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Depending on what role you play in the digital marketing ecosystem, hearing the word ‘attribution’ either sends you over the moon or sends shivers down your spine. Regardless, it definitely demands your attention.
Attribution has the same effect on each marketing channel as it does each marketer responsible for execution. Every year, the allocation of over $100 billion of digital ad spend is at the mercy of the attribution practices of America’s advertisers.
This blog will share unique perspectives on attribution from DMi’s channel leaders for SEM, affiliate, email, e-commerce, and database acquisition. Our goal is to illustrate some of the most effective attribution strategies we are seeing, especially where clients’ approach to attribution cuts against the grain of the typical models employed. No matter what your experience with attribution is today, you will learn that the struggle is real and you are in good company.
Never has an attribution model been developed where email marketing received 100% value for an action. In the most direct case, email marketing is step 2. Every action taken via email marketing started somewhere else. In this post, you will read about how attribution models are developed, optimized and analyzed for different marketing channels. As you read these pieces, remember that email lies downstream looking to raise its hand and gobble up its share of the action.
It is probably important at this point to pull back and remind us that attribution is the art of division.
Our goal as marketers is to maximize the volume of customer actions and engagement and the efficiency of the dollars spent to generate those actions. In that moment, the volume is finite. An attribution model is used to divide that finite volume among the responsible paths that led to those actions
When I think about this, I am reminded of a skit I once saw a magician do where they cut a lemon in half and squeezed the lemon over and over, and ended up filling an entire pitcher of lemon juice from one lemon. While this is a great trick, it is not reality When you cut a lemon in half to squeeze out the juice there is a finite amount of juice in that lemon. There are lots of tools and techniques you can use to extract as much of the juice from that lemon, but nothing will create more juice
Email marketing is the tool used to extract the maximum juice from your marketing investment. There is no denying the power of email marketing in driving customer engagement and action. There is no denying the power of email marketing in extracting every ounce of value from your database, but email marketing is limited to the database – a database derived from other marketing channels.
Marketers who are tasked with database acquisition have one of the most essential responsibilities on the brand marketing team. By fueling the growth of their brand’s first party consumer database, this team creates the engines that drives countless other direct marketing and retargeting channels, including: email, Facebook, direct mail, SMS and many others. But even with such a vital job, database acquisition campaigns struggle to develop proportionate attribution models that illustrate the true value of their acquisition sources and allow them to finetune their sourcing.
We often see our clients’ database acquisition teams in a (friendly) competition for sales and conversion credit with the very direct targeting and remarketing channels that they support. Take email for example: as we discussed earlier, sometimes being closer to the end of the conversion funnel can help you get credit for the final result. Since database acquisition campaigns are often the entry point for a consumer’s digital interaction with a brand, they can often be forgotten about months or years later when a conversion finally takes place as the direct result of another channel.
There are two key perspectives from which Database Acquisition teams need to consider attribution.
- Internally, within their own campaigns, correct attribution is a necessity to know which of their acquisition sources are working and which are not so they can optimize their paid efforts.
- Externally, relative to the other marketing channels within their company, fair attribution is critical in order to illustrate to the C-level team that your campaigns deserve to continue receiving bigger and better budgets.
- This second perspective tends to be very difficult for brands. Too often, we see successful database acquisition campaigns suffer because they are not able to claim a big enough piece of the conversion pie.
The multiple angles from which attribution commands attention is just another reason why it is a timeless and endless struggle.
Thus far, we’ve covered how you can consider giving credit to your email channel and how database marketers should gain attribution credit. Now, we’ll turn to e-Commerce attribution (or “how to make sense of your dollars and cents”).
e-Commerce businesses live and die by their attribution model. If you nail it, you can effectively allocate your budget and scale your marketing channels proportionally and effectively. If you misattribute successes to the wrong channels, you will be placing bets based on bad intel, and your e-Commerce sales will reflect that.
Think back to the last few e-Commerce purchases you made. Specifically, think about the brands you recently tried for the first time.
How many touch points did you have with that brand? Chances are it was not just one interaction.
- You may have seen a friend post about them on social media (with a surreptitious referral link that you clicked).
- Then you were retargeted by the brand as you browsed on and off social media.
- You signed up for their email list to receive 10% off your first order.
- After a few emails, you arrived at their site to purchase, but not before a quick Google for any coupons better than your current 10% off.
While your experience was pretty straightforward in terms of modern e-Commerce, you created a pretty nasty path for an attribution team to make sense of.
Let’s say you purchased $50 worth of merchandise. Your $50 sale will likely pop up on at least 5 channels’ reporting; the affiliate team, the email team, the retargeting team, the social team, and the organic search team will want to take credit for this new customer, not only your $50, but your extensive future lifetime value. However, if all 5 teams are taking equal credit, future budgeting decisions are going to be murky at best, and way off base at worst
If you’ve made it this far and are waiting for the perfect e-Commerce attribution model – sorry, you’re in the wrong place. There are dozens of ways to attribute online sales – first click, last click, equal weighing of all touchpoints, giving more credit to first and last click, and so on. In truth, there is no perfect attribution model, just like there is no perfect tracking technology.
Some sales will be straightforward, with one interaction that leads to a nice tidy sale. Others, like the example above, will be linear paths in which multiple channels come into play. And yet others will be a mess, where there are huge lags of time, multiple unique identifiers matching a customer, and every type of marketing popping up in a users’ journey. This is all to say – do your research, try out a few attribution models, and keep tweaking your methodology over time. Just as your customers and marketing strategies are changing, your attribution model should be evolving over time.
In no area is attribution more important to determine the success, opportunity, and true ROI of marketing efforts than in affiliate marketing. Through affiliate marketing, the affiliate partner promoting the product is not compensated until their efforts generate a sale. This incentive greatly reduces the risk; however, if the attribution model and publisher structure of the campaigns are not set up correctly, there is significant opportunity to waste dollars and miss out on the true story of marketing performance.
We all know that it is unlikely that the path leading to a consumer’s purchase is direct. As an individual user interacts and engages with various marketing efforts and campaigns, each effort contributes a piece to the attribution puzzle contributing towards the eventual conversion. That is not the way affiliate marketing has worked historically.
“The affiliate standard for attribution is to measure and reward based off of last click,” said Rob Juarez of Impact Radius’ Omnichannel Market Intelligence group, “In order to grow their program, marketers need to look beyond last click. Marketers need to implement a system that measures incrementality and value across their entire conversion path.”
The first step to incorporate attribution into your affiliate marketing is to ensure that you have the data you need to build the attribution model. Whether you are using a rules-based model such as time decay or position-based, or a dynamic attribution model, getting access to and control of the data is the first and most important step. While many marketers are moving towards a dynamic attribution model that leverage machine learning, it is most important that your solution can be customized for the individual marketer.
For example a percussive therapy brand that we work with takes advantage of Impacts Insights feature to determine where publishers are contributing to the brands purchasing cycle and rewards publishers that they see having a high impact on the conversion funnel and allows them to remove publishers who are not properly contributing or cannibalizing other channels.
At the end of the day, an affiliate program that is set up with the correct attribution model rewards the publishers that have the biggest impact on driving sales, and dramatically reduces the opportunity and impact of publishers who can take advantage of traditional last click only attribution. This is good for the marketers and good for the publishers, helping to positively impact the reputation of affiliate marketing as a channel