The marketing game has changed a lot in the past decade, and the rules by which we all play in it are no exception. We need to be constantly on our toes because each emerging medium -- from new online channels and social media, to mobile and tomorrow's "next big thing" -- requires us to respond -- and quickly.
It's no longer just about being in the places potential customers will see you or successfully launching a campaign in the latest "it" medium. You now need to understand how effective these campaigns actually are and, perhaps even more importantly, know when they're not. The majority of advertising channels, especially digital ones, can now be monitored in ways that deliver specific feedback on who sees what, where they are from, who buys, and similar valuable information.
The obvious conclusion is that this makes all of our jobs a lot easier; we can better understand marketing performance and ROI. But it also means we have to understand the marketing performance and ROI. And not just for each campaign and channel, but for marketing overall.
Just like the marketing game and its rules have evolved, so too have the ways we score it.
Marketing success is not -- and rightfully, shouldn't be -- measured by page views, click-throughs, and cost, per acquisition; it should be measured by the tangible contributions that complete programs make to the bottom line. For smaller organizations with limited media buys, it requires a forward-looking vision and a change in mindset; for large corporations with multiple business units, several products, and several different teams managing programs, it can seem near impossible -- but it's certainly very much achievable.
Last-click metrics lose star status
For years, marketers have been measuring campaign performance with the same metrics, like last-click attribution, an approach where marketers were giving 100 percent of the credit of a conversion to the last advertising touch point that the user was exposed to. Although this became the accepted practice, it neglected any and all interactions with the brand prior.
To bring in a basketball analogy, think of last-click metrics like the star basketball player. He scores the most baskets and leads the team to victory, which in turn means he becomes the fan favorite, gets the endorsements, and is paid an impressive multi-million-dollar salary. Meanwhile, the guard that makes the passes to set up all of the star's big baskets never makes the highlight reels and is traded at the end of the season.
As the coach of the marketing team, it's your duty to look beyond the last click and recognize the other MVPs in your marketing program. Last click is still a very important part of the equation, but you need to understand exactly how it's delivering in the context of the entire team of programs.
Technology captures the complete picture
We all know the Holy Grail of advertising is to capture which half of ad spend is wasted, and we are closer than ever before to finding that out through true multi-channel attribution. It is a process that allows marketers to actually split the credit of a customer conversion and gives an appropriate portion of that credit to each and every advertising touch point to which the user was exposed.
In the past, we didn't have the technology to compute this weightage by processing terabytes of user-level impression data. Now, the advanced database technology and data-mining algorithms are available to find the accurate weightage for each touch point. So, marketers quickly find out new opportunities and insights -- plus which channels assist the performance of others, how adjustments in spend will impact ROI, and even how creative assets should be adjusted, among other factors.
By conducting research into data across our customer base, we used cross-channel attribution to determine that, in general, online display, direct mail, and email channels serve as the most effective touch points to introduce a consumer to a brand or product, while social media and mobile ads continue to influence users toward action. Normally, search or affiliate channels are the last point of contact prior to a customer taking action, and hence, drive the last-click-based credits. If we ignore the introductory and influencer channels and look only at the last clicks, we are ignoring more than 94 percent of all touch points -- proving, once again, why last-click metrics are ineffective in today's informed marketing world.
Maximizing the value of cross-channel attribution
Measurement is great, but it is only really valuable when it's put to use to better understand customers, address problems, and most importantly, optimize campaign performance. Or for the sports-savvy reader, make sure that each of your players is putting in maximum effort for his respective position so that the team is working effectively toward the same goal and, ultimately, is more successful.
Cross-channel attribution, when put to use properly, can do a lot more than simply boost sales. It also enables marketers to get more bang for each marketing dollar and cut wasteful marketing spend. There are advanced attribution technologies that provide recommendations for how to best execute campaigns. These systems, for example, can find the affinities between certain display creative assets and search keywords, then provide specific advice for which creative asset to pair with which keywords, the order the customer views them, how often each should appear, the time lag between each, and so on. Because technology does the heavy data lifting and most of the thinking, marketers can act quickly to implement the program.
All of this will keep return on marketing investment higher and spend lower. Based on our observations, on average, marketers who optimize their campaigns using cross-channel attribution techniques increase return on marketing investment by 18 percent year over year. As attribution techniques evolve, these returns will only increase.
Marketers who don't update their rule books to embrace the changes happening around them will end up as the biggest losers.
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