ADOTAS – Someone at a recent conference Tweeted a link to an article explaining the difference between attribution and optimization as it pertains to paid search and online marketing. I am unsure what one has to do with the other, but I am guessing that some people are using the terms interchangeably, and this is incorrect.
Attribution has to do with giving credit where it’s due, i.e. knowing which channels, keywords and devices lead to a sale. Once the revenue is allocated appropriately, marketers can calculate ROI to understand the profitability and true contribution of each sales channel. This information informs future marketing- investment decisions.
Attribution modeling is a critical component in online marketing — otherwise, different channels and parties involving affiliate marketing programs can and do claim credit for the same sale. The duplication is evident in performance reports from their paid search, email, affiliate, display and remarketing vendors: The total activity of all these programs doesn’t match what is reported in web analytics. The overlap can be substantial (20 percent incremental would be considered on the low side, for example). Ultimately, the number needs to be 100 percent — not 120 percent — so decisions need to be made about which marketing programs will win credit for the overlapped sales. Once the orders are de-duplicated, ROI can be calculated at the marketing program level. This is typically the circumstance that drives the attribution discussions.
There is also keyword attribution that occurs specifically in paid-search campaigns. Some consumers conduct a single search on a search engine, click on a link and then make a purchase or not. In this case, the ROI is a simple calculation of revenue into cost-per-click. Other consumers (at least 30 percent) conduct multiple searches before buying, especially when we’re talking about high-ticket items.
In the multi-click scenario, someone might search for a generic item such as “laptop’” and then search on — and subsequently convert on — the brand term “Dell.” The keyword “laptop” assisted in the sale so it can be argued that it should be credited in part for the sale. If not, “laptop” on its own will be considered unprofitable even though the sale on the “Dell” brand term never would have happened without it.
Advertisers could choose to either split the revenue across all the keywords in the clickstream, give it all to the assist term (laptop) or give it all to the trademark term (Dell). Whatever model advertisers choose is at their discretion. However, many search marketers are still constrained by the technology they are using to manage their paid search. The majority in the industry have no choice but to go with either the first or last click, depending on which platform they are on.
There are other forms of attribution that marketers are grappling with, too. An emerging discussion surrounds device attribution, in which a user initiates a search on a website from multiple devices. At present, cookie synchronization does not exist, so there is no way to track the same user from device to device. Yahoo is working on a mechanism to track activity about users signed into their Yahoo account on all devices. We suspect Google is doing the same. To conclude, attribution and optimization are not related in any way. Optimization as it relates to paid search entails making changes in the search engine interface (or through an editor) to improve a campaign’s performance. These changes could include keywords, landing pages, match types and negatives, campaign structure, copy, geotargeting, day parting, bidding and more.