August 22nd 2014

What is Last Click Attribution and Why You Should Avoid It

Image Dylan Touhey

Every marketer has heard of A.I.D.A., right? This little formula is explained in every marketing textbook, mentioned in thousands of blog posts, and pretty much drilled into every marketer’s head. So when it comes to investing millions of dollars into digital marketing campaigns, we wouldn’t forget about something so basic, so logical, and so elemental as a sales cycle? We wouldn’t forget that strangers typically become customers through 5 basic stages: awareness, interest, desire and decision, and then finally action?

Until recently, we as digital marketers really have been blinded by “last click attribution.” It’s a fancy way of saying that digital marketers tend to give most, or all the credit, to the last marketing touch-point. In other words, digital marketers tend to focus and invest most heavily into the last stage of the buying cycle–action.

Last click attribution is why SEO and PPC campaigns have retained the lions share of digital ad spend over the last 10 years. Let’s face it – everyone heads to Google once they become aware of and interested in a brand, product, or service. And this awareness and interest usually arrives from another ad source such as a banner ad. Yet the banner ad that started and planted your message into the consumer’s brain to get the whole thing rolling gets none of the credit. Instead PPC search ads and SEO campaigns get all the glory because if you’re anything like 95% of digital marketers out there, you’re probably using Analytics to measure your campaign conversion and those conversions are inherently tied to the last click generated before the desired action (sale, lead, download, etc) was completed. Clicks sell products. Clicks create leads. Impressions? Wasted brand awareness, right? Think again.

Blinded by search

According to Microsoft’s Atlas Institute, 93-95% of audience engagementswith online advertising receive no credit when it comes to ROI calculations.

This means that when reviewing where to invest their media budgets, marketers typically are only looking at 5-7% of consumer media interactions. This is known as “last click” blindness.

Let’s think for a minute how ridiculous it is to only count the last advertising message that drove a customer to action.

For starters, we don’t use just one channel. These days our customers experience and are influenced by a myriad of fragmented marketing messages: they might see a display banner, hear about your product via a Tweet or Facebook mention, later notice a Facebook ad, see some of your print advertising, click a promo code on a coupon site, search for your company using branded keywords, and finally land in your shopping cart via an affiliate promotion. In other words, the consumer buyer cycle has multiple touch points that interact in a very non-linear fashion.

So obviously if a user is searching for ‘Yamaha P-80 keyboard order online’ they are at a late stage in the buying cycle (conversion funnel). More than that, they have been exposed to other marketing messages. It could have been a visit to a music store to talk with a sales person, performed a general organic search for ‘best starter keyboards’, seen a print ad, or have educated themselves via review sites and social media.

Yet, search marketers will show you reports filled with very convincing data attributing your sales to paid search ads and SEO. They will tell you that your most profitable keywords are branded keywords, perhaps without thinking about what actually led that customer to know the name of the product they’re now so intent on buying.

In other words, while top-performing marketers are using many different channels to influence and persuade consumers, our ways of analyzing and understanding the purchase path are seriously flawed. We are seeing everything through a direct response lens where action is everything.

As Google puts it,

“When a customer buys or converts on your site, most conversion tracking tools credit the most recent link or ad clicked. In reality though, customers research, compare and make purchase decisions via multiple touch points across multiple channels. So marketers that measure return solely on the last channel that a customer touches before conversion are getting an incomplete picture, and potentially missing out on important opportunities to reach their customers.”

For marketers, the challenge becomes how to develop an accurate methodology for measuring the partial influences of a complex ­combination of online advertising channels, a challenge that begins by moving beyond inaccurate “last click” attribution and evolving ROAS calculations to include the partial influence of social media, brand, display, offline promotions into driving purchase behavior.

Luckily, multi-channel attribution solutions are already racing ahead, trying to deliver you a more holistic understanding of the purchase path.

Enter the hero: multi-channel attribution reporting

With multi-channel attribution reporting you can see all of the consumer touch points involved in the buying cycle –from the original banner impression through to the paid search ad that triggered the user to transact. Specifically, this is done via attribution modelling which is the science of applying weighted values to each of your ad units and tracking how each of your ad units contributes to a desired consumer action such as a lead, sale or download. The result is a holistic picture about the complex and overlapping interactions between your different media touches.

For example, your prospect may have seen your TV ad Monday, saw a banner ad for your company on Facebook later that night, a few days later saw a banner ad on a content network, clicked on it, and then left your site. A week later, after a few organic searches, they click on an affiliate ad and finally convert. Multi-channel attribution is able to gather all those complex, interacting events into a single system, showing you the relative value and the combined ROI of brand and direct response advertising.

Your campaign metrics are poisoned

The problem with last click attribution (Google Analytics) is that it fails to take into account all the assisting players. These players occur earlier in the user’s conversion path, but are absolutely essential. With last click attribution your banner campaigns, and other media buys, get the budget shaft as your Analytics team starts measuring your campaign ROAS and attributing more advertising dollars to those last-click campaigns.

Subsequently your conversion metrics have been poisoned and you probably don’t even realize it.

But does it actually work?

Consider that the Atlas Institute found that 44% of sponsored search clickers are exposed to display ads prior to the click (study here). But, if you only look at the last click, then your data is telling you to invest more in pay-per-click rather than investing in display. The reality is that they are working together.

Even further, Atlas also found that 71% of sponsored search clicks are navigational in nature. This means your customers are being sold and engaged elsewhere and then clicking on an ad as simply a quick way to run into your shopping cart. Sadly, if you don’t have a more comprehensive reporting solution, then you will never know what is working lower down in the sales cycle.

Finally, an Atlas Institute study from a few years ago found that users who clicked on sponsored search and were exposed to a display ad from the same advertiser, on average, converted 22% more often than those users who only clicked on sponsored search only.

With multi-channel attribution, we can better understand the overlapping influence of our various marketing channels. And it’s a profitable perspective.

The future?

By 2016, Forrester predicts that $77 billion per year will be spent on digital marketing by 2016. This equals roughly the equivalent spent today on television advertising. Clearly, digital marketing is exploding beyond its early role of search and PPC. Yet, while digital growth is undeniable, there is still much work to be done in understanding how exactly the consumer arrives at our order confirmation page.

More resources on multi-channel attribution

First, follow us on Twitter (@Onenetmarketing) for more articles and digital marketing resources.

And for more info on multi-channel attribution visit Impact Radius. For full-disclosure, they are our client, but have an excellent blog dedicated to educating marketers on various aspects of attribution reporting.

Also see, ‘The Foundations of a Successful Marketing Campaign.’ And Altas’ whitepaper on the digital purchase path, entitled ‘The Long Road to Conversion.’

Other providers of multi-channel attribution include:

Categories: ALL, Marketing


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