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The Power of Attribution Marketing
Give credit where credit is due.
Posted Feb 3, 2012
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Any marketer who works to attract and retain customers online can profess that consumer behavior is constantly shifting. With the explosive growth of social media outlets, video advertising, and mobile marketing, brands are struggling to determine how to profitably add these new marketing channels to their strategy, without sacrificing their core online assets in search marketing, display advertising, email marketing, and more.

Enter Attribution Management.

If you are not familiar with this concept, you need to be. It is quickly becoming the accepted standard for analyzing your customers' purchase paths, utilizing your data, and optimizing individual online channels for the most cost savings and best customer experience.

Interesting? Let's make it a bit more interesting with some real results. We work with a top 10 high-end department store that drives more than $4 billion in annual revenue. They recently shifted from a traditional "last click wins" digital marketing mentality to the truly open and productive attribution view. In just three months, they saw their average revenue per order increase by 66 percent and their total number of orders increase by 16 percent. These are the types of results that can make or break not just a quarter, but your company's profits for years to come.

As this department store, and countless Fortune 500 companies like it, shift to an attribution model of data analysis and campaign planning, they see many commonalities that can help every digital marketer.

First and foremost, clarity provides direction and direction provides profit:

  • The traditional way of looking at digital advertising performance is "last click wins," meaning that the ad a customer interacts with before a conversion or sale receives full credit for the sale.
  • When you view this same customer's purchase path through an attribution lens, it becomes quite clear that there are multiple touch points (email, paid search, display ads, etc.) throughout the journey that should receive credit. Also, the amount of credit should be determined through an attribution model that takes into account your unique business and customer base to drive the most success.
  • Gaining this type of clarity and direction for your campaigns should not be a stressful process. Many marketers find the best experience and ability to use what they have learned when they walk before they run. In other words, shifting over from a "last click" method to an even attribution model (that gives credit to all touch points evenly) will allow you to begin understanding how your ad units work together and which are winners and losers within your overall mix. Then, as more data is accrued and analyzed, custom attribution models can be developed with a remarkable amount of unique business understanding and granularity to take your strategy to the next level.

We also consistently see that once digital marketers shine the attribution light on their campaigns and data, the elements that create and influence demand further up the funnel are seen as more valuable. By investing in these "top of the funnel" activities, instead of just harvesting the incoming demand, an advertiser's entire opportunity set grows larger.

As marketers look at the larger opportunity—based on creating demand, nurturing the customer purchase path, and increasing lifetime value—they start to shift the questions they ask themselves and their team. Instead of asking what the click-through rate is, or which channel had the best ROI this month, they step back and use attribution to answer questions such as:

  • How do I attract new customers to my brand?
  • Which channels used alone or in combination introduce customers to my brand? Which influence them? And which channels close the deal?
  • How can minor shifts in my messaging or placement drastically alter the lifetime value of my customers?
  • How do I shift my spending to channels that have higher customer intent—when customers are in the mindset to buy? As an example, in our recently released "Driving 2012 Success Study," we found that paid search showed a relatively high intent factor, with an average of $4.38 revenue per click. That is more than double the revenue per click present through comparison shopping engines (at $2.02 per click), a channel more prevalent when brand and product are under more intense consideration.

Attribution also opens up a wealth of information that all CRM professionals are seeking—better analytics surrounding customer relationships. Here are just a few ways that attribution brings about an evolution throughout CRM organizations:

  • Channel impact to lifetime value: By merging data from all marketing touch points to data pertaining to customer purchases (products, repeat purchases, accessory upsells, etc.), CRM analysts can now decipher which channels have a fundamental impact on customer lifetime value, irrespective of where the marketing channel falls in the customer journey. In our "Driving 2012 Success Study," it was determined, for example, that the presence of social media in a purchase path drove higher-value orders, in terms of revenue per order, than natural and paid search combined.
  • CRM experts can now strategically apply the revenue from repeat purchase activity toward new marketing investments. As an example, most retailers only recognize the revenue from the one measured order to determine marketing channel ROI. However, if through attribution, you realize that the average customer makes 2.5 purchases within 30 days and you can tie that revenue back to all marketing channels involved in the acquisition of the customer, you can assume a higher ROI than the competition. This allows bid-centric channels like paid search and new forms of exchange-driven online display to be more advantageous than they once were. If you are able to see that value while your competitors do not, you will be able to capitalize on this solitary knowledge in your bidding strategy.
  • Marriage of newly formed data sets: Because you are now able to merge all marketing touch points to all sales activity, along with bridging third party datasets, you are now able to gain visibility on data such as psychographic segmentation, intent, and online profiling and their correlation to marketing channels, product purchases, and even ROI.

Last, but just as vital, is a question I am often asked—most often by nervous supply-side vendors—"Will attribution kill search, email, display, etc.?" The answer is no. A digital strategy that drives long-term success will continue to include the elements that have proven successful in the past. In fact, it will most likely include even more channels (back to that discussion of mobile, video, and social). What we absolutely see is that even though marketers do not shift away from one channel of advertising, as soon as they begin viewing their plethora of data through attribution, their spend per channel, messaging, and overall strategy changes dramatically.

Said another way: Google gets too much credit. Google also gets too little credit.

You see, no one media source is going to make or break a truly comprehensive digital strategy, a strategy that is built around true customer understanding, that seeks to understand the credit owed to each touch point along the customer journey, and the strategy that is day-by-day and minute-by-minute analyzed and optimized through attribution management.

With clarity, direction, and profit abounding, attribution is going to turn marketing around.


Randy Smith is the president of ClearSaleing, an advertising analytics and attribution platform. He can be reached at randy.smith@clearsaleing.com.


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