In the early stages of your company, you might need to bootstrap your marketing plan to build your brand. But as your company grows, you should invest more dollars to advance your sales and marketing efforts so you can better understand your customer base.
In order to target your customers, you need to analyze their behavior both online and offline. Before a customer makes a purchase, he or she can have several touchpoints with a brand through print, TV, or banner ads, but how do you evaluate the performance of each media channel?
No matter if you're heading up a start-up, a middle-market, or Fortune 1000 company, marketers at all of these companies need to determine how to better allocate their marketing budgets. I talked to Paul Pellman, CEO of Adometry, and asked him a few questions about marketing attribution--how to assign credit to the right marketing channels--and how marketers can take advantage of it.
What is marketing attribution?
At its core, attribution helps advertisers determine which ads a customer saw in the process of finding and buying a product. Advanced attribution platforms can also tell you which ads were most impactful.
Considering the average consumer encounters more than 3,000 unique ads over the course of a typical day, the notion of tracking and accurately assigning credit to the ads that successfully broke through the noise and drove a purchase behavior becomes a more difficult proposition.
When marketers need to decide which ads get credit, what are some common pitfalls?
For years, the pervasive approach has been last-click or last-event attribution. Using this model, marketers give full credit to the last ad seen prior to the conversion. However, it doesn't reflect how most of us consume and interact with advertising.
For example, imagine a large automotive company is advertising a hot, new car coming to market. The company decides to invest in multiple channels such as paid search, display and direct mail targeting consumers seeking out information about new cars. Using "last-click" data, the company sees that its paid search investments are driving the bulk of its web traffic, so it decides to divert funding away from its display advertising to its search campaign to reach even more customers the following month.
Unfortunately, after getting new data the company finds that the paid search placements are no longer converting at near the rate they were previously; the display ads that it stopped were actually responsible for influencing customers.
While last-click attribution provides some useful campaign information, such as where the consumer saw a display ad or the search terms used that led to the purchase, it doesn't tell the whole story. Perhaps more importantly, last-click attribution fails to show the relationship between ads and the impact that it has on consumers.
What are some tactics that start-ups or middle-market companies can implement if they want to employ marketing attribution?
A great place to get started is to engage with key stakeholders within the organization to determine whether it is the right time to invest in an attribution solution. Keep in mind that the marketing toolbox has gotten considerably larger over the past decade as the number of available channels has proliferated.
Increasingly, search marketing isn't enough and needs to be combined with other channels to really pay off, which is part of the reason attribution is growing so rapidly. Companies that are using a combination of search, display, email, or social marketing campaigns--or planning to in the future--should use attribution to learn from all available data versus relying on inferior metrics like last-click that fail to offer meaningful insights.
Those that decide they are ready and have a solid understanding of how attribution works should consider a platform that offers an "algorithmic" approach; in other words, one that lets the data determine how much credit each marketing touch point (media) in each channel deserves for each conversion.
With so much competition for attention, these decisions can often mean the difference between successfully reaching your customers and getting lost in the crowd.