If you are not using some form of Attribution Management when evaluating the performance of all the elements of your marketing mix, then you have an even greater opportunity of maximizing the ROI of your marketing investment. If you are applying attribution management principals to your performance evaluation, you have made the move to the top of the online marketing sophistication food chain.
While your competitors are still attributing conversion credit to the last ad clicked, you are attributing credit to the entire team of ads that led to the conversion. This new measurement methodology is going to allow you to:
- Conclusively prove the value of certain types of ads, like banners and emails, which typically occur earlier in the buying cycle.
- Properly attribute value to your search ads that, up until this point, have probably received too much credit.
- Make smarter media buys and invest in new forms of marketing that previously could not be justified.
- And most importantly, to increase the profits earned from your online marketing budget.
Seems simple, right? Unfortunately, like with any new endeavor, the devil is in the details, and Attribution Management is no different. If you are unaware of some of the key factors that influence the Purchase Path and your ability to perform Attribution Management, your new initiative may not be as impactful or successful as originally hoped. There are 3 principal pitfalls that, if properly addressed, will go a long way to ensure that your Attribution Models will be more accurate and that you will be much more likely to enjoy the benefits that Attribution Management can deliver.
Double and triple counting conversions or worse:
One of the biggest risks with Attribution Management today is the potential to count more conversions than actually took place. This can happen in several ways, including:
- If you have more than one conversion tracking code on your site. For example, if you have Yahoo and Google conversion tracking, and a person clicks on a Yahoo ad, then clicks on one of your Google ads and then converts, both engines take credit for that. The Yahoo conversion tracking does not know that Google was also involved and vice-versa.
- Larger companies typically have a person or team dedicated to search, another team for display, and another for SEO, etc. Each has to generate reports to show the value of the work they do. If the display team can show that a particular conversion that ended with search also was shown a banner, they will want credit, but so will the search team. If, in that same conversion, an organic search was performed, then the SEO team is going to want to take credit, as well. When you have multiple teams all trying to justify the work they do, you are likely to end up with inflated conversion counts.
Solution: Instead of using the tracking tools provided by the ad sources, invest in or develop your own tracking technology. The use of a 3rd party or in-house advertising analytics technology will prevent the double counting and will prevent various teams in your organization from taking individual credit for the same conversions. To go one step further, you should standardize the metric you are using to measure and attribute performance across the team of ads, which leads to the next point…
Not attributing profit:
Another big problem in the application of Attribution Management at many companies is what and how they actually attribute and assign value across the contributing team of ads. You need to ask yourself the following questions: What is a conversion worth? Are 10 conversions better than 1? Are some conversions better than others? Are all conversions profitable?
- A conversion is valuable to an organization if it produces profit. A conversion that loses money for a company is not desirable (though one could make an argument for loss leaders or Life Time Value (LTV) here). In order to truly determine if a conversion is valuable, you need to dig for more information. Specifically, you need to know: (1) What did it convert? (2) How many advertising dollars were needed to generate that conversion? and (3) What was the margin generated from the conversion?
- If you are able to answer these questions, then you can start attributing profit vs. conversions to your team of ads. Or, if you want, you can do both. Profit does not lie. If an ad is profitable, it is worth keeping and investing more money towards. If you only know that an ad produced a conversion, you still do not know if it is profitable and therefore, worth keeping.
Solution: When deciding on an advertising analytics technology that allows you to perform Attribution Management, make sure it is able to track more than just the conversion or revenue generated from the conversion. It must be able to track profit. And in order to calculate profit, the advertising analytics platform needs to know which products were purchased as a result of the conversion, their respective margins, and the cost of all the advertising that led to the conversion. Your marketing meetings will be greatly improved when you can definitively say you spent X dollars on advertising, which generated Y profit for your company, versus saying you spent X dollars on advertising and generated Y conversions. You have probably already been asked the questions that more and more CMOs and CFOs are asking their marketing teams: “What did we spend? What did we convert? How much profit did that produce? And what is our ROI on that expenditure?”
Time
The final of our 3 pitfalls relates to the time period over which companies actually assign attribution. You need to consider several questions when assessing the proper timeframe for attribution management: How far back in time should I look when doing attribution? Should I credit ad clicks that may have occurred a year or two ago if I can track them, or should I focus on a shorter window of time? How can I figure out what the right window of time is for my company?
- Your answers to the above questions depend largely on the type of business you are in and the associated length of your sales cycles.
- The attribution management tools provided by the search engines are very limited when it comes to customizing the length of the attribution cycle to match your specific business attributes. The engines build one-size fits all tools and the one-size they fit is what fits best for the search engines to make the most profit.
- Some of the engines show the number of