Congratulations, you just came in last place and won. “Hurray, I just came in last place!” you cheer. “Wait that doesn’t make sense,” you think to yourself, “how can I win if I came in last place?” Good question. Yet that is how most companies treat their conversion channels. In fact, I just had a client ask me which method, first in or last in, is the best one to use. My answer was “Response Attribution is the best.” Last in or even first in channel attribution does not give you a clear picture on how your hard earned marketing dollars are truly performing. However, Response Attribution, or fully understanding how each channel is impacting conversion for different groups, does.
“But last in is how my company and others like it have been counting conversions for centuries (or maybe a decade)” you object. True, but does your company still have every Friday off and hand out thousands of stock options to every employee like they did back in early 2000? Probably not. Look, there is nothing wrong with counting conversions based on last in or first in. In order to assign a value to some channel, you need to have a method that is quickly implemented in your web tracking tools and usually, by default, it is last in or first in. It is the first step in the evolution to truly understanding how all of your marketing efforts, across all of your channels, are really impacting conversion. But, that is all it is, a first step.
So intuitively you ask, “OK, I’m listening, what’s the next step?” Excellent question. We consider truly understanding how all of your marketing spend is impacting conversion in a 3-step process. We’ve already covered the first step of assigning value to different channels by some method to get the process started. The second step is capturing all of the data for each channel that drove the conversion. The first type of data that needs to be captured is direct data or data that is directly traceable to a conversion, such as email data, website data and click-through data from affiliates, display ads and social media. The second type of data is indirect data or data that has to be inferred to have driven a conversion. This data can be derived from TV ads, billboards and the infamous display ad view-through. Some of these two types of data can be captured using web analytics tools, but most inferred data is stored in separate databases and needs to integrated with the rest.
“Wow! That’s a lot of data to look at,” you say, “so what am I supposed to do then?” Simply put, understand how your channels are influencing different customers. You need to understand how your potential and current customers will interact with you and how effective it is to send them an email, show them a display ad or do nothing and let them come to the site. This is Response Attribution – , taking all of the data mentioned above and building strong, robust highly executable models that will allow you to truly understand what channels you should continue to spend money on and which ones you should increase or decrease your spending on. The decision on spend will not be the same for all people. For instance, you may have a group of people that see display ads but never click them, receive emails but never open them and get catalogs but never order by phone. However, that same group of people contains some of your top customers. Does this mean that all of the other channels are ineffective? Maybe, maybe not. Response Attribution will give you the insight you need to understand which of those channels you should spend more or less on. For instance, view-throughs usually aren’t that effective, so perhaps you can pull back on that, or maybe emails are annoying to this particular group; so why annoy them if they will continue to spend anyway. These are the kinds of answers you can only get from building sophisticated models and looking at all of your data across all of your channels.
keep your mind on the customer and the customer will keep their mind on you
To summarize, last in wins, isn’t necessarily a bad philosophy, just not the right one. Truly understanding how each channel a consumer touches impacts conversion will help you increase your ROI across all channels and lead to a better marketing experience for the consumer. As always, keep your mind on the customer and the customer will keep their mind on you.
Questions / Comments contact me
Linkedin: David Kimery
Twitter: @dkimrey
Email: david.kimrey@experian.com