The Flaw of Last Click AttributionTweet
The Flaw of Same Session / Last Click Attribution
Think of a traditional retail purchase at a store without eCommerce…heck; let’s imagine the Internet doesn’t even exist for this scenario.
The potential customer is watching TV and sees an ad from a new store in the area, for a product she needs for the house. The next day she heads out for a shopping trip to her usual stores, but happens to see a billboard for that new store. She knows the general location of the store but cannot find it until she spots a WACKY WAVING INFLATABLE ARM FLAILING TUBE MAN in the parking lot of the new store. She walks in and browses the merchandise, but doesn’t purchase anything until a nice young store clerk shows her to the product she saw on the TV commercial. She walks out a happy customer.
The story above isn’t unimaginable; it could very well happen 1000’s of times per day. Multiple marketing mediums touched the customer before she made the purchase. So what channel gets the credit? Did the TV ad cause her to buy from the store? Was the billboard the real winner in the marketing mix that reminded her that she wanted to shop at the new store? How about the WACKY WAVING INFLATABLE ARM FLAILING TUBE MAN? He practically ushered her into the parking lot! Or, was it the young store clerk taking her directly to the product that made the sale?
Ask 10 different people that question and you will get many different answers. The clerk would say it’s all because of his product knowledge and Brut cologne he was wearing that day. The Arm-Flailing Emporium owner would say it was the high-quality arm flailers that made the sale. Mr. John Billboard would argue that his billboard location and design really drove the sale. And the producer would say it was the amazing TV spot that was responsible for the sale.
The problem, of deciding which channel to credit the sale to, is extremely difficult to solve. If you take one channel out of the mix, the sale may not have occurred at all. So, in order to produce more sales, which channel should get more funding? Which channel drives the most sales and how do you measure that? It is a very real problem that companies deal with every day. And many companies simply make educated guesses at what works.
Online Attribution Issues
The very same situation occurs online with the customer never leaving their seat. They see banner ads, organic and paid search engine results, retargeting ads, social media influencers, and email reminders. These channels tie together to make an online marketing mix that each contributes to the final sale. Some channels get credit for more direct response sales than other, like paid search and affiliate marketing. While other channels, such as display ads and social, impact the awareness of a product or company more than directly driving a sale. So which is more important?
Last Click Attribution or Same Session tracking, basically gives credit of the sale to the last channel that the visitor touched. So if a user clicks on a paid search ad and then buys, they are considered a paid search customer; plain and simple. It does not matter how many other marketing mediums touched them prior to the paid search ad, they are counted as a paid search sale. Many, many companies measure their online sales this way.
That almost seems lazy, doesn’t it?
It is. But it is also extremely difficult to accurately measure a complex multi-channel marketing mix. The scary truth is that many companies have no idea what value the marketing channels, as a collective mix, adds to their company’s success. They measure each medium at an individual last click attribution model, but that only tells them that each channel is capable of driving a sale, sometimes. Not how the channels work together to make the most efficient mix.
What is the better solution, if last click attribution is wrong?
What all of the above boils down to, is a basic lack of available measuring tools. Multi-channel attribution is the holy grail of online marketing. Unfortunately, it does not exist in a perfect form. There are a few companies out there that claim to provide multi-channel attribution measurement. These companies often assign a percentage of the sale to each subsequent visit. This methodology gives the last click the most value and each previous click less and less of a percentage value to the sale. It can also be customizable, like Kenshoo (bid management tool), but it is only as good as the attribution percentages you put into it.
You can gather patterns and make an educated guess about which channel provides the most value by using this type of attribution. But even then, it is all relative to how you setup the attribution model. And with each company being different, it is extremely difficult to build a multi-channel attribution tool for the masses. Your best bet is to invest heavily in an analytics team that will find a custom way around this issue. They will be able to closely figure out the appropriate percentages to apply to each channel.
Well, What is the Solution?
If my answer in the previous paragraph was vague, that’s because I do not know the answer. I don’t think there is a 100% correct answer. If a company can figure out an attribution model that allows their marketing team to make data driven decisions; I would call that a successful model. And really all that matters is that we are making data driven decisions to improve the company.
Google Analytics and AdWords Search Funnels are great free tools on the market which help shine light on multi-channel attribution. You are able to see assisted clicks and assisted conversions within AdWords. And you can see organic, paid, banner, affiliate, and more channels within Google Analytics. Google really took a big step towards helping businesses figure out where their valuable clicks are coming from. The capabilities are more powerful than many large companies realize, and much easier to use than large analytic suites like Omniture. Google Analytics Multi-channels funnels are a great way to see the traffic and sales paths and funnels on your site. But you still have to add weight to those clicks manually and setup your own attribution formula, most likely in Excel.
The Danger of the Flaw
The big danger of Last Click Attribution / Same Session tracking is that bad decisions can easily be made with poor data. The conversion data is skewed since certain channels often receive the majority of last click sales. It’s just a fact that certain channels are further down the purchase funnel than others. And it is also all too often that a company cuts back on awareness campaigns to put more money towards direct response marketing.
The act of shifting funds from awareness to direct response is usually caused by a lack of understanding how the marketing channels work together. By cutting awareness, you also impact the future of direct response, which can then lead to a tailspin of bad marketing decisions. Appropriately attributing a percentage of sales to the first-touch awareness campaign ensures that all channels in the mix will receive appropriate funding in the future. That is why multi-channel attribution is so important.
*That’s a lot to take in. Let me know if you have any questions or comments.