2023: The year brands get serious about attribution modelling
Marketing pioneer, John Wanamaker, famously said that half the money he spent on advertising was wasted, but he didn’t know which half. More than a hundred years after his death, the dilemma is familiar to everyone accountable for a marketing budget. It remains difficult to measure with 100% precision which campaigns, activities and channels are delivering the best bang for our marketing buck.
It’s true that digital media has introduced new levels of measurability and accountability to the marketing world. Yet despite the data and powerful analytics tools available to measure performance across channels like programmatic advertising and social media, it’s difficult to get the full picture of the customer’s journey from awareness to conversion.
Analytics tools such as Google Analytics help us to determine the source of a sale, but many marketers focus on only one source – usually the last touchpoint before conversion. From this data we may determine that 35% of sales came from search, 20% from display ads, 30% from Facebook etc. But without looking at the customer’s full pathway to conversion, our understanding is incomplete.
For instance, if they convert after a search, marketers will assume they bought because they clicked on the search ad. But it’s equally possible that they were enticed to search for the product or brand by a TikTok video, a Facebook post or a referral visit. In Google Analytics, we can take this into account with the assisted conversion feature.
This shows if the person has visited the site from multiple channels. That’s a bit better, although many marketers will simply count each of the channels as a separate sale. It doesn’t attribute a weighting to the influence of each of the touchpoints in driving the sale. This, in turn, means we don’t have the real insight we need to make decisions about where to allocate budgets to get the best returns.
Sharpening attribution models
In 2023, I thus expect to see more brands and marketers focus closely on sharpening the models they use to attribute credit for sales and conversions to the touchpoints and channels they use. The debates about attribution modelling have raged for years, but 2023 is the year that brands and markets will look at the full sales funnel.
The technology and practices to understand how different channels lead to conversion have certainly come a long way. The latest version of Google Analytics (GA4), for example, includes enhanced conversion paths, while Google’s Campaign Manager 360 (CM360) offers the functionality to credit sales and conversions assigned to different touch points. Google Analytics is a free tool, but CM360 is not.
Since Google is a major advertising player, some brands might be sceptical about whether its attribution models are unconsciously biased. If this is a concern there are alternatives such as Adinton, for example, which is a paid tool that helps brands to make more informed optimisation decisions. These tools might come at a cost, but the ROI is worthwhile.
With most economists expecting a difficult year and competition for cash-strapped consumer’s spend growing fiercer, attribution modelling is a key discipline. No company can afford to spend marketing and advertising budget inefficiently. Using the right tools to understand how different channels lead to conversion enables brands to get the best possible ROI at a time stretching their rands further truly matters.