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Attribution and ROI Measurement


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Attribution and ROI Measurement was presented by Steve Latham at Search Engine Strategies 2010. To request a soft-copy please reach out via Twitter, LinkedIn or Facebook.

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Attribution and ROI Measurement

  1. 1. Attribution and ROI Measurement! What to Measure and How to Demonstrate Value Steve Latham, Spur Interactive! @stevelatham
  2. 2. A long time ago… There were two types of advertisers   Brand marketers (ATL) Strategic Direct Response (BTL)   Tactical Brand marketers bought display   Metrics: reach, frequency and cost per impression   Measured by: Ad Server   Assumed premium inventory = more qualified reach Display   View-through was interesting but not important Direct marketers bought PPC and 3rd party email   Metrics: Leads / Sales, Cost Per Click, Cost Per Action   Measure by: Site Analytics (crediting source of last click) Search Everyone knew the rules and everyone was happy 2 Attribution and ROI Measurement
  3. 3. Today… Digital goes through the line   Strategic and tactical Awareness 
 (Display, Email, Social,   Branding and DR are merging Mobile, Fat Tail Search)   Social spans all channels Consideration
 Integrated campaigns target all stages ! (Display, Mid-Tail Search, Social) of the funnel   Can’t win by harvesting demand (search) Preference
   Must create demand (display, social, mobile) Search, Social (Long-Tail Email) Focus on ROI is greater than ever Action
   Each investment must stand on its own (Social, Search, Email) Yet… metrics and tools are not sufficient 3 Attribution and ROI Measurement
  4. 4. Marketing Conversation #1 How is our online advertising working? Great Boss! Wonderful! How do CTRs are up and CPCs are the results look? down! Length and depth of engagement are increasing and conversion rates are improving! We’re also nominated for a What the *#^@*! are you Webby! talking about? 4 Attribution and ROI Measurement
  5. 5. Marketing Conversation #2 How is our online advertising working? Great Boss! Wonderful! How do the results look? We’re generating $7 in sales for every $1 spent while increasing brand awareness by 75%. Can you handle a bigger budget? 5 Attribution and ROI Measurement
  6. 6. Challenges We now know…   Awareness matters Yet…while online is the   Clicks aren’t very important most measurable medium,   8% of users contribute 80% it’s often held to a much   Ads are effective without clicks higher standard   Can’t give credit to the last click   Assists are just as important ROI measurement is critical   Site analytics miss a lot   Cookie deletion & multiple devices   Tools are still lacking (and pricey)   Calculating online impact on offline sales is hard! 6 Attribution and ROI Measurement
  7. 7. The Solution (?) There is no silver bullet Roadmap for success: 1.  Define specific objectives 2.  Define campaign actions and metrics 3.  Measure the right results 4.  Translate results into value 5.  Communicate results in terms CXOs understand (ROI) Here’s how to do it with paid and earned media 7 Attribution and ROI Measurement
  8. 8. 1. Define Specific Objectives Objectives must be SMART   Specific: awareness, transactions and sales   Measureable actions: transactions and revenue   Attainable: 20% increase over last year   Relevant: tie directly to CXO’s objectives   Time-bound: will take place this month Tips:   Think about them from CXO’s ! perspective (ROI)   Document them   Communicate them 8
  9. 9. 2. Define Actions and Metrics Campaign actions and metrics (e.g.)   Primary: registrations, sales   Secondary: goal pages,! long visits, downloads, etc.   Online vs. Offline: coupons,! survey results Assign Value to Actions (e.g.)   Average sale = $1,500   Conversions = $150 (assuming 10% of conversions close)   Visitors = $3.00 (assuming 2% of visitors “engage”) 9
  10. 10. 3. Measure the Right Results   Direct KPIs   Attributable results 10
  11. 11. Direct KPIs Basic Metrics Engagement metrics   Impressions   Pages viewed per visit   Clicks   Time on site   Visits   Goal Pages   Page views   Registrations   Transactions Social Media Metrics   Follows / Fans   Likes / Comments   Mentions   Viewing content   Sharing / Posting 11
  12. 12. Attributing Credit: The New Imperative   Decision cycles are not linear   Users often make multiple before taking action   Most “conversions” take place after multiple touches, e.g.: •  5-7 impressions precede a visit •  2-3 visits precede an action   Credit usually attributed to last click   Design limitation of analytics platforms   Rewards Search   Punishes Display, Email and Social   The Goal:   Understand which touch points precede each action   Assign value to those touch points (“Attribution Analysis”) 12
  13. 13. Sample Engagement Path What we can measure via ad server and site analytics: Impression Impression Impression Impression Visit Visit Visit / Action Display Display E-Mail Display Paid Organic Direct Nav Vendor #1 Vendor #2 3rd party Vendor #3 Search Search Category term Brand / Geo Day: 0 15 30 The “direct nav” lead was preceded by 4 ads and 2 searches - Without this insight – you may axe a smart media buy 13
  14. 14. Attributing Credit: Paid Media Step 1 - Recast Actions* by Source (*actions = visit, conversion etc.)   Quantify the number of touches that preceded each action   Assign value to each touch point (e.g. 7 impressions = 1 click)   Recast the number of touches and assign credit proportionally   See a more accurate picture of Display’s impact on results Lift: 300+% 14 Attribution and ROI Measurement
  15. 15. Attributing Credit: Paid Media (cont.) Step 2 – Based on Recast Actions, calculate revised Cost Per Action for each Source Drop: 70%+ 15 Attribution and ROI Measurement
  16. 16. 4. Translate Results Into Value To measure ROI, you first have to calculate the value Determine how Actions  Intent (offline purchase) Action Value Site Visits Indicates awareness Goal Page Views Indicates consideration Long Visits Indicates consideration Conversions Indicates preference Forecast how Intent  $$$   Some % of those who show Intent will buy   Do the math and apply across each set of actions   Use common sense to normalize results 16
  17. 17. Engagement ROI Methodology Project Normalize Divide by Define Assign Value for (average) Cost or Metrics Close Rates each action Values investment Such as: Forecast: Project Values: Strengthen by: Net it out: •  Impressions For each Metric: For each Metric: •  Eliminate •  Return on outliers Spend (ROS) •  Visits •  What % will buy? •  Revenue •  Return on •  Returning Visitors •  What % will •  Margin Investment influence a (ROI) •  Goal Page Views purchase? •  NPV •  Conversions 17
  18. 18. Engagement Funnel / ROI Model AWARENESS
 (Long Visits, Goal page views) PREFERENCE
 (Register) 18
  19. 19. 5. Communicate Results Effective Communication is a Must   Communicate results that matter   Communicate them in a way CXOs will understand   Use terms they use   Leads, Opportunities, Sales, Customers, Margin   ROS, ROI, NPV   Use Charts and Dashboards   But have supporting data 19 Attribution and ROI Measurement
  20. 20. How We Should Measure Social Media ROI In a perfect world, we would:   Connect the dots between results and social interactions   Within Twitter stream and on Facebook pages   Blog and related social mentions   ReTweets, Mentions, Likes, Favorites, Shared Content   Integrate social engagements into ! campaign reports   Attribute credit for social assists   Assign economic value   Calculate ROI But… it’s far from a perfect world 20 Attribution and ROI Measurement
  21. 21. The Goal: Incorporate Social Engagement Social 21 Attribution and ROI Measurement
  22. 22. The Reality Few have the tools and capabilities to execute this level of measurement and analysis And as with paid media, you can’t measure everything   It’s impossible to connect every visit, conversion or purchase back to a paid or social interaction That said… there are ways to build a business case   Advertising Equivalency   Market testing   Social Engagement modeling 22 Attribution and ROI Measurement
  23. 23. Advertising Equivalency Value (AEV) Borrowing from playbook of PR firms…   Estimates value of earned media by comparing to the cost of an advertisement   Size of the mention   Reach of the post   CPM grossed up for “editorial value”   Has some shortcomings:   It’s hard to gauge true reach   All mentions are not equal •  Sentiment / Tone •  Length / depth •  Credibility of the writer   When to use it:   When client is already used to this approach   When you have no other means  23 Attribution and ROI Measurement
  24. 24. Market Testing To isolate the impact of social media, construct a test   Define strategy for a test campaign:   Geographic market   Specific product, service or offer   Define the test and the control groups   Execute campaign and measure relative lift:   Site traffic: visitor geos, site sections, specific pages   Conversions, leads, sales, etc. 24 Attribution and ROI Measurement
  25. 25. Incorporate Surveys into Market Testing Ask customers if they have:   Been to your web site?   Been to your Facebook page?   Followed you on Twitter? Compare results to control group 25
  26. 26. Social Engagement Modeling Goal: determine how Social Interactions drive sales (via WOM) Action Value Multiplier Referring Visits Consideration Very low Fans/Followers Loyalty Low Mentions/RTs/Faves/Likes Preference Medium Prominent Blog Mentions Preference High To forecast results, account for the impact of WOM   Incorporate a Multiplier in your Calculations 26
  27. 27. Engagement Funnel / ROI Model AWARENESS
 (Long Visits, Goal page views) PREFERENCE
 (Register) 27
  28. 28. In Closing…   The bar is being raised… we have to do better.   While there’s no panacea, you can build a solid business case   Employ this 5-step approach and your budgets will grow! Let’s stay in touch!    Twitter @spurinteractive  28