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A Vision Becomes a Trend: Conversion Attribution 2013

As the new year is still young we look back on what made the headlines in the media press in the past year and what excited the likes of advertisers, agencies, publishers, researchers and beyond.
In this blog post we aim to provide relevant predictions for the 2013 with regard to conversion attribution and how it will increasingly play a key role in the marketer’s working life.

 

Conversion attribution takes planning but reaps rewards for advertisers, not least in terms of revenue

Conversion attribution takes planning but reaps rewards for advertisers, not least in terms of revenue


Holistic conversion attribution

It can be said with authority that knowledgeable advertisers do not solely rely on the “last-cookie-wins” or last-click model anymore to determine their online marketing channels’ efficiency and worth. They increasingly turn to alternative attribution models to determine the effectiveness of their campaigns, a trend which is likely to grow in 2013. The numerous alternatives, such as the first-cookie-wins scenario or the uniformly distributed attribution method, being very efficient, also increasingly attract budget-conscious advertisers.

When using alternative attribution models, the challenge is not to evaluate the order of the touch points with the advertising mediums in a differentiated way. The difficulty rather lies in developing a model that can holistically allocate the online budget, allowing a high level of effectiveness and efficiency in the long run. In 2012 a standard recipe for this was not discovered, however, market participants have acknowledged that the touch point order cannot be generally determined by a formula and that more specific criteria must also be taken into account when allocating a campaign budget.

In 2013 agencies and advertisers will need to work closely together to create suitable and individually-successful models. The knowledge-sharing element will be crucial, as developing a holistic method will be reliant on self-evaluation and the honest examination of attribution processes. Marketing history has taught us that similar developments in offline advertising modeling benefited from the development of a static model to evaluate advertising measures: regression analysis.

Include conventional advertising channels into the conversion attribution

It is no secret, that on their way to a conversion (purchase, conclusion of sale, etc.), consumers do not only use online-channels, even though in the end they increasingly purchase their products online. On the one hand it can be assumed that when users research a product online they use different device types including laptops, PCs, smart phones, tablets, etc. On the other hand they will also always come into contact with conventional advertising channels such as TV or magazines in order to further inform themselves on products and services.

The classic conversion attribution can only display interactions through one device. Consequently, device changes and cross-channel effects between online and offline mediums cannot be reproduced. Although it is possible to track activities on digital devices, you cannot attribute a conversion to all online- and offline channels. However, it is necessary to holistically allocate the budget to incorporate all channels. Currently this is done with modelling, which originated from classic media planning. Nevertheless, consideration should be given to how conversion attribution can be combined with a modeling approach. In 2013 new approaches will be developed to solve this problem and to guarantee a holistic evaluation of all media channels. Here as well, advertisers and agencies will need to work closer together and jointly tackle this issue.

Include the customer value into the conversion attribution

When evaluating the budget allocation, companies mainly focus on marketing channels, but it is highly recommended to also evaluate the customer and to determine the “customer lifetime value” (CLV). The CLV represents the profit or loss a company makes through the transactions with a customer throughout the entire customer relationship. Even before evaluating one’s marketing channels, companies should have a close look at their customers and identify those channels that attract valuable customers. This knowledge provides an excellent basis for the allocation of online budgets.
Furthermore, it is possible to include the so-called ‘customer scoring’ into your individual conversion attribution. This approach allows a shift in budgets to highly lucrative channels. This means, spending is no longer distributed based on finalized customer transactions, but rather includes the customer value resulting from each transaction.

Including the CLV into budget considerations is important for advertisers, since intelligently distributing advertising funds (taking also into account the customer and marketing channels) offers an enormous revenue boost potential and risk reduction. In the spirit of pooling resources in 2013 to arrive at more successful outcomes, advertisers are encouraged to share their customer scoring strategy with their agency, so that the latter can effectively develop the right evaluation strategy, based upon agreed metrics.

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1 Comment

  1. […] blog gönderimizde 2013’teki dönüşüm elde etmenin(conversion attribution) zorluklarından bahsetmiştik. Bu […]


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