More articles by Anto Chittilappilly
The Art of Attribution: Understanding the Attribution Funnel
ADOTAS – After all these years using last click-based metrics without any problems, why do I need attribution? Can’t we assume that the last click is a representative sample of all the touchpoints? These are some of the questions I hear time to time.
It was the father of modern advertising John Wanamaker who, way back in 1922, said “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” We haven’t been able to solve this problem until recently. We have been using last-click-based metrics all along, but we — like anybody else who is in advertising — have been wasting our precious dollars.
Attribution helps you to find out what is actually happening to your marketing and advertising. Attribution based optimization takes one more step and take actions to increase your efficiency and reduce waste. You may decide to wait on attribution, but in short time, your competition will adopt it. They may be able to sell the same widgets that you sell at a lower cost-basis at higher volumes.
That being said, can the last click be a representative touchpoint of all adverting that was exposed to that user? The short answer is no. But to understand this better, we need to look at the attribution funnel.
Like the sales funnel, the attribution funnel has a wide mouth and a narrow bottom. The funnel contains all touchpoints of individual users, which can be divided into three categories: Introducers, Influencers and Converters.
- “Introducers” are the touchpoints that introduce your brand to the users.
- “Influencers” are the touchpoints that continue to influence your brand and retain them as enthusiasts of your brand.
- “Converters” are the touchpoints that are touched just before the conversion. If you are only interested in brand building, as opposed to driving direct response, then the Converters are those touched just before the desired actions happen, like visiting your landing page.
Introducers, Influencers and Converters are not all consuming the same type of media, not exposed to the same channels and are not engaging in same kind of activity. As such, you need to adjust your strategy to cover each touchpoint.
Drawing on our work with clients, we’ve learned that online display, direct mail and email channels serve as the most effective Introducer-type touchpoints; social media and mobile ads continue to influence the users.
Normally, search or affiliate channels get touched at last and drive the last click based credits. If we ignore these channels and look only at the last clicks, we are ignoring more than 94% of all touchpoints.
Much like a football coach who praises his star receiver without thanking the quarterback and the line for their work making the play happen, the last-click method ignores the channels that contribute to the team’s goal. Last-click touchpoints are not a truly representative sample of all touchpoints.
If you optimize your campaign based on last-click metrics, the optimization is skewed in a way that completely ignores the Introducers and Influencers, even though they contributed ultimate conversion.
Time and time again, we’ve seen that the right mix of Introducers, Influencers and Converters are needed to build a healthy funnel that maximizes conversions at optimal cost — which is really what attribution is all about. It splits the credit of every conversion and gives the credits to all touchpoints that the converted user been exposed to, much like the quarterback gets credit for throwing a great touchdown pass.
Better though, is that the credit is distributed based on a weightage model that knows how much influence the each touchpoint had on that conversion (think of that offensive lineman finally making the highlight reels). Only then will you arrive at true metrics, which are not skewed and provide a more accurate optimization.
According to a recent study by Forrester Research, 87% of advertisers and 85% of the adverting agencies are still using last-click based metrics. This means the converter type media is getting all the credits in the marketplace. As a result, converter-type media is being oversold at higher costs and it comes as no surprise that Google is in an exponential revenue path. The Introducers and Influencers are in less demand and getting sold at lower costs, even though they are very important for the campaigns of most advertisers.
When all advertisers start using the attribution based metrics, this disparity of media costs will dissipate. In the meantime, the early adopters of attribution models are taking huge advantage of this disparity, buying the media in the right mix at bargain prices and building their healthy funnels.
Anto, good article. As more advertisers get a better understanding of the contribution of display and other touchpoints along the conversion funnel, and stop attributing everything to the last click, we should see some very different growth rates for display, social, email and mobile compared to search. Google gets this, which is why they’re putting an emphasis on display advertising, although I don’t think they’re ever going to be as dominant in display as they have been in search.
Isn’t this resolved by cookie based tracking in affiliate marketing? Although, it could be rewarding the affiliate that touched the customer at the top of the funnel as opposed to the bottom.
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