The Ultimate Business Growth Resolution for 2017: Make the Most of Marketing Attribution
As we enter into a new year filled with limitless opportunities and prospects, why not resolve to build a smarter, more profitable business? But in a world where there are so many outlets through which you interact with your customers – from radio and TV to direct mail and email to your website and social media and beyond, how can you know for sure which of your efforts are really working and which are not? That’s where marketing attribution comes in. Marketing attribution is the practice of determining which channels are most effective in attracting and converting customers – both online and off – in order to:
- Measure how many marketing dollars should be allocated to each channel.
- Optimize content to drive more traffic and conversions.
- Attract new customers and win back former customers.
- Sync up offline programs with online campaigns.
- Accurately forecast your marketing budget.
Marketing attribution goes beyond simply counting clicks or following customers’ paths to making their purchases; it uses complex algorithms to determine which channels are driving the most revenue. Naturally, you’ll want to invest more dollars in higher-performing channels. If marketing attribution is such a powerful business growth tool, isn’t everyone taking advantage of it? Actually, no. According to Forrester, only 24 percent of marketers currently measure campaigns across multiple channels, which means that there is a huge opportunity for you to gain a competitive edge by taking the plunge into marketing attribution this year. Here are eight steps you should take right now to get started:
1. Clarify your objectives.
With information coming at us from all directions and devices, it can seem next to impossible to measure the ROI on any given campaign. So what’s the best way to narrow down all the possible factors to determine what’s actually influencing your customers’ behavior? Before embarking down the attribution road, you must establish clear direction. To get the results you seek, start by making a list of questions to help you clarify your objectives: Which channels produce visible results, and which can’t be seen?
- Which metrics will you track in order to gain the insight you seek? Revenue, lead volume, etc.?
- How many conversion points will the attribution system track?
- How do you currently capture and report on metrics? What are some areas where you’d like to see improvement? How do stakeholders receive data reports? Is there a better way to keep them informed?
- What mechanisms will be used to collect the data, such as specialized software or online forms?
- Does your company have in-house expertise on implementing an attribution model, or do you need to leverage an external resource?
Take the time to determine clear objectives before embarking down the marketing attribution path, so you can choose a solution that provides the end results you desire.
2. Start small.
In the digital age, there’s almost no limit to the amount of data you can collect and analyze about your customers and your marketing efforts. However, if you’re new to attribution, keep it simple in the beginning by focusing higher-level data, such as revenue and marketing spend, to avoid becoming overwhelmed with numbers. Save the more granular customer data for future iterations when you’ve got more experience under your belt.
3. Leverage technology.
If interpreting data feels like trying to read foreign language, the first step is to acknowledge what you don’t know and seek external resources to make the job easier. It’s not necessary to hire an expensive in-house expert; there are plenty of effective and affordable solutions available to help you analyze complex data and generate actionable insights. Whatever tool you choose, just be sure that you’re getting clean, accurate and trustworthy results.
4. Match up your metrics.
You probably already have discrete metrics and measurement tools in place for each marketing channel that you currently employ, from email to pay-per-click to social media campaigns. In order to make effective use of marketing attribution, however, you’ll need to establish a set of common metrics that you can use across all channels in your attribution analysis.
5. Work together.
Building a successful marketing attribution program depends on getting buy-in across your organization. Involve all of your key players – from managers to marketers to developers – when choosing a platform and planning its implementation. Collaborate to ensure the right questions are being asked and the relevant data is being collected.
6. Don’t expect perfection.
Rarely is any data set 100 percent clear and comprehensive. There will inevitably be some data that can’t be captured, leaving blind spots in your analysis. Without a crystal ball, there will always be invisible factors – both online and off – that influence your customers’ purchasing decisions. Despite these inherent limitations, even a partial set of attribution data will create a strong foundation for planning successful campaigns across multiple channels. As long as you’re looking at reliable sources, that information can be used to optimize your existing marketing campaigns and plan for future testing and analysis.
7. Compare attribution models.
Under the broad umbrella of marketing attribution, there are a number of models to consider, each with its own strengths and limitations: First and/or Last Interaction: Either the first or last point of contact is given full credit for the conversion.
- Pro: Interaction-based attribution uses previous purchasing behaviors to assign different levels of importance to various touch points.
- Con: This type of attribution can sometimes be subjective.
Last Non-Direct Click: All credit for the sale is attributed to the last indirect point of contact, such as an email link.
- Pro: This model enables marketers to gauge the effectiveness of their external marketing campaigns.
- Con: The Last Non-Direct Click method runs the risk of discounting a myriad of factors that come into play after the customer has clicked through the email.
Last Adwords Click: In this model, the most recent paid search click gets full credit for the conversion.
- Pro: This model enables marketers to gauge the effectiveness of their search spend.
- Con: The Last AdWords method runs the risk of discounting any influences that came after the click.
Linear: In this balanced attribution model, the credit is equally weighted among all points of contact in the path to conversion.
- Pro: This model is simple and straightforward, making it a great entry point for getting starting with attribution.
- Con: The linear method could attribute more credit to a touch point than it actually merits.
Time Decay: Whichever touch point occurred in the closest time proximity to the conversion receives the most credit.
- Pro: It seems logical that the later touch points ultimately prompted the conversion.
- Con: This model disregards initial points of contact, which may have helped to build brand loyalty.
Position-Based: In this type of attribution model, the first and last touch point each receive 40 percent credit, while the other 20 percent is distributed equally across all other interactions.
- Pro: The Position-Based model is a good choice for marketers who want to highlight how leads are generated and then how they ultimately convert while still accounting for the points of contact in between.
- Con: This model runs the risk of giving mid-funnel touch points less credit than they deserve.
8. Consider building your own model.
Every company’s attribution needs are unique. To ensure that everyone in your organization gets the relevant, accurate information they need to make informed marketing decisions, consider building your own attribution model. By partnering with a firm experienced in developing customized, cloud-based business management software, you can work together to design a solution that is tailored to your specific needs and objectives. Here’s to helping you build a more effective marketing and business growth engine in 2017!