Attribution management is the practice of allocating credit (revenue, profit, etc.) across the team of advertising responsible for a conversion (sale, lead, download, etc.) versus giving the very last ad clicked all of the credit. Any good Internet marketing professional knows that assigning all of the value to the last ad clicked before the conversion is inherently flawed. Most Internet advertisers, however, lack:
1. The tracking technology required to determine the actual team of ads and their sequence that lead to the conversion, and
2. The valuation methodology to properly assess each ad’s true contribution and value to the conversion.
There are a few technologies emerging that are able to effectively track and assemble the team of ads leading to conversion, including our own Purchase PathTM. technology. With over 2 years of market presence with our attribution management technology, we have been able to capture millions of “purchase paths” across dozens of companies and numerous industries. The remainder of this blogs highlights some of the major “learning’s” and insights we have been able to draw from the massive amount of attribution management data we have collected.
- Branded Keywords:
- Whether you are an established or new brand, an eTailer or lead generator, in the B2C space or B2B space, the most common Purchase Path we have observed is where the last ad prior to a conversion is a branded keyword from a search engine.
- Ask yourself, what is your best performing keyword? I would be willing to bet that your answer is some derivative of your company’s name. The reason why companies believe these branded terms are best is due to their inability to track and view a Purchase Path. Our data has conclusively proven that users are generally not searching for your brand at the start of the buying cycle; rather they are searching for the types of services and products you offer. It is during these searches that they discover or become acquainted or re-acquainted with your brand. Once they get to this point, the user may look at other options, or your competition, and after doing so, they “navigate” back to the site that has the best offering and value. The most common way to “navigate” back to a site is to type the company name into a search box and click on a paid search advertisement. It is this common search behavior that inaccurately inflates branded keywords and makes companies improperly conclude they are their best form of advertising.
- Because of this branded keyword bias that exists today, your other forms of advertising are often undervalued, such as banners, emails, and category-level keywords that generally occur early in the customer buying cycle.
- Window of Time:
- Shortly after we developed our Purchase Path technology, the question of ‘How far back in time should we track the path when doing attribution management?’ arose. For example, if you have a website that sells toasters and someone clicked on an ad 2 years ago, then clicked on an ad today and bought a toaster, technically that is a Purchase Path. However, most marketers would agree that the ad clicked two years ago had no impact on the sale that occurred today. Given this intuitive issue of time relevance of an ad’s effectiveness and impact, it becomes imperative that any advertising analytics technology that focuses on Attribution Management needs to include a time-based parameter that controls how far back in time one should go when assembling their purchase paths.
- One method that we developed to help answer this question analytically is to plot your sales on a spreadsheet from the time of first click to sale. Once a large enough sample of your sales has been captured to be statistically sound, take a look at the time that it took to get 80% of your orders from first click to buy and also look at the time it took to get 90% of your orders. You can then rationally set your Purchase Path time parameter as the average time it took to get between 80% and 90% of your orders.
- We have found that one time window does not fit our entire client base. The types of products/services you sell, their price points and average sales cycles are the three biggest factors that will influence the appropriate purchase path time parameter for your company.
- Introducers, Influencers, Closers:
- Our Purchase Path tracking technology showed that it often takes more than one ad to earn a customer. For most of our clients, over 50% of their customers clicked and/or saw more than one advertisement before becoming a customer. To help understand the interactions and roles of ads in a Purchase Path, we created some base classifications to categorize these ads:
§ Introducer- the very first ad the prospect saw or clicked
§ Closer- the last ad clicked prior to the conversion
§ Influencer- any ad that is seen or clicked between the Introducer and Closer
o When we work with a new client, we find that the majority of their ads fall in the Closer ads, and they have very few Introducers and Influencers. If you think about it, this makes a lot of sense. Companies can only justify buying advertising that demonstrates it has value. Without the benefit of being able to see a Purchase Path, the only ads that appear to have value are the Closing ads. The introduction of this classification system allows us to rationally group ads into logical buckets and in doing so, more accurately value them, no matter where they appear in the buying process.
- Comparison Shopping Engines and Search:
- Perhaps the form of advertising that is undervalued more than any other is Comparison Shopping Engines (CSEs). CSEs more often than not fall in the Introducer or Influencer stage. We have discovered that consumers use CSEs to compare prices, click on the listing they deem to be the best, leave the site that had the best offer, then go to a search engine and search for that same company by name (branded term). From there, they click on the company’s branded ad and complete their purchase, thus giving all the credit to the search engine and none to the CSE. Our analytics do not tell us exactly why consumers do this, but one theory is that consumers are uncertain as to how CSEs make money. Consumers may believe that CSEs jack the price up a bit; therefore, consumers think if they go directly to the site through a branded term or direct visit, they may find a lower price. When they realize the price is the same, they do not go back to the CSE and simply remain at the site to make their purchase.
If you are a marketer that is currently tracking the Purchase Path and performing attribution management, then we would love for you to share your findings to our own data. In effort to advance the knowledge of attribution management, ClearSaleing will be co-hosting a webcast with Search Marketing Now on October 28th that will survey experienced online marketers about different attribution models, or various ways to properly allocate revenue and profit to each contributing ad in a conversion. If you would like to understand how other marketers are handling attribution, please sign up for this webinar: www.clearsaleing.com/attribution.