What is the ROI of your marketing program? How much should you spend on one channel vs. another?
Unless you are the CMO, chances are that your answers only look at a component of the entire marketing mix. Whether your organization is setup by function (email, web, direct, tele) or segmented by product or solution, only a total view of all marketing touch points will provide an answer.
This results in answers to the ROI question that may be incomplete. And are more than likely completely misleading your marketing mix decisions.
I recently spoke to a marketer who reported a “400% return on her marketing program.” But when I asked her how much of the other marketing activities at her company had touched those same converted prospects, she had no idea. She was getting all the credit because her program was the last one to touch the customer before they converted into closed business.
The “Last Click” Problem
The classic marketing funnel looks at leads as the progression of a person from being identified as a prospect through revenue close. Even putting that into customer terms, it looks at the progression from a person’s unidentified pain to defined business challenge to solution identification, consideration and selection.
But this is incomplete for a number of reasons:
- There is almost always more than one person involved in B2B purchase decisions
- Many factors affect the buyer journey
- Influencers and decision makers will often be in different buying stages at different times and may not always be moving down through the funnel in linear fashion
So just because someone at a prospect company clicks on your paid search campaign and then turns into a paying customer, does not necessarily allow you to “take credit” for what is very likely dozens of touch points across multiple people at many different points in time. This is called the “last click” problem of Marketing Attribution. In simpler terms, I like to call this the “who gets credit” problem.
In my B2B Marketing predictions for 2011, I said that this would be one issue that finally made it onto the radar screen for marketing executives.
Boy, was I wrong! In multiple searches on Google, I found nothing recent or very helpful regarding this topic on the first page. Maybe marketers don’t have the tools, resources or energy to tackle this problem. Is assigning all value to the ” last click” good enough?
The Answer: Marketing Attribution Modeling
Marketing Attribution Modeling could be defined as the science of determining the value of each customer touch point leading to a sale as opposed to just the last one.
There is a way to do this without hiring an expensive consultant or using an advanced analytics program, although I would suggest doing both (full disclosure: I do work for a software company!)
But it starts with the realization that this is important to do, that this analysis is just an extension of trying to understand what works and should help determine how much you should spend in each element of the marketing mix. You also should realize going in that someone will not be happy with the results. Someone is going to disagree with how you assign “credit” or value for creating revenue.
If that doesn’t scare you, the math that follows below might. So consider not reading any further. Think about how your company assigns credit for marketing return. Or simply blow this off as crazy “change-agent” talk. Either way, I’d love your comments below.
How To Attribute Marketing Value: “Pipeline Influence”
This isn’t perfect, easy or for the math-challenged but it can provide a better view into the appropriate value of your marketing contribution by campaign. This approach requires contact details for each marketing touchpoint, so website visits that do not gain registration, social interactions, ad impressions – none of these will be counted unless they gathered registration.
Step 1: Start by looking at only those companies that were touched by marketing activities and turned into customers. Your time frame should be at least 3 or 6 months greater than your typical sales cycle. The longer the time frame the better.
Step 2: Look at all the contacts and all the marketing touch points of those customers.
Step 3: Identify the revenue or pipeline value of those customers. There are different reasons to look at revenue vs. pipeline. Revenue will allow you to asses those programs that drove only revenue. Pipeline will produce a larger pool of contacts and will look more generally at marketing effectiveness.
Step 4: assign a relatively higher percentage value to each touch based on the proximity to the last touch.Then apply that to the total for each contact touch point over the sum of all contacts and touch points. So if there are 3 touch points, you might assign the first 10%, the second 30% and the last 60%. Obviously, there can be many factors to consider.
Step 5: add all the values within each campaign to get an average score.
Ok, so maybe you should ask someone who has done this before to help you. Having used this kind of data to make marketing mix decisions, you quickly see that the common “last touch” tactics (tele, web visits, webcasts) still get most of the credit. But those typically seen as a first touch will look much better than before (display, social, email).
These are my thoughts but what do you think? Let me know in the comments below?
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14 thoughts on “Marketing Attribution: Who Gets Credit For Marketing ROI?”
Michael, overall, it is an interesting observation. There seems to be some overlap with lead scoring, which assigns a probability for when the customer is ready to engage with a salesperson or is making a buying decision.
I think you are correct in assuming there are some touchpoints that are more valuable to a prospect than others, and may significantly and positively impact interaction subsequent to that touchpoint. Key indicators of these critical touchpoints could be retweets of your blogpost by a prospect, or a sudden surge of visits from other users with the same domain, indicating that the prospect may have shared your content internally.
However, it is still difficult to assign an “absolute” value to a piece of content because of untrackable factors affecting the prospect such as a current vendor shortcoming, or a misinterpreted online behavior (i.e., You think the customer is really interested in your product because they went to many of your pages, but in reality, they were frustrated because they couldn’t find what they were looking for on any of your pages and are giving up.)
But yes, the credit question is important and can be answered easier as automation tools become more available to marketers. As marketers integrate their marketing mix with the ability to gather, store, analyze, and share data on a long term basis, they will be better able to see which touchpoints consistently are more successful than others and will be able to adjust their efforts so that results are optimized, and ROI will be credited where it is due.
Joe, thanks for the comment and really appreciate your point of view. So we agree it’s important. Now it’s just a matter of searching for the right tools and know-how. I can support that!
Nice post, Michael. I wanted to hear your talk at the Marketing Forum, but was too tied up with appointments. Part of our practice is centered around computing Return On Marketing Investment (ROMI) for our clients. We use a suite of tools, including a genetic programming package, to build the structural equation models we use. Typically, the models include external data as well as that which the client supplies.
It’s an exciting topic – we learn something new on every engagement.
Director, Bus. Dev.
Optimization Group, inc.
I am really bummed we didn’t get to meet up. I hope we get the chance next time. Thanks for your comment and insights.
Great discussion, Michael. And, I think the truth is even more complicated than that.
Consider that each contact may have been influenced by more than one element of the mix.
Then consider that he/she may not even be consciously aware of some of those influences.
Still, a very fine article. Very insightful.
I was trying to simplify as much as I could but you are absolutely correct. I think it is up to software execs like us to help lead marketing in this area!
To what extent can this be done with Google Analytics?
What technology do you suggest for gathering this data?
I find the marketing automation applications can be used to gather all this data because unlike Google Analytics, which keeps overwriting cookies with each new source, they keep a detailed trail of attribution.
What’s the easiest way to collect this data. Any free solutions?
Thanks for the comment. Unfortunately I am not an expert with the tools but most of the top CRM applications can help you track leads and opportunities at the contact level across all marketing touch points. But many companies are using specialist vendors to “data model” the effects of advertising and other unidentifiable marketing efforts.
If you identify any good sources of information on tools to do this, please let us know.
What do you feel is the industry term for this these days. Is it still influence or something like share or contribution to pipe or revenue?
I suggested “attribution” in the Title. I’m not sure that’s the right term but at the basic level, there needs to be an attribution or maybe “allocation” of value across each and every customer touch point.
Michael, excellent post. And, yes I think this is an important challenge, not only as outlined, but also as one considers some of the added factors Phil mentioned above.
This challenge is made even more difficult for large B2B shared services, or matrix org marketers when trying to convince product and solution p/l owners to allocate spend on various types of content. If one can’t draw a line from awareness to the register, then line marketers remain reluctant to fund many types of content into the marketing mix, regardless of analysis demonstrating historical lift in certain attributes like affinity.
Does it matter? Well, ROI-driven marketers may be missing an opportunity to influence sales by utilizing engaging thought leadership, and brand–driven content. Why? When purchase attributes are at or near parity in the consideration set, which touchpoints can impact the sale? Evidence shows that brand strength and affinity can make the difference, and content is a great vehicle to drive that.
Yet, without specific “attributable” evidence in the form of ROI, you’re asking budget owners to take a leap of faith. So, instead they spend money on last click programs with 400% ROI. Who wouldn’t?
That’s why this is an important question. We know what we’re doing doesn’t get to the whole story. But we also know we’ve got to provide better attribution in order to be responsible and accountable partners to the rest of the organization. We’re not there yet.
Thanks Paul, This is a complex issue that very few seem to be talking about. I appreciate you weighing in and good to know you’re fighting the battle for proper attribution.
Michael, I weighed in at my own blog about attribution in B2B, mentioning your excellent post: https://www.biznology.com/2012/08/the-thorny-question-of-marketing-attribution-does-it-apply-to-b2b/
Thanks Ruth. I really appreciate that!
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