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MARKETING ATTRIBUTION IN A MULTI-TOUCH WORLD

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“The achievements of an organization are the results of the combined effort of each individual.”~ VINCE LOMBARDI

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In today’s complex, multi-channel, multi-device marketing landscape, it’s essential to understand the efforts and results of each marketing channel you employ. In marketing, this is referred to as attribution and the long-term success of your business depends on it.

Attribution has been a hot topic in the past few years, but it’s often misunderstood or misrepresented. A simple definition of attribution is:

The process of identifying the marketing touchpoints that contribute to a given conversion and assigning proportional credit to each one.

Across an organization, attribution affects:

• how marketing decisions are made

• how budgets are allocated

• how revenue is optimized and

• how success is measured

INTRODUCTION

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Attribution has become increasingly important in the past five years because how consumers act online has changed drastically.

The explosion of marketing channels and devices has added layers of complexity to what was, a few years ago, a relatively simple funnel.

This has made it incredibly challenging for advertisers to determine which marketing methods are working, how they interact with each other, which ones are adding value and which ones aren’t.

For example, the image below shows a single user navigating across multiple channels, including paid and organic, toward their path to purchase.

As you can see, the average shopper uses a multi-touch process over many days and devices.

[source: Impact Radius]

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[source: kaushik.net]

Before selecting an attribution technology platform or deciding which type of attribution model to use, it’s essential for you to first determine what you want to measure. Four primary options are:

ONLINE TO OFFLINEIn this model the goal is to understand which digital marketing channels contributed to a particular offline conversion.

MULTI-CHANNEL ATTRIBUTION (ACROSS DEVICES)Understanding attribution across multiple screens and advertising channels (TV, Print, Digital)

MULTI-CHANNEL ATTRIBUTION (ACROSS CHANNELS)Understanding attribution across digital channels and touchpoints (Search, Display, Social, Mobile)

POST CONVERSION ATTRIBUTIONMeasuring phone calls and post-lead downstream sales through CRM integration.

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[source: : eMarketer.com]

In addition to measurement, there are many reasons advertisers find attribution vital to their marketing process, including:

Marketers place a high priority on attribution models to justify digital ad spending to make sure they are investing their dollars wisely in the right channels.

Justifying digital spending

High Priority

0% 20% 40% 60% 80% 100%

Medium Priority Low Priority

Create most e�ective media mixbased on true value toward conversion

Understanding funnel and sales cyclelength to plan campaigns

Correctly determining a­liate payments

62% 28% 10%

57% 36% 7%

47% 42% 11%

36% 39% 25%

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Once you’ve determined what you want to measure and why you want to measure it, you then need to determine what attribution model to use.

Attribution models help determine the impact and contribution of each channel on sales, offering a more accurate picture of marketing spend and allowing companies to budget their marketing dollars accordingly.

In relation to multi-channel attribution across digital channels and touchpoints, there are seven primary attribution models.

When reviewing these different models, it’s important to keep in mind that there is no right answer. There is a lot that needs to go in to deciding which attribution model is right for your business and we’ll address what that entails later in this e-Book

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SEVEN ATTRIBUTION MODELS TO CONSIDER

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1. FIRST CLICK ATTRIBUTION This model weighs more heavily on a customer’s first touch. First Click attribution may be a good model for companies who are focused on growth and introducing new people to their brand. With that said, this model is controversial because it doesn’t account for any of the following touches that may very likely have impacted a conversion. As a result, marketers may end up eliminating important later channels because they aren’t sure of their value.

SOCIAL

100%

0% 0% 0%

AFFILIATE DISPLAY SEARCH

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2. LAST CLICK ATTRIBUTION This model became prevalent in the last ten years as advertisers became wary of the First Click attribution model, cookie stuffing and the use of toolbars in affiliate marketing. A high-percentage of companies use Last Click attribution because it’s a relatively easy model to create, however it too is quite controversial as it doesn’t account for any of the prior touches that may have impacted the buying behavior.

SOCIAL

0% 0%

AFFILIATE

0%

DISPLAY

100%

SEARCH

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3. LINEAR ATTRIBUTIONThe Linear model strives to ensure that every channel gets credit. This model may be a more diplomatic model, but it’s not always the best for business as a whole. The drawback to Linear attribution is that efforts may be duplicated, so you could end up paying more in certain channels than you need to. In addition, since this model doesn’t provide the best insight into channel performance, it’s often unclear which ones are having the greatest impact.

SOCIAL

25% 25%

AFFILIATE

25%

DISPLAY

25%

SEARCH

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4. TIME DECAY ATTRIBUTIONWhile the Time Decay model is fairly agnostic across channels, it can also be good for rewarding the channels that are driving activity right before a conversion occurs.

SOCIAL

10%20%

AFFILIATE

30%

DISPLAY

40%

SEARCH

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5. U SHAPE ATTRIBUTION The U Shape model gives more weight to the introducer and the closer channels, but also values the channels in the middle.

SOCIAL

40%

10%

AFFILIATE

10%

DISPLAY

40%

SEARCH

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These last two models are more affiliate marketing-focused.

6. CONTENT BOUNTY ATTRIBUTION Content Bounty attributes more credit to content affiliates.

7. ADD-TO-CART ATTRIBUTION The Add-to-Cart model gives all or most weight to the channel that a user engages with right before they add the product to their shopping cart. Wayfair was one of the first companies to apply this model to their affiliate channel.

SOCIAL

10%

50%

AFFILIATE(CONTENT)

10%

AFFILIATE(COUPON,

LOYALTY, ETC.)

30%

DISPLAY

SOCIAL

0% 0%

AFFILIATE

0%

DISPLAY

ITEM PUT IN BASKET

100%

SEARCH

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STATE OF ATTRIBUTIONUnderstandably, there is a lot of confusion around attribution, which is why a significant number of B2C and B2B companies don’t even have an attribution model in place.

[source: eMarketer.com]

With better information and attribution platforms available, it is estimated that half of Digital Marketers will transition to Multi-channel attribution by 2017.

[source: eMarketer.com]

ATTRIBUTION MODELS USED BY US B2B AND B2CMARKETERS TO MEASURE ROI, NOV 2014% of respondents

Source: Webmarketing123, “2015 State of Digital Marketing.” Feb 10, 2015

Multichannel (all influencing touchpoints)21%

Last touch (conversion)19%

First and last touch (lead source & conversion)18%

First touch (lead source)15%

Other9%

Don’t have an attribution model in place38%

US COMPANIES USING MULTICHANNELATTRIBUTION MODELS, 2012 - 2017

2014

% of total companies% of companies that use digitalattribution models

22.9% 30.1% 39.8% 50.6%

37.5% 43.0% 51.0% 61.0%

2015 2016 2017

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ATTRIBUTION IN ACTIONAll marketing efforts can benefit from attribution, including paid marketing, organic search, affiliate, display, social marketing, video, etc. But how do you determine which model is right for you?

GOOGLE ANALYTICSIf you have a goals and/or ecommerce set up within your Google Analytics (GA) account (either the standard or premium implementation), you can take the different models mentioned above and overlay them with your existing data. For example, you could compare what Last Click looks like versus First Click versus Time Decay, etc.

It’s important to note that, in order to see data in these reports, you must have first have goals or e-commerce tracking set up in Google Analytics, as well as have sufficient tracking set up in all the different channels you are using. For example, manual UTM tracking in Facebook; tagging your destination URL’s correctly; AdWords tracking, etc.

This is the only way that you’ll be able to get a clear and accurate and picture when you use GA’s reporting tools.

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BE AWARE OF GOOGLE’S ATTRIBUTION DEFAULT SETTINGSomething you may not be aware of is that, all standard reports in Google Analytics (with the exception of the Model Comparison Tool) default to Google’s Non-Direct Last Click attribution model.

What does this mean?

It means that Google Analytics gives 100% of conversion credit to the last “campaign” prior to the conversion. Campaign is defined as anything but Direct traffic (i.e. when a user types in your URL directly). The campaign could be affiliate, paid, organic search, social, display, email, etc.

For example:

• The first touch to your site could be through Facebook.

• The second touch from the user typing in your URL directly (nothing purchased).

• The third touch from an affiliate blog post (nothing purchased).

• The fourth touch from an AdWords search a specific product on your site (nothing purchased).

• The fifth touch from the user typing in your URL again and then buying something.

FACEBOOK DIRECT URL AFFILIATEBLOG POST

ADWORDSSEARCH

DIRECT URL (nothing purchased)

(nothing purchased) (nothing purchased)

100%

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The touch (campaign) that would get 100% of the credit would be the AdWords search for the specific product (fourth touch).

The problem with this attribution model is that it undervalues the earlier touchpoints and fails to acknowledge the traffic sent to your site from someone typing in your URL.

The takeaway: It’s in your company’s best interest to not rely on Google’s default attribution setting. Instead, use Google’s Model Comparison Tool to adequately determine how you might give fair credit to each of your marketing channels.

RECOMMENDED GOOGLE ANALYTICS REPORTS – FOR BEGINNERSThe simplest way to start working with Google Analytics for Attribution purposes is to look at three tools in GA:

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ASSISTED CONVERSIONS REPORTIn this report, you want to look at the last column: Assisted/Last Click or Direct Conversions.

• If you see a value less than one, it means that channel has a higher tendency to drive last click conversions.

• If you see a value greater than one, that channel tends to be present earlier in the conversion cycle. If you use a Last Click attribution model, these channels get zero credit.

[source: kaushik.net]

While you may not want to assign revenue to a channel that’s assisting a conversion, there is a lot of value that can be gleaned from an optimization standpoint.

Finding those assisted conversions can lead you to those “diamonds in the rough” channels, such as keywords and placements that are introducing people to your brand and influencing purchases further down the funnel. Facebook is a good example of this. Facebook doesn’t often lead to a conversion, but it is highly influential in assisting them.

Once you gain more insight into which channels are assisting conversions, you or your executive team will likely want to know which channels in the mix come first, second, third, fourth, fifth, sixth, etc. and, of course, last. This is where the Top Conversions Path report can be useful.

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TOP CONVERSION PATHS REPORTWith this GA tool, you’ll be able to visualize:

• which path a user took to complete a conversion

• how many touchpoints there were

• how the average customer interacts with your brand before converting and

• which touchpoints in the path had the most effect (as well as which paths might be discredited due to GA’s non-direct last click attribution model)

The Top Conversion Paths report is also a powerful tool for showing fellow team members and decision-makers that, with so many paths, it’s impossible to actually control the path that a potential customer takes.

With that knowledge, the next logical question is, “How should we be properly attributing credit to all our marketing channels?”

This is where Google Analytics’ Model Comparison Tool comes in handy.

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MODEL COMPARISON TOOLAs its name suggests, this tool allows you to look at all your channels and compare three different models with one another, including Google’s default non-direct last click.

It also allows you to:

• Use pre-set attribution models, including:

• Last Click (last interaction)

• Last Non-Direct Click (GA default)

• Last AdWords Click (Last AdWords campaign interaction gets all the credit)

• First Click

• Linear

• Time Decay

• U Shape (position-based)

• Create a custom model

The Model Comparison Tool is a useful tool for seeing which channels are benefiting without having to first change your whole process and existing reporting methods. When comparing multiple data sets, the key is to look at the movement, i.e. which channels are benefiting when you change your model.

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As you explore Google Analytics and start looking deeper into your data, you’ll likely find insights that will challenge your assumptions about how your customers buy.

The important thing to remember is that no one system is right for every merchant (which is why GA’s default non-direct last click is so problematic). In terms of getting on the path to figuring what attribution model is right for your company, it’s critical to look at your data and apply it to different models.

Attribution is more of a process than a destination. It’s requires that you test, refine and implement your process slowly and carefully.

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CUSTOMIZED ATTRIBUTION PLATFORMSThere are a number of market-leading customized attribution platforms available, with some being more suited to online-to-offline versus multi-channel online, etc.

While Google Analytics is a great platform to start understanding and improving your existing attribution, some advertisers are ready to take their attribution to the next level by using a more advanced platform that can provide deeper insights into strategy and incrementality.

A few examples of these customized attribution platforms include:

[source: Forrester]

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When an advertiser decides on and implements an attribution model, it’s not uncommon for them to:

• Increase in spending in some digital marketing channels. They’ll seek those “diamond in the rough” channels that are contributing more than they are currently getting credit for.

• Maintain or slightly decrease spending in some digital marketing channels. The reason for this is that some of the channels that are “negatively” affected by new attribution discoveries are the lower funnel acquisition channels (e.g. direct traffic, email marketing, etc.).

[source: eMarketer.com]

0%2%

1%

20%

30%

10%

40%

50%

60%

9% 8%

23%

13%

52% 51%

14% 15%

Decrease inspendingacross all

digitalmarketingchannels

Clients Agencies Number of respondents: 401

Decrease inspending insome digitalmarketingchannels

No impact ondigital

marketingspend

Increase inspending insome digitalmarketingchannels

Increase inspendingacross all

digitalmarketingchannels

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A COMMON ATTRIBUTION PITFALL: DOUBLE COUNTINGWhile it’s incredibly valuable to understand which channels are assisting with and directly leading to conversions, it’s also essential to get a handle on which channels are generating what revenue.

The all too common issue in most companies is that both internal and external channels (e.g. SEO, affiliate, PPC, etc.) all tend to have their own sales tracking. Rarely, however, does each channel’s reported revenue add up to what the company actually generated.

For example, the SEO team may state that they contributed $1 million, as does the affiliate team, the PPC team, the display team and the social media team. When all added together, it would seem as though $5 million in revenue was generated for the company from these channels; in actuality, it’s only $2 million.

So what happened? Why the disparity?

Double counting. The problem is twofold:

1. Every channel is taking ownership for revenue generated by using their own sales tracking.

2. There isn’t a good attribution model in place to authenticate their numbers. As a result, 1 + 1 + 1 + 1+ 1 = 2 and not 5.

So what can be done?

1+1+1+1+1 = 2

1+1+1+1+1 ≠ 5NOT

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GO FROM MANY TO ONE A good solution to double counting is to transition from using and receiving many reports from different internal and external channels to using only one report. Allowing every channel, including vendors, to use their own reporting only tends to result in bad accounting.

While the individual metrics generated by the different channels can definitely provide some valuable insights, it’s important to look at them through the right lens as opposed to putting all of those metrics in the same report – otherwise, the math won’t add up.

To help get everyone on the same page with regard to the accuracy of your data, it might be helpful to use a single dashboard that is visible to everyone.

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INTERNAL VS. EXTERNAL ATTRIBUTIONInternal Attribution is what many companies are currently implementing to try and reconcile their 1 + 1 + 1 + 1 + 1 = 2 form of accounting.

Internal Attribution:

• Assigns credit and resources to marketing channels and internal departments

• Helps determine marketing budgets

• Decides how/if to pay affiliates and how to work with external partners

It’s important to understand that it may take you years to get your internal attribution right. Remember, attribution is a process, not a destination. Take your time and get a useful, relevant system in place so you can derive the most value.

External Attribution is the process of taking the data gleaned from their internal attribution model and projecting it externally to negotiate with partners or, in the cases of a performance arrangement, change how those partners are paid.

External Attribution:

• Involves changing payments to external marketing channels, either in real time or in aggregate (e.g. 3 months) so that they are more in line with the merchant’s internal attribution model.

• In the EU, there are cases where companies will use their internal attribution model to externally de-dupe affiliate against other channels (e.g. content affiliate versus coupon affiliate) in order to reward the right behavior.

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A word of caution before moving attribution from internal to external. It’s fine to have a complicated internal attribution model. However, when you apply it externally, it’s best to simplify it and make it as transparent as possible for your partners.

Example of a Bad Internal to External Attribution Application: Company X

Internally, Company X used the Last Click attribution model and their affiliate attribution model looked something like this:

• 30% commission on services

• 10% commission on products

• 30 day cookie

From Company X’s perspective, it was problematic that their external rules governing affiliate payouts didn’t line up with how their internal Last Click attribution model acknowledged value.

To try and align affiliate payouts with their internal attribution, the company shifted to a new, complex system of external affiliate attribution that looked something like this:

• 7 day cookie for new customers

• $25 flat fee on services

• $12.50 flat fee on products

• 1 day cookie length for existing customers

• 30% commission on services

• 10% commission on products

While it may have been logical in theory, in practice, this complex change meant that a lot of affiliates no longer got paid for their efforts. It was also confusing for affiliates to work out what promotional activities were valuable, which led to frustration.

To prevent this kind of turmoil, the company could have created an average commission level across new and returning customers. Better yet, it could have explored other internal attribution models that would have more accurately valued the affiliate channel and the individual content affiliates within it.

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Example of a Good Internal to External Attribution Application: Wayfair

Wayfair has had internal attribution for over ten years. This has given them the time to work out which model works best for them (Add-to-Cart) and made it possible for them to successfully apply their internal attribution to their external policies.

In addition to having a solid internal attribution model in place, Wayfair also did an exceptional job communicating their internal Add-to-Cart model to their affiliate partners. They made it clear that what they value is the click that gets the item into the cart – not clicks before or after. This clarity made it easier for Wayfair’s partners to understand what is valued so that they could focus their marketing efforts around that model.

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Once you’ve gotten a clearer picture of your data, compared different attribution models and perhaps even decided on one to implement, understand that there may be some rumblings, grumblings and ruffled feathers. This is because, with attribution, not every channel can get an A. Some will get B’s, others will get C’s, D’s and maybe even F’s. And in some cases, you’ll start spending less with certain partners.

Often, the biggest barrier to implementing attribution is not technology or budget or perceived value; it’s politics. No one wants to give up their part of the model.

Many vendors and channels will win, but an equal amount will also lose.

CONCLUSIONSAttribution is about understanding your marketing story: who the characters are (your customers) and the journeys that they take (channels that they use to find and engage with you).

In the beginning, your story may not make any sense; may be incomplete; and may even be down-right scary. As you take the time to discover your data and apply it to different attribution models, a new story will start to unfold.

Where you decide to take it, is up to you.

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Acceleration Partners is an award-winning digital marketing firm focused on online customer acquisition for growing consumer and e-commerce companies. A leader in affiliate marketing, organic search, and paid marketing, we work with clients to design strategies and implement programs that deliver sustainable growth through transparent, high-value tactics. Our focus on digital marketing strategies that are brand-aligned has led to a client roster that includes adidas, eBay, ModCloth, Reebok, The Honest Company, Target, Gymboree, Tiny Prints, Warby Parker and many other top consumer brands.

marketing@accelerationpartners.com www.accelerationpartners.com

WHAT’S NEXT

Now that you know a bit more about attribution and some of the different models, start looking at your data in Google Analytics and comparing the different models based on the marketing channels that you use.

Questions about your digital marketing attribution? Contact us!