09 Jan A Beginner’s Guide To Marketing Attribution – Part One
Attribution, What is it?
In the context of digital marketing, attribution is a math problem for assigning recognition of an outcome to an action. For marketers in a B2B context, the outcome is probably a lead and the action is the marketing channel that led to conversion.
The purposes of marketing attribution and corresponding analysis are to understand the contribution marketing actions make to an end-goal, to optimize the overall marketing mix and to make better decisions – like lowering the cost of acquisition for increased efficiency.
Attribution is complex and sophisticated. With an entire industry dedicated to understanding and managing its nuance. It also assumes your marketing systems are integrated, validated and accurate. It will take time to put all the pieces together, build your framework, gather data, analyze results and understand how everything fits together. Do not despair. Attribution is a journey, not an event.
Marketing attribution is complex and warrants a broad framework to keep things organized. Identify a goal then build out a system to track and evaluate performance. In our example of a B2B startup, we’ll focus on leads and look at a simple framework to illustrate. The goal can be abstract like “demand” or concrete like new customers. Just make sure the business is aligned internally so everyone is working with the same definition.
We’ll define a “lead” as someone who’s successfully completed a conversion event and been added to the Customer Relationship Management Database (CRM). Our framework is derived from the marketing funnel and includes metrics, by online and offline channels:
- Click through rate (CTR)
- Cost per click (CPC)
- Website traffic (users)
- New website traffic (new users)
- Conversion Rate (CVR)
- Cost per lead (CPL)
An example dashboard might look like:
- Marketing actions are executed digitally and physically. Not everything can be tracked and there will be gaps.
- Each marketing channel has its own optimization framework. A high-level look should include metrics that apply to the most possible tactics.
- Don’t be surprised if data has large variances at the start. It will improve over time.
- It’s important to understand the nuance of each marketing channel – its purpose, how it contributes to a complete marketing funnel, how it influences other channels. Some marketing channels must be evaluated in relation to overall strategy rather than pure numbers.
- For many companies “SEO” is categorized as “unpaid.” However, since there’s often outside help (agencies or freelancers) we prefer to place it under “paid” to account for necessary fees and to calculate a more correct cost per lead.
The dashboard contains the number of leads (the goal) generated by each marketing channel. This is attribution. In this table, referral traffic brought one lead, SEO had 202, SEM Non-Brand 121, etc.
And, because spending is tracked too, each marketing channel has a “cost per” number that illustrates the overall efficiency relative to the goal.
Congratulations, you’ve completed your first attribution exercise and answered the questions: what channels are generating leads, how many and at what cost? Pat yourself on the back.
What does it all mean?
This is where things begin to get complicated. Looking at the above data, a few questions stand out:
- Does this mean we’re done with attribution?
- Where did the data come from? Can it be trusted?
- Some channels are really efficient and others definitely not. Should we put our entire investment into the most efficient channels and stop everything else?
Does this mean we’re done with attribution?
Both marketing engines (like Google Ads) and analytics platforms (Google Analytics, Omniture) have free attribution tools available. However, without action the systems are not aligned or defined. To be useful, a number of fundamental questions must be answered by the business team and the tools must be programmed to reflect those decisions.
The complexity and nuance of attribution mean there’s rarely a point where it’s “complete.” It’s a continual process of learning, iteration, analysis and improvement. Further, slicing and dicing data always leads to new questions.
Where did the data come from? Can it be trusted?
Data sourcing is interesting because systems record behavior and actions differently. The result is cross-platform inconsistency and, even after platforms are integrated, validated and deemed “accurate,” you’ll find variance between expected and actual results. This is normal behavior. Systems record and share data in different ways. Plus, there’s a natural drop off as users move down the funnel like when user clicks an ad but closes the window before the analytics tag fires to record the visit.
Below is the earlier table with data sources in place of numbers:
Notice the leads column says “CRM or Analytics.” Certain metrics are recorded in multiple systems so you need to choose which to use. Which you choose is less important than making sure you always use the same one. This consistency ensures you’re always comparing apples to apples and simplifies troubleshooting when necessary.
Also note this is simplified to highlight paid channels. Non-paid marketing tactics like email do have “impressions” (sends), clicks and CTR but, outside of cost accounting, no CPC, cost or CPL. Same for organic social and others.
Some channels are really efficient and others definitely not. Should we put our entire investment into the most efficient channels and drop everything else?
That’s expected and no, don’t drop everything else; each marketing channel serves a different purpose and functions at different levels of the funnel. Marketing actions support one another sometimes in hidden ways. The deeper realization of attribution is quantifying each channel’s contribution to an action to understand the total effectiveness of a marketing program.
For example – display and video are two of the most inefficient marketing channels on a direct cost/per lead basis. Does that mean they should be ignored? Definitely not! Conversion is not their purpose. They are awareness vehicles – designed to fill the top of the funnel – and support conversion (leads) by generating awareness (demand).
As part of a complete marketing program, inefficiencies in one channel are balanced by hyper-efficiencies in others. They work in concert. As a program develops, individual channel goals can be divined. (More later but note: analytics suites usually include a “multi-touch attribution” tool that captures all channels that led to a conversion. Display and video are generally found in the early part of this journey and often get zero credit.)
To answer the question: No, don’t jettison all but the most efficient activities because you’ll end up missing a lot of opportunity. Over time, you’ll quantifiably evaluate each channel’s impact and make decisions on where to invest. Endeavor to understand the purpose of each channel, monitor its performance, measure its impact and understand how they work together. Soon, you’ll uncover how seemingly unrelated things (PR and organic search; video and social; paid search and banners) do, in fact, work together.
Whew, that’s a lot. Now that we’ve gone through the foundations of attribution, let’s take a breather before continuing. When you’re ready, come back for the real nitty gritty in Part 2 of A Beginner’s Guide To Marketing Attribution.
Or, if you’re the impatient binge-reading sort, download the full 3-part series as a single pdf here.
Marketing dynamo with particular expertise in making things happen and putting it all together. Formerly ran demand generation for an AI/digital workplace startup, acquisition for a FinTech company, plus acquisition/retention for a large etailer.