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Untangling the Gordian Knot of campaign tracking – Part 4

When it comes to online campaign tracking there’s a new buzz phrase in town: “attribution management”. In our business you know where’s a trend when you get asked the same question twice in the same week and at the moment the question seems to be: “How do I attribute sales to different marketing channels in a more sophisticated way?” Increasingly advertisers know that the way they are currently tracking campaigns and their return on marketing investment is sub-optimal. They know that the current paradigm of “last click or impression gets the sale” means that they are potentially making poor decisions when it comes to fully evaluating the role of different online media in the marketing mix. There is the classic phrase in marketing: “I know that half my advertising spend is wasted, I just don’t know which half”. In the online era of almost total accountability, it seems that we are still struggling with this fundamental paradox.

The problem is simple. In the majority of cases, online advertisers use their campaign management systems or their web analytic systems to determine how they attribute sales (or other conversion events) to different online marketing channels. The current paradigm is that the channel that delivers the last click or the last impression before the visitor converts gets credited with the sale. If someone sees a banner ad, then does a search, clicks on a sponsored ad and then visits the website and converts, the investment in the sponsored search link gets the full credit for the conversion.

So, on those results you may take the view to reduce the investment in banner advertising and increase the investment in search marketing as that’s the channel that seems to be getting results. That’s all very well and good, but what about the fact that the customer saw a number of banner ads over a period of time which raises their awareness of the brand and prompted them to be more susceptible to clicking on the sponsored link when they carried out a search. The two different media channels are doing a different job; one is raising awareness and consideration, the other is generating a direct response. But only the direct response mechanism is being credited with the “sale”. The danger is that you then turn off the investment in banner and display advertising because it doesn’t seem to be doing anything and the next thing that you notice is that the number of search generated conversions seems to be going down. We live in a multi-channel, multi-media world and we can’t manage these things in silos.

The solution is…a touch more problematic. I think the key thing for advertisers to recognise is that the current paradigm is sub-optimal. Whilst they may be focussing their efforts on optimising their marketing investment within a channel through, say sophisticated bid management strategies, they may not be optimising their investment across channels because they do not have complete visibility on the dependencies of one channel on another.

The next question is then how does an advertiser recognise and quantify the indirect effects of some channels? The major challenge here is that many of the common technologies used in campaign tracking and analysis are not up to the task. The default setting for is generally to credit the last click or impression with the conversion event. In some cases it is possible with adserving technologies to look at the “halo” effects of display advertising on search activity but this is not a standard report and requires that the display and search campaigns are managed from the same tool. In some web analytic systems it is possible to define some basic attribution rules other than “last click wins” such as the ability to spread the credit across all channels that a visitor touches before they buy. However, as we’ve discussed before web analytic systems cannot take into account impression effects of display advertising.

According to a recent report by Jupiter on this issue (Next-Generation Response: Effectively Managing Attribution) the solution for an advertisier appears to be to turn to their advertising agencies. Some agencies have developed their own analytic systems that operate off the adserving data. These systems allow for more flexible and sophisticated attribution management but lock the advertiser into a specific approach. An alternative might be to bring the data in-house but that requires the advertiser to handle and manipulate large volumes of data that they may not be very comfortable with. Another possibility is to use a third party to collect, manage and report on the data on your behalf.

They say that recognising a problem is half way to a solution. When it comes to attribution management, the trend is that advertisers are realising that the decisions they are making on the basis of the data they have might be less than perfect. The challenge they face is that the solutions at the moment are somewhat limited. Hopefully we will see the technology providers in the adserving, campaign management and web analytics space working to provide better ways of understanding the complexities of the online marketing mix.

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