by Rohit Bhargava
Category: Digital Influence, Measurement
Yesterday I attending an interesting panel session on Metrics and Measurement at the annual Ad-Tech conference in San Francisco. Speakers included people from Atlas, Doubleclick, and CoreMetrics and the topic everyone was talking about was where measurement and metrics are today and where they need to go. The group raised several interesting points, but a key thread that ran through their discussions was that marketers are getting smarter about figuring out attribution. In typical web reporting, if you are tracking a conversion or sale and trying to figure out which element of your marketing caused the sale, you simply trace it back to the last click. For example, if I click on a keyword marketing Google text ad, and then go to your site and buy something, the easiest thing to do is to attribute that sale to the click on keyword marketing. In that model, you would then create a percentage of effectiveness for your keyword marketing and if it is far higher than other activities such as banner advertising or online sponsorships, you might conclude that you should reduce spending on the other elements and increase it on banner advertising. This is a typical situation.
But imagine instead the more likely case that your customer first heard about your product through searching on Google and clicking on a link in the organic search results that took them to a blog where they read about the product. Then they visited Amazon.com directly to read a review. Then they went to a site in the category, saw a banner ad and remembered in the creative of the ad that you were running a special discount. They think about it, and the next day they have already decided to purchase. They go online, type the product into Google, see the keyword ad, click and then purchase. The keyword ad still was the last click before purchase, but in this case you would certainly not attribute the entire sale to the power of keyword marketing, would you? This is the challenge of attribution and what the panel focused on.
In the interconnected world of the Internet, measuring one element but not another can never give you a complete picture of what your customers are really doing and which element of your marketing and communications plan is having the most impact. As the industry seeks a new solution to account for these elements, one of the areas we are continuing to focus on is how we can help our clients get smarter about how social media plays a role in this cycle. Most of our clients are already measuring their online marketing and advertising spend - but the challenge is relating their efforts in social media to these elements. At the heart of this challenge is the need to understand the key points of influence for an individual and map this to a customer rather than to a marketing channel or tactic. Once we do this, we can really start to measure what impact marketing in all its forms is having and more importantly, how to optimize it.
Interview with Twitter Fail Whale Designer
April 26th, 2007 at 9:29 am
Spot-on commentary, Rohit. My particular bug concerns the so-called “creative” agencies that serve themselves and their award cabinets, NOT their clients. Measurable marketing is simply essential in today’s world … kudos for your thoughts.
April 26th, 2007 at 10:00 am
[...] 360 Digital Influence: Thoughts on Measurement from Ad-Tech: The Challenge of Attribution “In the interconnected world of the Internet, measuring one element but not another can never give you a complete picture of what your customers are really doing and which element of your marketing and communications plan is having the most impact.” [...]
April 28th, 2007 at 7:14 am
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May 2nd, 2007 at 12:31 pm
What about running pilot programs that try to isolate some of the comms/marketing programs to understand their impact? Still doesn’t get at the complex interactions that you are talking about. I think we would need some academic study to really “map” those influences and their interaction and cumulative effect.
May 27th, 2007 at 12:12 am
The truth of the matter is that we will never be able to build models that will be able to determine all of the discrete variables/values along with the impact of the interactions between these variables. For instance, often there are viral and other offline forms of marketing that simply cannot be integrated into marketing models. But this is okay. Just like we’ll never know the exact perfect price for a product at any given point to insure that neither the customer or a business are leaving opportunity cost on the table.
What we do need to get much smarter on however is building predictive models that attempt to account for as many of these interactions as possible and drive the level of uncertainty to a point where a marketer can live with it.
Many pieces of the puzzle are coming together. As web analytics, multivariate testing, behaviorial and remarketing ad networks, and competitive tracking improve - the ability to drive to a new level of certainty exists. The difficulty that exists is that no one owns all of the pieces to the puzzle nor have the developed the relationships with other technology firms to create the first steps towards this level of metrics and measurement. In fact, there appears to be a reluctance to do so.
Furthermore - measurement is just the first step. Its just data. To make this entire concept of attribution important - we need to turn it into action. This will require someone using algorithisms not unlike what the multivariate testing firms use applied to content and apply it to the larger problem of attribution by expanding their scope to not only include analysis of message but of placememt, timing, and customer. Adding this level of ‘darwining’ predictive actioning to attribution, in real time can lead to solutions without having had to know all the answers before you start.
July 30th, 2007 at 6:52 am
Rohit,
Good piece on the issue of “last click attribution”. From a practical perspective, the “rules of attribution†are taking precedence over the “rules of advertising†providing a skewed perspective on the optimal balance between PPC advertising and display based advertising.
Under the “last click†rule of attribution, click driven channels such as PPC search, are attributed and credited for a disproportionate amount of transactions. While PPC advertising is an effective online advertising channel, it benefits from being widely used at the start and end point of the consumer purchase cycle. By attributing 100% of a transaction to the last click, there is a danger in underestimating the contribution and value of impression based channels.
It is not a question of display based programs being more effective than PPC Advertising or vis-versa, it is a about how both channels work together and their overall role within the purchase cycle.
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March 24th, 2008 at 9:58 am
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