Online marketing has come a long way from the days of banner and popup advertising. Today, it’s still all about targeting but, at the same time, also about ubiquitousness. As Mary Meeker put it, advertisers need to “proactively plant” themselves wherever the consumers are, in order to grab a share of average viewing time, which has almost doubled in the last ten years. (That magic number if 5.9 hours, according to Meeker’s latest Internet trends report.)
Thus, it comes as no surprise that, this year, marketers are planning to invest even more time and money in their digital strategies. Taking a page from Meeker’s book, digital marketers are putting their money where they can get the best bang for their advertising buck, especially relating to social media marketing and websites. This year, overall digital ad spend worldwide is expected to rise by 17.6% to $333.25 billion – a ten-year upward trend of about 5.5% per year since 2010 or a 60% overall increase.
So, which channels are getting the biggest share in spending? Brands are placing their best bets on online video, which will garner $2 billion this year, according to Dentsu Aegis. But the big winner here is mobile, with a $5.3 billion share or equivalent to 62% of the total digital spend.
The Problem with Attribution
Because we’re talking about quite a chunk of change, the question of payback, which many consider the holy grail of marketing, is bound to come up. Is it really that difficult to determine the ROI of marketing spend? If you know how much you spent and how much you made out of a campaign, computing for MROI comes down to a basic math problem, right?
Most marketers will tell you, it’s not quite that simple. First, there is the question of attribution. A basic principle in marketing tells us that it takes about seven touches to prime a lead into action. With increased adoption of digital marketing, the number of potential touch points – from search engines and social media to marketplaces and review sites – increases almost beyond comprehension.
One common way to resolve attribution is the first touch/last touch methodology, or single attribution. With first touch, the marketer assigns revenue credit to the first marketing program that had contact. Let’s say, the company exhibits in a trade show. The lead comes by the booth and leaves a business card. A few months later, the deal is closed. In this case, point goes to the trade show.
Same goes for last touch attribution. For example, the lead is driven to the company’s website from a paid social ad. Right before conversion, the lead downloads a product brochure, avails of a free consultation, and then agrees to a free trial a week later. Here, even though the event would not have taken place had it not been for the paid ad, the sales executive who consulted with the lead gets the credit.
Beyond First Touch/Last Touch
The first touch/last touch method is commonly used because it is fairly easy and inexpensive to implement. First touch is especially popular among marketers that like to use lead forms, as it establishes which initial actions are most effective and deserve further investment. Last touch, however, is the default framework for many companies, as it can be set up easily, even on a CRM platform.
However, the methodology may not be the most accurate way to attribute credit for a sale, as it overly focuses on specific stages, when in reality, there can be multiple touches between the first and the last. Some might even say that single attribution is outdated or possibly inaccurate; in fact, the Mobile Marketing Association has gone on to claim that there is no real correlation between clickthrough rate and sales or other key marketing results.
There are a number of other models besides single attribution, and like first touch/last touch, there are advantages and disadvantages to each. To get an accurate measurement of your marketing investments, it might make sense to use several models simultaneously, to be able to determine which suits your needs best. Even better, you can automate it and generate an accurate attribution report for every lead, from entry to exit.
Digital Excellence understands the importance of accurate attribution for marketers and the impact it can have on your business, from organising your set-and-forget inbound platform to optimising your sales funnel. Talk to us about how we can help automate your critical marketing functions and maximise your revenues.