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.