Rock-Paper-Scissors: Tips for Playing the Marketing Attribution Guessing Game
The proliferation of channels has been a game-changer for marketers in many significant ways, as there are now countless tactics and platforms for driving customer engagement. This variety is great since the average prospective customer in today’s marketplace requires an assortment of advertising messages before taking action. However, it poses a measurability challenge for businesses: how do we attribute revenue when we have so many different marketing programs in play?
This dilemma has created a vigorous debate among marketing industry experts. Should credit for a sale go to the marketing touch that served as the customer’s first point of awareness? Or should the revenue be attributed to the final touch before point of sale? And then, what about all of the marketing that sustained the customer journey in between? There is still no clear consensus on the best approach. So while the marketing industry continues the quest for the attribution “Holy Grail,” there are a few different methodologies we can use now to help quantify the value of our advertising efforts in a multi-channel world.
The weighted attribution model is very effective for measuring ROI, particularly if you have multiple parallel campaigns with substantial ad spend across the board. Each marketing touch is assigned an influence value and credit is dispersed accordingly. Typically, the key drivers in a sale – such as your direct response vehicles – are allotted larger influence values. The upside to this approach is that the analytics are customized to your particular business, but it can be a little more complicated and time consuming to execute.
Position-based attribution is similar to a weighted approach, except that the credit allocation is determined by the sequence of interactions, not necessarily the type. The first touch and the last touch split the majority of the revenue and the rest is evenly distributed to the marketing in between. Here’s an example:
- Direct Mail Postcard (30%)
- Company e-Newsletter (10%)
- Free Samples/Trial (10%)
- Website Demo (10%)
- Display Ad (10%)
- Offer By Email (30%)
The success of this model hinges on a business’s ability to track each individual’s journey leading up to a sale.
A weighted or position-based attribution model might be out of reach for a start-up or small business. For many companies, last-touch attribution is a popular choice. The interaction that precedes a conversion gets 100 percent of the revenue. This is not only a simple model to use, but it helps uncover insights surrounding a critical piece in your marketing programs – the touch that happens just before a sale.
A closing thought: as clichéd as it may seem, trust your instincts when assigning credit to all of the possible contributing marketing efforts. You were likely involved in the planning, execution and/or fulfillment for the promotional strategy, so who better than you to quantify the output for each channel. Besides, your informed and educated guess has to be better than betting on the paper to cover the rock.
By Jeanine Norlin, Senior Marketing Manager, Modern Postcard
Call a Direct Marketing Specialist at 800.959.8365.