In the early 1900s, Philadelphia merchant John Wanamaker famously quipped, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
In a way, he’s the grandfather of marketing attribution — the science of giving credit to each marketing touchpoint that a customer was exposed to before a purchase. More than ever, marketers are pushing to understand what worked and what didn’t so they can invest in tactics that truly drive sales.
With the rise of data-driven marketing, marketers don’t work nearly as much in the dark as in Wanamaker’s day. But it’s still murky and often political, particularly when factoring in cross-channel behavior and trying to capture offline and online. How much credit to assign to a TV ad versus an email offer versus a paid search campaign versus an in-store promotion? Early marketing analytics brought a “last click bias”, where the final measurable touchpoint received disproportionate credit. That approach undervalues the impact of awareness channels that are more difficult to measure.
Complicating the process is the fact that marketing tactics often map to organizational silos. So, every different marketing team claims outsized influence on final revenue, which impacts how marketing budgets get assigned. If you added up all of the revenue that each team claimed credit for in their ROI predictions, you’d end up with revenues many times larger than the brand’s actual size.
So the CMO has to apply judgement and pick an attribution model. Some of this process is still guesswork, even as the technology and analytics advance by leaps and bounds. But I think what matters is the conversation around the assumptions that go into that guesswork. It’s a far more educated guess than ever before.
I’d love to hear your thoughts on marketing attribution.
Tom McCool says
December 21, 2015 at 6:59 amThis toon illustrates the problem of low involvement purchasing decisions. To a consumer, purchasing a bag of chips isn’t a “big commitment” kind of purchase. The purchasing decision can change at the very last minute – the shelf isn’t stocked, another brand is on sale, or the consumer just grabs something. Any attempts to give credit to any single marketing strategy is rather pointless. Awareness created by multiple touchpoints, not a single touchpoint, and the best you can hope for.
Daryl Weber says
December 21, 2015 at 7:11 amUnless it’s a direct response method, no awareness/branding building marketing method can claim sole ownership of a sale. The consumer has to have a positive gut feeling towards a product in order to choose it, and that can come from anything, and typically comes from a combination of many factors (design, past experience, where they’ve seen it, who they’ve seen it with, price, etc.). All of these add up to the brand feel, and none of them work in a silo.
(I explore this topic in my book: http://www.daryl-weber.com/book )
Elena says
December 21, 2015 at 8:38 amAs an industry we’re looking to find better attribution models, but they all focus on the channel/tactic/moment when a consumer makes the purchase, converts to a lead, etc. A true attribution model needs to show the impact of all marketing touchpoints and based on the role they play in the consumer journey, not just a sale.
Lei says
December 21, 2015 at 9:20 amWhat about the influence of earned media (PR)?
Jan Exner says
December 21, 2015 at 11:28 amI’m suspicious of models, any model.
It might be “close to reality” today, but how about tomorrow?
Pick a river on the map, try to approximate it with a ruler – that’s what attribution models do these days.
I think it is imperative to investigate attribution, but I also think making budget decision on a model can be dangerous.
Rodolphe R. says
February 9, 2016 at 9:10 amEconometric can help you to get relevant learnings in term of attribution. But I believe the right question is not about attribution but about what is the right trade off between all media channels to achieve the best performance.
We should look at our marketing performance as a whole …
Martin Chillcott says
April 22, 2016 at 6:55 amIn his 1885 publication, Successful Advertising, Thomas Smith described how frequency works, based on 20 exposures to an advertising message:
1. They don’t even see it.
2. They don’t notice it.
3. They are aware that it is there.
4. They have a fleeting sense that they’ve seen it somewhere before.
5. They actually read the ad.
6. They thumb their nose at it.
7. They start to get a little irritated with it.
8. They start to think, “Here’s that confounded ad again.”
9. They start to wonder if they’re missing out on something.
10. They ask their friends and neighbors if they’ve tried it.
11. They wonder how the company is paying for all these ads.
12. They start to think that it must be a good product.
13. They start to feel the product has value.
14. They start to remember wanting a product exactly like this for a long time.
15. They start to yearn for it because they can’t afford to buy it.
16. They accept the fact that they will buy it sometime in the future.
17. They make a note to buy the product.
18. They curse their poverty for not allowing them to buy this terrific product.
19. They count their money very carefully.
20. They buy what is offered.
So exposure and attribution are not a new phenomena!
It also quite neatly shows the logic behind ‘re-targeting’ ‘
I only found this quote a couple of years back from this excellent website and blog. Thanks John
http://www.johntabita.com/