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How we'll (finally) move beyond the last click

How we'll (finally) move beyond the last click Josh Dreller

Attribution is a measurement methodology in which all of the media channels that drive users to convert are assigned a value based on their level of influence. Even though most marketers agree that this is the proper way to evaluate their media, currently, only 16 percent of major advertisers are using attribution, while most still favor the "last ad click" as the sole influencer of a conversion. Attribution was the hot topic a few years ago -- so why hasn't it caught on with more marketers?

When I speak about attribution vs. the "last ad click" methodology, I usually use an analogy about two store owners who are trying to increase sales. The first one understands that all of his marketing works together so he tries to figure out the best media mix possible. The second one figures that because most of his customers come through the front door, by installing three more front doors, he will triple sales!

The second shop keeper's plan is crazy, of course, but don't laugh. If you're still only using the last ad click methodology for conversion tracking, then that's basically what you're doing too. Without a proper understanding of the influence of all of your media channels, you're just like the shop keeper who thinks his front door (i.e., last click) is his main source of revenue.

In survey after survey of top CMOs and marketing professionals, an understanding of media ROI is at the top of their list. So wouldn't proper attribution modeling be an important component for every marketing program? Doesn't seem like it. In a study done this year by Visual IQ, only 16 percent of advertisers who have more than $1 million in marketing spend per year are using some type of attribution. I'm on a mission to understand why this methodology has been slow to develop. To do so, I had to go back a few years.

Although I had been deeply involved in digital marketing ROI measurement throughout my career, my journey in attribution got a kickstart in May 2008 when I was invited to attend a breakfast road show for Atlas' brand new Engagement Mapping system -- one of the first attribution tools from a major technology vendor. Microsoft's VP of analytics, Young-Bean Song, showed off the company's revolutionary system and how a kaleidoscope of colored balls representing the various touch points of a digital campaign could help us visualize user paths to conversion. By assigning specific weighting to these ad impressions based on factors such as ad size/type, recency of exposure, etc., we would be able to accurately attribute the value of our digital media efforts. One quote stuck in my mind from that day from Young-Bean after the presentation: "Wherever I go and talk about this stuff, regardless of the questions on how the tools work, no one is really disagreeing with the fact that we have to go beyond the last ad click."

And thus, in the months that followed, at conferences, blogs, and boardrooms, the death of the last ad click was proclaimed and debated. At the peak of interest in this topic, I wrote an article for Search Marketing Standard, called "Tracking Sales Triggers with Conversion Attribution," which the publication put on the cover. From that piece, I received some brief notoriety, and a few invitations to speak on the subject. Attribution was the hot topic for the better part of 2008, so agencies and vendors quickly jumped on the bandwagon to develop tools and competency for the tidal wave of interest to follow. I even heard that someone had posted an obituary for the last ad clicked methodology on their blog.

Since then, the buzz around attribution has cooled down tremendously. Social media, mobile advertising, ad verification, the iPad, government regulation on tracking, exchanges and DSPs, and other hot topics have taken center stage, and most advertisers are still evaluating their media from the last ad clicked perspective. Ad servers and other tools have been able to incorporate some type of attribution modeling feature into their systems, but ultimately, the default conversion setting is still on the last ad clicked. I thought we put a bullet in the head of the last ad clicked three years ago? So why does it have the staying power of Jersey Shore?

To find out why the topic of attribution has cooled off, I went right to the source. Adam Goldberg, co-founder and chief innovation officer at ClearSaleing, is one of the top minds on this topic. His company, along with Visual IQ and Atlas, was labeled as "leading the pack" on attribution by Forrester in its 44-criteria evaluation of interactive attribution vendors, "The Forrester Wave: Interactive Attribution,Q4 2009." Goldberg's early webinars on attribution were groundbreaking, and you can access the entire library on his company's website. When I asked him about the current state of attribution and why's it has slowed down so much, he was quick to assure me that even though the buzz has cooled off, the adoption has not.

"In order to get beyond the 'last click,' a company needs a technology that can track a consumer's entire purchase path and automatically assigns credit to all of the steps in the path in a sound manner," he told me. "There is a cost to do this, and that is the biggest barrier to mass adoption. With that said, the search engines are providing free tools that allow advertisers to see beyond 'last click' in the paid search universe. Though those tools are not perfect, they do allow advertisers to see there is more to conversions than what happened last.

"Our customers are spending upwards of several million dollars a month on online advertising across many channels, so the cost barrier is less of an issue to them," Goldberg added. "Most companies will typically discover about 30 percent of their current ads are not helping their bottom line once they implement an attribution solution. They are able to eliminate this ad waste and reinvest those dollars in channels that are proven to be profitable under an attribution lens such as display, general search terms, and comparison shopping engines. Our average client receives a 400 percent to 600 percent return on their investment in ClearSaleing and an increase of 30 percent to over 100 percent on their ROAS once they begin managing their advertising using attribution management. We also see that ad budgets increase substantially when attribution management is implemented because they are able to justify ads that start a consumer down a purchase path versus only being able to justify the ads that occur at the end of a path. By entering the paths early and justifiably, they are able to reach new customers versus just spending on 'last click' marketing that typically only reaches consumers that already know you or have already purchased from you before."

But widespread attribution adoption definitely has some challenges. Let's take a look at some on them.

It's not easy
Most marketers don't have the mathematical skill set to take on the challenge of creating a proper attribution model. In fact, some might think it impossible. But, frankly, true mathematicians look at these math problems as highly solvable.

The tools haven't been there
This is true. Even though there are some attribution tools such as Atlas's Engagement Mapping, they really are only focusing on the digital media whereas true attribution requires all of the influencers and exposures to be tracked from both online and offline channels.

Not high enough priority
With all of the issues on a marketer's plate, it's just getting overshadowed by things like budget planning, managing employees, etc. Well, everyone knows you should eat right, not smoke, and exercise every day, but not everyone is doing that either.

Still testing and being quiet about it
Behind the scenes, advertisers and agencies have been investigating the vendors and tools in the marketplace so they can make an informed decision on which direction to take with regards to adoption.

No snowball effect yet
With attribution still in its infancy, maybe only one out of 10 competing advertisers is using it, so most companies don't feel behind yet. But, when five out of 10 companies in the same space are using it as a distinct competitive edge, the others will feel highly compelled to adopt it.

Fiscal budgets set yearly
For most advertisers, marketing budgets are set annually. Goldberg reminded me that many companies used 2009 and 2010 to and set their 2011 budgets months ago to account for these efforts next year.

No standards yet
Not everyone wants to jump in the pool immediately and will let the early adopters tweak the tools, hone the methodology, and work out the kinks. In fact, I think the phrase that "everyone wants to be second" applies here.

Agencies are hesitant
Attribution requires competency and tools that agencies might not have yet. Thus, there's a huge cost involved for them to get up to speed, and they may not be able to renegotiate with their clients to pay for these upgrades. Also, there's a real fear out there that attribution might show that they've been mismanaging marketing budgets based on conversion analysis driven by the last ad click methodology. How will clients react if they discover this?

Goldberg recommended that I speak to another top thought leader in the attribution world, Anto Chittilappilly, president and CTO of Visual IQ, to gain some more perspective. Chittilappilly expressed a similar point of view with Goldberg -- that attribution may have cooled off as a buzzword, but the interest is growing on pace with expectations. Chittilappilly felt that "educational factors are the most frequently encountered reasons for lack of adoption. This includes lack of understanding of what attribution is, what its benefits are, how to get started, what internal and external resources and tools are needed, and what a significant competitive advantage it provides once implemented. In fact, attribution management is a lot like search marketing as 10-12 years ago before marketers realized how important it was to their organizations' success."

The 16 percent adoption rate by large advertisers referred to earlier in this post is actually from a Visual IQ study. After our call, Chittilappilly sent me some more research from the document that supports his and Goldberg's bright outlook: "47 percent are thinking about employing attribution in 2011 to increase the ROI of their spend. About 18 percent of advertising agencies use attribution technology where another 63 percent are planning or talking about attribution based measurements for their clients in 2011."

Attribution adoption is not just being pushed along by advertisers and agencies. Tool vendors are incorporating modeling systems into their platforms as well, which helps to further the cause. Web analytics tools such as Omniture and Coremetrics, search management platforms like SearchIgnite and ClickEquations, and ad servers such as MediaMind, Atlas, and DoubleClick now have conversion pathway analysis packages. As marketers become more comfortable working with attribution in the tools that they're already using every day, it should break down the educational and fear-driven barriers to adoption.

Chris Brinkworth, CMO of TagMan, explains his company's impetus for working advanced measurement capabilities into its tool: "Building applied attribution into our platform was a natural, but major extension. With TagMan deployed and agnostically managing an advertiser's tracking tags/pixels, it made sense to then allow clients to independently choose which vendor tags should fire, what data is seen, and who is rewarded payment in real-time to further aid standard models."

So -- attribution: hot or not? I guess it's kind of both. No, it's not the hot topic of the day anymore, but all signs point to the fact that companies do have it on their radars and are working toward adoption as we speak. For an industry struggling with falling click-through rates, more top-of-funnel opportunities with display and social, and overall measurement woes, getting proper attribution in place might eventually help get more dollars flowing to the digital space. At the very least, with most marketers agreeing that attribution is a better system than "last ad click," it seems that the next few years could see a major shift in the way that we measure our success and failures.

Josh Dreller is VP of media technology and analytics at Fuor Digital.

On Twitter? Follow Josh Dreller at @mediatechguy. Follow iMedia Connection at @iMediaTweet.

As a media technologist fluent in the use of leading industry systems, Josh Dreller stays abreast of cutting edge digital marketing and measurement tools to maximize the effect of digital media on client goals. He has achieved platform certification...

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to leave comments.

Commenter: Liz Zedo

2010, December 06

I agree Josh, it is critical to understand how the clicks were generated (and what can increase clicks among target users), but what happens after the click, the click path and the conversion rate, are also critical variables that online marketers need to closely analyze. After all, at the end of the day it is all about CPA.

Elizabeth Kulin
Marketing Manager - www.ZEDO.com
Advertising Technology Partner for Publishers