Who to Pay for a Conversion?

The debate about conversion attribution has raged on for some time now, and we in the digital marketing industry are obsessed with this issue. In case you missed it, the issue revolves around how to attribute conversions to online advertising-- should we credit the last click, or the last impression that occurs before conversion? Or maybe a combination of the two?

This issue is especially relevant as the use of pay-for-performance media networks continues to grow. Whether you are in the post-click camp or the post-view camp, I think the question should be approached in two ways, taking into consideration a) which events drove a person through the purchase funnel and b) who gets the credit. 

However, because so much has already been written about the first question (i.e. Was it a direct clickthrough on an ad? Was it a view-through action taken that happened after seeing but not clicking on an ad? et cetera), my focus will be on the second part. And I'm prepared to take a stand on the following radical premise: No matter how many influencer events occurred leading up to a conversion, only one company can be credited -- and paid for -- that conversion. Let's explore that theme in greater detail.

Here's an analogy to consider: Have you ever tried to place a phone call, gotten interrupted, and hung up before you even finished dialing? When you later complete the call, the phone company will only bill you once, because that's how it works.

Or take this scenario: You work in retail sales at a department store and you're helping a shopper on the floor. She's undecided about buying an expensive suit, and leaves the store uncommitted. Unfortunately for you, she comes back a few hours later and buys the suit when you're on your lunch break. In most cases, you don't get to share this commission just because you initially piqued her interest. The sale is attributed to the person who closes the deal; it's just how it works.

What about conversion attribution in the online world? It is critical to understand the sequence of exposures that lead customers down the rabbit hole we call a purchase funnel. This analysis is what fuels our media plans, our creative concepts and messaging strategies, and it's also how we optimize. But it becomes murkier when we try to assign credit for the actual conversion, especially in the increasingly popular pay-for-performance model media buy. Awarding credit means you've singled out the influencer who should be paid for that conversion, excluding all other influencers. 

Yet even in the world of accountability inherent to internet advertising, the issue of conversion attribution is anything but precise. Some of this is due to simple differences of opinion, but even if we could all agree, most advertisers come to find that the available technology wouldn't allow for it anyway. The reality is we operate in a jumbled world of third-party ad servers, specialized solutions for rich media and search, site analytics solutions and the re-emergence of the ad network. The more siloed your solutions are, the more imprecise your conversion attribution becomes.

As an example, take a media plan that consists of numerous sites being tracked by a third-party ad server as well as a couple of ad networks that are getting paid on a CPA-basis (cost per action). The conversion page is tagged with the third-party ad server's tracking tag as well as those of the ad network. Now, you effectively have three conversion tracking silos that aren't factoring in one another. Add a point solution or two for search and rich media in the picture, and we have full-blown attribution anarchy on our hands.

Not only does the advertiser have to worry about conversion attribution to the appropriate channel, they have to worry about the two ad networks billing them for the same conversion. Conversion duplication wasn't necessarily an issue for CPM-based media buys, since you didn't worry about overpaying for conversion. At worst, you might have made a mistake to spend more on a particular ad network or two since their numbers looked better than they actually were. With the move to pay-for-performance however, now duplication becomes an economic issue because you're actually overpaying for false conversions.

What to do? Vendor consolidation might seem like one way to solve cross-channel duplication issues, as fewer tags tracking conversions will mean more accurate conversion attribution. But consolidation isn't always practical.

Another solution would be to implement a smart tracking tag. And I'm not talking about the outdated smart tags of yesteryear; I'm talking about a full-blown, "this-is-the-last-tag-I-will-ever-need" kind of smart tag. I'm talking about a tag that can intelligently select a single tracking tag based upon the most recent exposure, allowing the appropriate party to capture the conversion-- essentially ensuring that whoever physically sold the suit gets the commission. Such a tag would end the issue of conversion duplication altogether.

That is why separating the notion of conversion influencers from conversion attribution is so important to consider. Clearly influencers are important to examine vis a vis their role in the purchase funnel. Examining influencers helps us craft better media plans, develop better creative concepts and ultimately deliver value to our clients. But when it comes to conversion attribution for the purpose of payment, only one company should be paid for generating the conversion. It's only fair.

Jason Bigler is the VP, advertiser solutions for DoubleClick. Read full bio.

 

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