"I know half of the money I spend on advertising is wasted, I just don't know which half." - John Wanamaker.
John had a marketing attribution problem.
His quote sums up how many marketing departments for the last century have operated. As long as something was working, the campaign was a success. But we're marketing in a very different landscape than our predecessors and executives are increasingly asking marketers to prove the ROI of campaigns and leverage data to drive down acquisition costs.
What Is Marketing Attribution?
Marketing attribution is the ability to look at new consumers and trace their journey back to a “first touch,” which is typically going to be some kind of advertising material. For marketers, this is about assigning credit to particular channels or messaging for the sale. In theory, this allows you to better allocate your marketing dollars, by highlighting the channels or campaigns that bring in the most customers.
Marketing attribution was notoriously imprecise. Despite spending lots of time and money trying to identify the best-performing channels and messages, the end result rarely provided the level of certainty that executives were looking for.
Marketing Attribution Models
In order to better understand why marketing attribution can be such a wild and wooly topic, it’s worth reviewing some of the common attribution models (courtesy of AgencyAnalytics.com).
The most basic marketing attribution models are:
- Last Touch Attribution - All credit goes to the last channel or ad that the consumer interacts with before making a purchase.
- First Touch Attribution - All credit goes to the first channel or ad that consumers engaged with, bringing them into the marketing funnel.
- Linear Attribution - Credit is shared equally among all channels the consumer interacted with prior to making a purchase.
- Time Decay Attribution - All channels/interactions receive some credit. More recent interactions receive more credit, older interactions receive less credit.
- Custom/Weighted Attribution - Interactions are given unique values. One common way of doing this is by assigning a higher value to channels/campaigns that occur more frequently in purchase paths.
Digital Marketing Attribution
Digital ecosystems tend to be the easiest to analyze and track. If you’re looking at a typical e-commerce platform, you probably have paid search that’s delivering a lot of traffic to your site and you can see the path to purchase very clearly using a tool such as Google Analytics. However, what you miss is the steps taken prior to the act of typing a search into Google. Was it a radio commercial that compelled that person to search? Ultimately, digital channels favor last-touch attribution because they coincide with the highest degree of visibility, such as paid and organic search.
Tracking Word-of-Mouth Attribution
Social media plays an increasing role in driving new account holders through the door. Whereas in years past, people were recommending businesses or services to each other in offline settings, now social media is the perfect place to share the businesses you love and provide a direct link to their websites. Thanks to the internet, consumers are awash in information and options, but they’re looking to hear from people they trust before making a purchase.
Cost-per-Acquisition in Multi-Channel Funnels
The ability to forecast how much money is required to bring in X number of consumers is something every marketer is aiming for. At Kasasa, the question is difficult and it would be tempting to oversimplify the answer. We’re implementing technology that allows us to examine consumer journeys in aggregate without losing sight of the four, five, or even six touches that may happen before someone opens an account. Through this, we’re able to identify which channels are performing the best and eliminate channels that aren’t adding value to the journey.
The Future Of Marketing Attribution
The next evolution for us is being able to fuse together the high-visibility online consumer activity with the low-visibility offline activity. Both are crucial to driving the outcomes that community financial institutions are looking for. Technology is playing a huge role in our pursuit of an attribution model that delivers profitable growth regardless of an institution’s size, or how advanced their marketing organization is.