SearchForce: Understanding Multi-Channel Attribution

SearchForce: Understanding Multi-Channel Attribution

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  A Digital MarketingDepot Research Report Understanding Multi-Channel Attribution Best Practices for Attribution Strategy & Modeling
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  Understanding Multi-Channel Attribution 2 Introduction M anydigital marketers manage their PPC campaigns as though clicks and conversions take place within a silo, disconnected and unrelated to the customer engagement that occurs across multiple channels. PPC campaigns are actually tightly interwoven with broader marketing programs that reach prospects and customers over the entire customer lifecycle, whether on a website, through social media accessed on a mobile device, in store or on the phone. Viewing PPC campaigns within the broader context of lifetime customer relationships, and attributing this information to bid rates and ROI calculations across channels, is crucial to your company’s bottom line. More accurate attribution allows you to make more effective media buys, which ultimately lead to greater profits. It can help you more effectively measure your performance against broad objectives, not just against individual campaigns and keywords. Yet, creating an accurate attribution model is one of the most difficult parts of any search marketer’s job, particularly in light of the proliferation of new media channels and audience fragmentation. There are many questions that are difficult to answer, including: What role did prior website referrals, searches and ads play in a conversion? Which metrics should be attributed and how? How much time passed between the consumer’s initial click and subsequent purchase? What tools are currently available to help us identify and weight these factors? The answers come from a combination of PPC software tools that can implement advanced modeling techniques and the people or partners that know how to make them work. This EBook discusses why multi-channel attribution has become increasingly important to search marketers and explores the advantages of using multi-channel attribution to improve the efficiency of PPC marketing programs, as well as how to build an accurate multi-channel attribution model. Digital Marketing Depot and SearchForce would like to thank the following SearchEngineLand columnists and industry experts for their valuable contributions to this EBook: David Roth, senior director, search marketing, Yahoo!; Greg Sterling; George Michie, CEO, Rimm-Kaufman Group; and Dax Hamman, Chief Revenue Officer, Chango. Understanding Multi-Channel Attribution Best Practices for Attribution Strategy & Modeling
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  Understanding Multi-Channel Attribution 3 TheValue of Multi-Channel Attribution While paid search has become a key driver of online conversions, the proliferation of digital marketing channels has created complex interrelationships that can only be understood with advanced technology. Consumers often browse across different media channels before they decide to identify themselves as a prospect or become a customer. Each channel plays a different role in how it influences the path that leads to a conversion. For example, many people may purchase on your site after searching for your brand on Google or Bing. However, they may have been introduced to your brand via a blog or Facebook brand page, or while seeing a product in the store or after viewing an offline ad in print or on TV. Ad spending is increasing across digital marketing channels as marketers try to identify and entice their prospects and customers across a widening array of media choices – a task that has become increasingly difficult. According to digital research firm eMarketer, mobile ad spending will grow to nearly $1.23 billion in 2012, while social network ad spending will reach $8.0 billion. As a result, multi-touch or multi-channel attribution modeling has become a critical tool for search marketers by offering the following bottom-line benefits: Better understanding of the relationship dynamics between diverse media channels and the objectives that are best suited for each. More accurate analysis and measurement of PPC contribution to offline conversions. Less A/B testing costs, as attribution systems help defray the cost of ongoing testing. Improved management of paid search bids based on which keywords actually close and which assist the close. A holistic, multi-channel marketing approach that eliminates silos and maximizes ROI. The Move Away from Last-Click Attribution Search marketers continue to debate the merits of last-click vs. multi-touch or multi-channel attribution models. While last-click models emphasize search that occurs deep into the purchase funnel, increasingly, PPC conversions are influenced by a series of online clicks and offline searches that happen a few hours, days or weeks earlier. Without tracking and analyzing multiple touch points, you can’t get the true ROI of your marketing dollars. As a result, you might not be fully optimizing your marketing initiatives. According to Microsoft’s Atlas Institute, between 93-95% of audience engagements with digital advertising typically receive no credit at all when marketers review campaign ROI. That means that most marketers are only looking at five percent to seven percent of consumer media interactions when optimizing conversions. According to a report published by Slingshot SEO in March 2012, the value and potential priority of various digital marketing channels change when marketers use a multi-touch attribution model, and that many marketers are placing too much emphasis on the last click as well as the first click in the stream of consumer interactions. As a result, channels such as SEO, paid ads and referrals were being undervalued. On average, consumers took 2.79 interactions before converting, and the last click before the conversion was typically a direct visit to the site or a branded keyword search. A multi-touch attribution model allows you to track all user touch points and capture more complete information about their interactions with your brands. The key is to track all of your digital media in one system, allowing you to see all of the pathways users took to ultimately convert. According to digital research firm eMarketer, mobile ad spending will grow to nearly $1.23 billion in 2012, while social network ad spending will reach $8.0 billion.
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  Understanding Multi-Channel Attribution 4 Forexample, SearchForce features Pathtracker Pixel,™ a universal pixel that accurately tracks cross-channel events or interactions in the proper sequence. Consider a scenario where a consumer views a display ad on Monday, clicks a sponsorship on Tuesday, receives an email from on Wednesday, and comes back on Friday via a paid search ad and converted. Multi-touch attribution assigns credit to the entire conversion pathway, not just the last ad clicked. Multi-touch attribution models are difficult to develop and make effective primarily because there are so many variables involved. How do you decide what percentage of the conversion value to give to the first interaction vs. the last when you need to consider the following factors: Should ad impressions be weighted the same as clicks? Are clicks from search worth the same as clicks from Facebook? How does recency effect attribution? Is a click that happened 12 days ago still worth anything? Some search marketers believe that a last-click model is the most effective because the search occurs closer to the conversion. But last-click attribution models don’t follow consumers over extended time periods, or consider the variety of online influencers such as email, direct navigation, display ads or even organic search (SEO). As a result, a significant portion of the inaccuracies and oversimplifications involved in attributing digital media channels for conversions comes from only counting the last click. If more than one keyword was clicked on the path to a conversion, did those previous clicks “assist” in that conversion or lead the prospect into your sales funnel? If so, they should be given some credit. Other keywords function well as “closers,” and convince prospects to take action. Relying on the last click as a benchmark for success means you could be under-investing in other media that actually improve results. Creating an Effective Multi-Channel Attribution Model Strategy Comes First The successful use of multi-channel attribution first requires a well-planned strategy that includes management buy-in, evaluation of staff resources and a robust PPC technology platform. Data can only be as smart as the people interpreting it. Employing an attribution specialist to lead the effort is ideal, although not always doable. Your marketing organization should conduct an exhaustive analysis of your business and online marketing programs. Begin with your business goals and product adoption cycles, move on to conversion window analysis and end with a channel-by-channel audit of both online and offline marketing. It is important for statisticians to work hand-in-hand with marketers. Mathematicians without guidance from marketing experience will build the wrong types of models. Marketers recognize the role that consumer behavior plays in the correlations between different types of marketing interactions and conversion success. While some attribution models may be mathematically sound, without buy-in from other departments beyond the analytics group, they will not be used properly or at all. This is particularly true for large organizations where marketing channels may be managed across a diverse set of departments and budgets. Many businesses split management of channels across multiple teams and incentivize marketing managers on performance leading to internal competition for the same conversions. Some search marketers believe that a last-click model is the most effective because the search occurs closer to the conversion.
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  Understanding Multi-Channel Attribution 5 NotAll Marketing Touches Are Equal Each marketing impression or touch in the conversion path has a unique value – and few, if any, are equal. A thirty-second TV spot, a quality visit to your website, a walk through your brick-and-mortar business are significantly more valuable impressions than exposure to a print, display or text advertisement. A paid or organic link on a SERP for a competitive non-brand search is much more likely to drive incremental business than traffic from someone searching for “YourTradeMark Coupons” and coming through an affiliate. What creates value is learning what lift can be credited to each impression, not which ads consumers were exposed to. These touches shouldn’t all be treated the same, and good attribution systems need to understand and identify those distinctions. When solving for attribution, you need to determine the “influence potential” of each ad click, impression and site visit by considering the following factors: Ad timing Ad decay rate Conversion Products sold Dollar amount spent First-time vs. repeat buyer With this in mind, you can build a model the will predict consumer decisions as accurately as possible. While human behavior can be difficult to measure, you can build and test an attribution model that factors in the ‘how’ and ‘where’ someone encountered your product or ad. Then, test the results of your attribution model. If the model -- which attributes the predicted behavior to the previous action -- matches the results, then your model works. If not, you’ll need to tweak it and test again. Weighting Attribution Factors A consumer’s path to conversion is unique for every business. It is crucial to set attribution weights accordingly to clarify how various marketing channels – including online and offline media – interact to allow your optimization engine to leverage these insights to your advantage. Even within each marketing channel, it is important to gather the following channel-specific data to identify the true value of a click from that channel. Clicks Conversions Average Order Value (to normalize the effect of large orders that can skew data) Number of Channels per conversion Clicks and average order value can come directly from analytics or the channel tool. Conversion counts come from isolating the number of conversions attributed to the channel by dividing the number of conversions by the number of unique channels associated with each conversion. Three Multi-Channel Attribution Strategies 1. Multi-Channel Attribution Across Digital Channels. The effort to understand which digital marketing channels, i.e., social, display, video, referrals, email, search, contributed to a particular conversion (or multiple conversions). 2. Multi-Channel Attribution Across Multiple Screens. With the massive adoption of mobile phones and tablets, consumers are increasingly “four-screen” people (TV, desktop, tablets, and smart phones). That has directly translated into a more complex fragmented influence landscape leading to the effort to understand how individuals experience your brand’s digital existence across multiple devices. 3. Multi-Channel Attribution, Online to Store. The effort to understand the offline impact driven by online marketing and advertising. For example, conversions (i.e., sales, leads or catalog requests) driven to a retail store or company call center by the website, Facebook brand page or Twitter account. Source: Occam’s Razor blog by Avinash Kaushik
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  Understanding Multi-Channel Attribution 6 Tounderstand how different marketing channels influence conversions, begin by looking at standard metrics such as CTR (clickthrough) and CPA (cost per account), as well as engagement metrics from incoming website traffic such as time on site, pages visited and the time it takes to convert. It is also helpful to conduct incremental lift studies to evaluate the percentage of interaction from each channel that is incremental or provides an “assist” to another channel’s role in conversion. Search technology can enable these capabilities. The SearchForce platform, for example, provides the following three basic schemes for assigning credit to each click within a conversion path: Percentage attribution. With this option, marketers can specify a percentage that’s attributed to the first and/ or last click in the path to conversion. Any remaining credit is distributed to all clicks between the first and last. This approach works best for campaigns that generally don’t exceed three to four clicks, because you will be distributing some credit to mid-stream clicks without spreading them too thinly across too many clicks. Relative attribution. This method allows marketers to specify a relative decrease in credit based on a click’s position in the path, i.e., the credit assigned to a specific click is less for clicks near the beginning of the path. If you set this percentage to zero, credit will be attributed equally among all clicks. This option is appropriate for strategies that value the benefit of the last click more highly than others, but still want to assign some credit to earlier clicks. Custom attribution. This approach provides the flexibility to set specific percentages for each individual click in the path. This option is a good choice for campaigns in which each click makes a unique contribution to a conversion, and you want to make sure that these clicks each receive a specific credit instead of simply redistributing the remaining credit from other clicks. 7 Metrics to Link Digital Clicks to In-Store Sales Research shows that a growing number of consumers use multiple channels to make purchase decisions. According to The Multi-Channel Retail Report, co-sponsored by J.C. Williams Group, bizrate.com and shop.org, 26% of consumers that visit a store looking for a product subsequently buy that item from a catalog; another 25% of consumers that visit a store subsequently purchase the product online. In addition, more than two-thirds of catalog shoppers ultimately purchase a product online, while 39% of website browsers purchase a product from a print catalog. Here are seven metrics to help you accurately track the relationship between online and offline channels. 1. Online/offline orders and pick-ups. Track customers who searched and purchased online, then picked up their purchases in your brick-and-mortar stores. 2. Store locator pages. Provide relevant information like “find a store near you,” store hours, directions and phone numbers in all of your digital campaigns. 3. Time spent on website. The more time someone spends on your website, the more likely they’re interested in your product or service. Don’t get “too good” at driving online searchers to physical stores; improve your conversion marketing so the customer is spending more than just his or her time online. 4. Queries with geographic qualifiers. Some queries containing geographic qualifiers indicate offline purchase intent. For example, if someone is searching for a “dentist in West Vancouver” they’re more than likely looking for a dental appointment in a particular geographic location. 5. Local search. Some Yellow Pages advertisers use dedicated phone numbers for their campaigns. Try doing the same on the search side. If not, you’re not adequately tracking the campaign’s impact. 6. Promo codes. Create coupons or other online-specific promotion that’s only redeemable in the store (if appropriate). Customers can write down or print special codes that they can redeem in-store. 7. Post-purchase surveys. After consumers make online purchases, ask for their feedback through a post-purchase survey to get more information on buying behavior and offline impact.
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  Understanding Multi-Channel Attribution 7 Conclusion Thegrowing interrelationship between marketing channels is creating new and exciting challenges for search marketers. Every brand wants to find the most effective, profitable marketing mix for its products and services across all channels. The struggle is to monetize paid search, in terms of accurately measuring its impact on sales and customer engagement. While this is not a difficult concept to grasp, it is difficult to break down the problem into actionable tactics that can be readily applied to your PPC programs. Designing an appropriate attribution model can be complex, but with the right conversion tracking technology, and by following a set of best practices, you can use conversion data to your advantage to boost performance and understand your sales channels with more precision and clarity. While there is no standard set of models that will make sense for every marketer, you can develop a consistent attribution framework that can be applied to each business problem that will positively affect campaign results. Remember, multi-channel attribution is no longer a luxury. It is an essential tool for drilling down into conversion paths to help you optimize performance and determine which strategies work best to create more profit and revenue. About SearchForce Since 2004, SearchForce has been a pioneer in delivering high performance search marketing tools. The company offers advertisers and agencies one online platform to effectively manage large-scale paid marketing campaigns across all search engines, including Google, Yahoo!, Bing, Facebook and more. In addition to bid optimization and campaign management, SearchForce offers cross channel attribution for a more accurate view on paths to conversion, plus a localized platform that supports multiple languages, time zones and currencies. Learn more at http://www.searchforce.com Headquarters: 3 Waters Park Drive Suite 211 San Mateo, CA 94403 Telephone: (650) 235-8800 Fax: (650) 312-8661 NY Office: 27 West 24th Street Suite 704 New York, NY 10010 Telephone: (212) 255-8399 Fax: (212) 255-8395 Digital Marketing Depot Search Engine Land, Search Marketing Expo, Digital Marketing Depot, and Marketing Land