This article originally ran on ClickZ.com on May 8, 2009. But it remains highly current, given the debate about last click attribution which continues to rage in the online marketing industry.
At Penton’s Annual Conference for Catalog and Multichannel Merchants, a key focus — as one might expect — was on direct response metrics for catalog merchants. After making a presentation during the panel, “Achieving And Measuring Search Marketing ROI In Paid Search,” I was pleasantly surprised to learn the audience was interested in understanding the bigger picture in PPC search, not just the final touch point before the sale.
If you’ve been toying with the idea of employing a full-scale online and offline media mix model, online media engagement mapping, or simply de-duping the true last touch point (reconciling your tracking sources to determine which one really saw or touched the customer last), you need to determine what your reason is for engaging in the research and getting access to the data. Having the true last touch point allows you to better manage payouts to “performance marketing” vendors.”
The holy grail of advertising and marketing is a media mix model allowing the marketer to both understand the marginal impact of every media opportunity before the media dollars are allocated as well as to empower the marketer or agency to make media allocation decisions easily. Large marketers have done econometric marketing models in an attempt to best manage media dollars. Because search behavior is stimulated by offline media (both yours and your competition’s), you can build interesting models by including factors other than your own media (assuming you can get at this data).
In a time of shrinking marketing budgets, it’s imperative that every marketing dollar is spent as wisely as possible. It’s always been easier to track online media — especially the last touch point prior to online conversion — than other media.
Let’s assume that your organization, like most, has its online team operating in a silo and generally not getting credit for store sales or even inbound calls. In this instance, media allocation decisions may be being made by entirely different teams, making a full econometric or media mix model an unlikely event due both to internal structure and cost of such a model (generally they are well into the six-figure range if all the data that should go into the model is going into the model).
Under this scenario, the online marketing team is left to make media allocation decisions within online media, including only search, display, video, audio, mobile, and perhaps a new digitally delivered ad format, but probably not things like digital billboards or TiVo advertising. With the advent of retargeting display ad solutions and networks, some of which are willing to work on a performance basis, it becomes important to define exactly what, when, and why you’re willing to pay a particular media vendor running retargeted media.
This need to define the last click touch point alone has resulted in a need within reporting dashboards for a de-dupe report, which is less about attribution for the purposes of holistic media mix modeling and more about knowing how big of a check to write each performance media partner and when to hold back payments based on your agreed-upon definition of the last-click. Some contracts I’ve heard about even charge marketers (perhaps you).
In some cases, you may need to rethink your existing contracts because many of these contracts rely on a siloed data collection system and insist on rewarding a media click source regardless of whether this source was, in fact, the most proximal to the order. For example, online affiliate networks often define a payout requirement based on a post-click cookie being within a certain time period regardless of what happened during the duration of that cookie.
So how many times are you paying a full affiliate commission through Commission Junction, LinkShare, or the Google Affiliate network, a media commission to one or more vendors working on a “performance basis,” and attributing the click to the PPC search campaign in order to make a bidding decision about a specific keyword? No idea? You aren’t alone.
Even though only one click can be the last touch point, this may not relieve you of the legal obligation to pay more than one vendor. If your PPC search campaign was the last touch point but you’re paying others as well, you may be tempted to reduce your PPC budget or attribution.
Think about what happens then: you no longer have the top position that may have been instrumental in getting the sale. Cut payouts to vendors (or media opportunities) earlier in the buy funnel and you risk eliminating an important stimulus to the eventual search (the final search perhaps).
For every change you make to a contract, payout scheme, or media mix, there are repercussions. Use your de-dupe reports carefully, because there may be unintended consequences to some of the changes you’d like to make.