINTS
  3. 3. Executive summary The key findings of the study are: Facebook and display advertising are significantly undervalued and on average deliver 830% more revenue than anticipated once measured accurately with multi-touch attribution. Given most advertisers have very mature search marketing programs that offer little opportunities for additional incremental growth, display advertising in general represents one of the most attractive growth opportunities. Facebook advertising in particular still holds significant growth potential compared to other more established channels as it provides a high average ROAS yet comparatively does not receive a lot of media spend. While Facebook and display advertising do generate clicks, they are not typical direct response channels, but instead indirectly influence conversions and build awareness that is then captured further down the purchase path by other channels such as search. Search, whilst important in capturing awareness generated by display advertising or other channels, is overvalued in the amount of impact it has on the consumer purchase decision. Accurate multi-touch measurement and the ability to exploit the resulting media optimisation opportunities at scale holds tremendous potential for advertisers to develop a strategic competitive edge, build market share and deliver incremental growth. 03 TYPICAL CHANNEL ROAS COMPARED TO SHARE OF MEDIA SPEND Typical share of spend Typical ROAS (Multi-touch attribution model) LOW HIGH HIGH Display retargetting Display Facebook Other display Paid search (SEM) Contact us for actual ROAS dollar figures for a particular channel.
  4. 4. When switching from last-click to multi-touch attribution, the revenue credited to Facebook and display advertising on average increased by 830% while at the same time the revenue credited to paid search (SEM) and organic search (SEO) remained fairly constant or decreased slightly. Search is the most common customer touch point just prior to purchasing a financial product online, which means the majority of conversion credits are usually attributed to search in a last-click attribution model. However, in reality there are more channels than just search involved in driving a conversion. Specifically channels such as display advertising that help consumers realise a need by building awareness and stimulating research, which ultimately result in a search. Given these channels occur further up the purchase path and do not necessarily generate clicks they are undervalued in an attribution model that gives all credit to the very last click. 04 Compared to last-click, the multi-touch attribution used in this study uses semi-partial correlation to assign custom conversion credits to every campaign touch point along the purchase path depending on its relative importance in driving conversions thus not undervaluing any particular channels. Once an accurate multi-touch approach is implemented it shows a clear shift in conversion credit and revenue attribution between channels whilst the overall revenue generated by all digital channels remains constant. Paid search (SEM) can no longer claim credit for most of the generated revenue and has to start sharing with other channels such as display that previously were not able to claim revenue due to an inaccurate measurement approach. Display retargeting as a channel performs exceptionally well as expected given consumers have to have shown a previous intent to purchase by visiting the advertisers website in order to be included in retargeting campaigns. Key study finding #1: Display advertising is undervalued in a last-click attribution model SWING IN REVENUE BY CHANNEL WHEN SWITCHING FROM LAST-CLICK TO MULTI-TOUCH ATTRIBUTION DISPLAY RETARGETTING DISPLAY FACEBOOK OTHER DISPLAY PAID SEARCH (SEM) DIRECT OTHER REFERRALS ORGANIC SEARCH (SEO) EMAIL % change in revenue multi-touch attribution vs last-click attribution 2371%* 911%* 749%* 830% average }3% 2% -3% -10% -25% * Note: The percentage increase for display channels is so significant because these channels basically did not receive any credit at all in last-click based attribution model hence the swing compares the new (multi-touch) figures to a very low (last-click) base.
  5. 5. 05 Key study finding #2: Facebook and display advertising boost searches and conversions CONVERSION RATE UPLIFT FROM MULTIPLE DISPLAY AD IMPRESSIONS FACEBOOK AND DISPLAY AD CLICK RESPONSES COMPARED TO SEARCH RESPONSES Uplift in conversion rate Facebook Other display 7.16 7.18 While Facebook and display advertising do generate clicks, they are not typical direct response channels, but instead indirectly influence conversions and build awareness that is then captured further down the purchase path by other channels such as search. It is impossible to prove with statistical certainty whether display advertising leads to searches, however while comparing thousands of converting and non-converting purchase paths across millions of campaign touch points, we have found some very strong circumstantial evidence that that is indeed the case. If Facebook and display advertising were similar to search and had no significant impact aside from generating clicks, then we should not be able to observe a connection between increasing number of ad impressions (without clicks) and an increase in conversion rate. However, the study shows that for both Facebook and display advertising, the more ad impressions (without leading to clicks) consumers are exposed to the more likely they are to convert – over 7x more likely in fact. Once we accept that display advertising does not only generate clicks but also indirectly increases conversions and thus searches which are the most common touch point just prior to converting online, then we can argue that display ads lead to 9x more search responses than clicks alone. Apart from the obvious consequences for revenue attribution, this also has significant impact on creative optimisation, as the standard ad click-through rate alone cannot be considered a strong enough metric any more to evaluate creative performance. Display preceding ( leading to) search 9.44x Display clicks only
  6. 6. 06 Key study finding #3: Actioning multi-touch attribution insights improves overall ROAS Actioning multi-touch attribution insights at scale holds tremendous potential for advertisers to improve ROAS across all channels and thus to develop a strategic competitive advantage, build market share and deliver incremental growth. The study not only gives considerable insight into the true performance of digital advertising channels for financial service organisations, but also provides a basis for renewed thinking in terms of digital strategy and media planning. While it is impossible to say exactly how much the study participants will be able increase their performance by actioning the insights gained from this exercise, it is certain that the impact will not be insignificant. Any channel that is potentially undervalued by over 900% in terms of revenue contribution just because of faulty measurement represents a significant opportunity in times of shrinking marketing budgets and constantly increasing competitive pressure. Both the earlier attribution model comparison as well as the ROAS results by channel, clearly demonstrate that display advertising is undervalued in the financial service industry. Facebook advertising in particular still holds significant growth potential compared to other more established channels as it provides a high average ROAS yet comparatively does not receive a lot of media spend. Display retargeting performs exceptionally well as expected, however remains difficult to scale given consumers must have previously exhibited the intent to purchase. In the end it is all about achieving the right channel mix and multi-touch attribution helps to identify the roles that different channels play in the path to purchase which is invaluable in developing an efficient, scalable and profitable digital media strategy. While search is efficient in capturing demand it is not necessarily generating it, whereas display advertising is a powerful tool to build awareness, consideration and purchase intent. TYPICAL REVENUE SHARE AND SHARE OF AD SPEND BY CHANNEL COMPARED TO ROAS Typical ROAS (Multi-touch attribution model) Bubble size indicates typical share of Ad spend Typical revenue share (Multi-touch attribution model) Paid search (SEM) Other display Display Facebook Display retargetting Organic search (SEO)* Direct (offline media / brand equity)* Email* Other referral* * Note: The study participants did not provide costs or media spend figures for organic search (SEO), referrals or email so ROAS figures could unfortunately not be calculated. The results of these channels are also likely heavily influenced by brand equity created elsewhere - most likely through advertising in offline media channels that could not be measured as part of this study but tend to generate organic searches as a response. TYPICAL SHARE OF AD SPEND BY CHANNEL COMPARED TO ROAS Typical share of spend Typical ROAS (Multi-touch attribution model) Display retargetting Display facebook Other display Paid search (SEM)
  7. 7. Research partnership 07 About Datalicious Datalicious is a full service analytics agency providing client focused solutions designed to scale with any organisation. From our beginnings as an analytics consulting agency in Australia, Datalicious has expanded globally through our growing product and services divisions and help our clients around achieve data driven marketing best practice. Datalicious is part of the Veda Group. This research study was commissioned by Facebook, however all areas of the study were ultimately designed, managed and delivered by Datalicious. Facebook had no involvement in the data collection, development of the multi-touch attribution methodology or analysis and interpretation of the results. Facebook has not been provided with the results of any individual advertiser, publisher or search engine provider. It is fabulous to see advertisers increasing their sophistication in reviewing the effectiveness of their media spend. A recent study conducted by IAB Australia indicated that only a quarter of buyers are using multi-touch attribution analysis and still put way too much weight on last click or clicks overall. This study shows a positive impact across the variety of digital ad channels that were used and will help marketers start optimising campaigns based on creative exposure as well as any direct interaction. “ ” Gai Le Roy, Head of Research, iAB. Contact us to discuss how accurate multi touch attribution insights could benefit your organisation.
  8. 8. Research methodology Media attribution: A scientific approach to understanding ROAS The Datalicious multi-touch attribution approach uses semi-partial correlation to compare converting and non-converting paths in order to assign custom conversion credits to every campaign touch point along the purchase path depending on its relative importance in driving conversions. Simply speaking, channels that appear more often in converting paths than to non- converting paths receive a higher weight, which in turn allows them to claim more conversion credits and thus revenue. The higher revenue attributed to these channels then allows them to better offset the costs associated with the channel leading to a higher return on adverting spend (ROAS). The figures presented in this study are based on hundreds of millions of observed data points and thus deliver a much more accurate and scientific measure of true attribution compared to the typical scenario or econometric modeling based approaches (which are usually based on significantly less data points). 08 However, the study results are an average across multiple clients in the financial service industry and may vary for your own company and vertical so we highly recommend you implement your own multi-touch attribution for the best possible results. Furthermore, given there is hardly ever a single solution to a problem simply increasing Facebook or display advertising spend is not going to be enough. Like any other channel a successful campaign strategy does not only depend overall budget but also requires a good offer, effective creative and ongoing test and optimisation program. Finally, even though paid search (SEM) is likely overvalued that does not mean it does not work and should be switched off. It simply means the overall spend is not necessarily justified by the returns so optimisation and creative ways of reducing costs are required to again increase ROAS, The same goes for Facebook ads and display advertising that already have a positive ROAS - with a bit of optimisation the overall ROAS can be boosted even further. ATTRIBUTING CREDIT $100 $100 100% Y% Z% Last-click attribution Multi-touch attribution SEMI-PARTIAL CORRELATION COMPARING CONVERTING AND NON-CONVERTING PATHS TOUCH POINT 1 TOUCH POINT 1 TOUCH POINT 1 TOUCH POINT 2 TOUCH POINT 2 TOUCH POINT 2 INFLUENCER INFLUENCER CLOSERINTRODUCER TOUCH POINT 3 TOUCH POINT 3 TOUCH POINT 3 TOUCH POINT N TOUCH POINT N TOUCH POINT N $ X% Click here for more information on the Datalicious methodology.

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