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Cross-channel attribution: How can marketers look past the last touch?

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28th Jul 2011
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Forrester's Fatemeh Khatibloo explains why one of marketing's key metrics has become outmoded and how to implement its successor.

Metrics and measurement have become an intrinsic part of the marketing world. So it is alarming to realise that one of marketing’s key metrics has not only become outmoded, but also deeply misleading.
However, that is exactly the reality facing marketers today, because the oft-discussed fragmentation of the media landscape has not only made customer engagement more complex – it has also undermined the use of traditional one-to-one, last-touch methods of linking purchase activity to marketing efforts.
And this has potentially huge implications for budget allocation to the marketing mix – and, ultimately, marketing effectiveness.
“We hadn’t really needed to do anything more than last touch attribution in the past because the media wasn’t as fragmented as it is today,” explains Fatemeh Khatibloo, customer intelligence analyst at Forrester Research. “In the past we used to think of things like mass media as ‘branding efforts’. Then there would be direct mail pieces or branded radio or TV spots, and when someone called a toll free number, we knew that was the activity driving them. Anything leading up to that was attributed to branding.”
But in the modern world, consumer purchasing decisions are rarely informed by one push medium.  
Khatibloo continues: “We are now sending people maybe four emails a month. They are perhaps getting a direct mail piece too. They are also hearing drive-time radio. They are seeing display ads all over the web. And none of those are really brand activity any more, they are all meant to stimulate an activity or transaction. As a result of this, our budgets demand that we can identify what mix of media the consumer saw before they made a purchase transaction.”
Driving the final sale
However, in many cases budgets are focused on the attributable last click as opposed to understanding that emails, catalogues or direct mail pieces were sent, that they had a cost associated with them – and that they drove some part of the purchasing behaviour. So, for example, with personalised URLs printed on direct mail pieces, emails driving traffic, and broadcast media spots promoting mobile marketing, businesses can easily allocate budgets to inefficient acquisition channels and cut budgets from effective channels.
Put simply, present methods of measurement can be inaccurate, can often understate the cost to generate revenue and acquire a customer, and can leave marketers unable to establish the true ROI of their marketing spend. The consequences of this are, unsurprisingly, damaging.
“There is a real issue with over allocating budget to channels that aren’t actually driving the final sale, they are only driving the final close of the transaction,” explains Khatibloo. “In a display ad environment, which is highly fragmented, you may see three or four ads before you finally click on one of them, and those three ads that you saw prior actually cost the company something. So if you are not able to identify the mix of activities that a consumer is responding to, you are attributing the transactions to the final click and you are giving that final click or final channel the majority of the marketing budget. And that is really what we’re seeing in companies that are starting to talk about attribution and trying to figure it out - they realise that they have well over allocated to some of the digital channels and they have pulled back on channels that are in fact driving sales but they are not seeing it because they are not attributing it that way.”
Cross-channel challenges
It is therefore not surprising that some marketers are exploring the possibilities of a cross-channel attribution model, something that could more accurately calculate acquisition costs, improve allocation of marketing budgets and provide a holistic view of the marketing ecosystem. Khatibloo adds: “The optimisation of marketing budgets would be a big benefit. The other big one is the better understanding of consumer behaviours. You would have a much clearer understanding of what is driving consumers to your site and drivers to complete a transaction and as a result you can modify some of the customer experiences, you can modify how you target certain segments of your customer base and so on.”
But implementing such a model is far from simple. Marketers can implement a single tracking system such as IDs or campaign codes, or universal tag systems to consistently track online channels. And there are solutions available that are well rated – ClearSaleing, for instance, and Visual IQ. But some major barriers exist on the path to multi-touch attribution models, including culture, as brand and channel managers become protective of their dominions and the associated tracking data.
“Most companies that are in this situation and who are looking to tackle attribution have at least created the cross-functional teams that establish who is digital, who is email, who is the print marketer and who is the mass marketing media buyer,” says Khatibloo. “But there also has to be consensus within all of those groups to actually start building an attribution solution. It is very difficult to get the data from all those disparate sources if they are not on board with the idea of building out an attribution model. And this can be a difficult thing to do because the reality is that somebody is going to have budget allocated away from their channel. So it is a bit of a political issue that needs to be tackled.”
A further obstacle is accessing the relevant data. “We still see problems with the single view of the customer and where customer data bases are not fully integrated across channels and lines of business. So it is very difficult to see what a customer’s actual transaction history has been, what their actual promotion history has been. It can also be difficult to bring things in if, for example, you are running a loyalty platform and the loyalty data is sitting in a third party vendor’s site. All of the segmentation and loyalty messaging may not be sitting within an organisation’s own customer database, for instance. So it is a case of integrating all of that data together.”
Gaining traction
In light of these challenges, very few organisations have been able to execute cross-channel attribution. “An extremely small number,” says Khatibloo. “Successfully? I could count them on one hand.”
Nonetheless, if organisations can tackle the aforementioned issues, then businesses can start to make progress – though it is recommended that they should start on a small scale, looking at attribution with a smaller group of customers, rather than trying to boil the ocean.
“A loyalty platform is a great place to start,” suggests Khatibloo. “If you have a loyalty programme and it is sitting in a marketing database within the vendor, you might consider trying to do attribution against that instead of customers. Or you may try to pilot this with an online solution - you may say we need to figure out our digital attribution first and then we can bring that into the offline channels [personalised URLs, coupon codes, toll-free numbers, etc. can all help to support proper credit for offline channels]. Those are the two ways we have seen people succeed in getting some use of attribution solutions.”
Despite the challenges ahead, cross-channel attribution models will undoubtedly gain traction as firms look to address inefficient marketing budget allocation and channel conflicts. If it is true that ‘you can’t manage what you don’t measure’, then the degrading of last touch attribution as a metric should provide plenty of impetus for the marketing community.
“Once we start to see some really solid case studies coming out, and once the vendor and solutions community have a solid story to tell and can point to the benefits, then there will be more action,” concludes Khatibloo. “Certainly the conversation is being had.”

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By Visuual IQ
28th Jul 2011 11:49

Great article!  Fatemeh makes some excellent points about the key challenges faced by brands and their agencies who seek to implement an attribution solution.  A couple ways that we've seen be successful at overcoming these challenges are:

1.    Changing corporate culture. Breaking down internal silos and cross-departmental/cross-channel barriers by changing markers' incentive/rewards model to focus on their marketing organization's overall success, rather than the success of an individual channel.  Those managing search/display/email/direct mail/broadcast/etc. will all pull from the same end of the rope and collaborate more closely if they are incented by common/shared success metrics. Attribution provides businesses with the ability to establish such metrics and track them across the enterprise.

2.    Collecting disparate data (sources). Many of the most common sources of marketing performance data (search engines, ad servers, web analytics platforms, etc.) provide API and/or FTP access to trusted third party vendors for the expressed purpose of pulling that data into consolidated data warehouses and other systems, including selected attribution solutions.  So be sure to ask any potential attribution vendors if they have these types of trusted relationships with the sources of your data, or can provide evidence of their ability to work with non-standard, ad hoc data that may come from sources within your organization.

We agree that these are two of the key challenges faced by the attribution industry today, but for organizations spending millions of dollars on media buys, the media efficiencies and improved bottom line performance that can be gained through its implementation is typically well worth the effort required to overcome these barriers.

 

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By LinusGregoriadis
28th Jul 2011 14:41

Nice post Faterneh, and definitely a growing area of interest.

I've written this blog post about things to consider when choosing an attribution provider.

http://econsultancy.com/uk/blog/7615-choosing-marketing-attribution-technology-five-things-to-consider

 

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