Measuring Digital Attribution Outside of a Silo and Within the Context of the Customer’s World

By Nigel Foote

MarBeyond the Silo of Digital Attributionketers have sought to understand the impact of all the elements of marketing on revenue and profit — in other words, to properly attribute the contribution of incremental revenue that each tactic delivers. For years, commercial effectiveness analytics and marketing mix modeling fulfilled this function, but as marketing tactics have gone digital the need to understand how they impact customers as well as properly attribute their effects has become increasingly important.

Today there are many “bright and shiny new objects” in the digital attribution space that offer solutions to understanding the impact to digital. Unfortunately, many if not most fail to look at digital through a customer’s lens. This creates a real danger of looking at effectiveness in a digital “silo” removed from the context in which customers really make purchase decisions.

Digital attribution is one part of the evaluation process … but on its own it’s not enough.

For companies seeking to make digital buys on a near real-time basis, digital attribution is of course very important. However, digital media still forms a minority of marketing spend. From working with hundreds of Fortune 500 companies we know that it’s critically dependent on upper funnel activities to drive response. Collectively, online and offline marketing spend optimization form just a part of commercial effectiveness — analytics that holistically evaluate the impact of business investment, econometrics and the environment.

The danger of relying exclusively on siloed approaches to attribution is that they treat digital channels and tactics as if they are solely responsible for the purchase decision. Both business and common sense tell you with absolute certainty that isn’t the case.

To truly transform business performance from marketing you need to adopt a holistic approach that determines the impact of commercial drivers across the enterprise AND the macro economic effects that buffet the business in the real world, as it’s the combined effects of these things that drive consumer decisions.

Siloed digital attribution platforms struggle to accurately reflect the complete business ecosystem, as they often don’t incorporate offline marketing and sponsorships (non-traceable), operational factors and critical external factors such as weather or the economy. Therefore, these approaches should not be used for ROI measurement or financial reporting, as both require a comprehensive accounting for all business drivers. Rather, the focus should remain on granular digital campaign optimization on a near real-time basis.

The right approach to online and offline attribution is to work from both the top-down and the bottom-up and at the most granular levels possible, within the context of all the other commercial activities. This produces a properly attributed read on investments, capturing the synergies and real impacts of digital within the investment ecosystem.

This is Full Customer Attribution — the complete net attribution analysis across both digital and offline channels while taking into account Operational and Macroeconomic factors at the individual customer level, giving the complete view of commercial effectiveness across the enterprise.

The Need to Go Beyond the Silos

Companies need to understand how to holistically understand the value of and optimize organizational investments in order to maximize their ROI. This includes maximizing the effectiveness of current investments while optimizing the impact and return on the “next dollar spent” across the organization.

Too often organizations are not connecting the dots between marketing, other core business contributors (products, sales, operations, pricing, etc.), environmental and economic factors and digital attribution. It’s a problem created by focusing departmentally on only one of the core levers. By looking at how customers really make purchasing decisions, their drivers and barriers, then by integrating the approaches, marketers can break through the silos too often identified with siloed digital attribution tools. An effective and impactful digital attribution practice builds out a breakthrough combination of rich, data-based analytics and value-creating consulting that transforms commercial performance — solving digital, social and cross-channel measurement and optimization challenges at the campaign, placement, timing and device level.

Marketing mix and digital attribution, whether online or offline, is part of overall Commercial Effectiveness, which seeks to identify and attribute the proper ROIs and synergies across the holistic set of investments a company is making.

An example is useful here. A major retailer was experiencing significant declines in sales and traffic and couldn’t figure out why. Their content and new media (both digital and offline) had tested well: Their assortment was new and exciting as a result of a recent influx of new products. After analysis, it turned out their declines had nothing to do with marketing and everything to do with recent changes they had made in the headcount reduction of experienced managers, coupled with poor on-boarding training of new sales associates. Once the impact of these changes were identified and understood the retailer was able to address them. As a result of the changes, customer satisfaction improved, sales and traffic increased and the media that had tested at such high levels indeed was able to drive the traffic that had been projected. Without incorporating the effects of operations into the evaluation, this retailer would never have identified the real problem and might have misattributed the declines to something that they had nothing to do with.

By evaluating a holistic set of variables, marketers can get an accurate, actionable view of digital and offline attribution enabling both top-down and bottom-up business and marketing optimization to drive gains in marketing performance (incremental revenue and profit driven by marketing) in the range of 20-30%.

Think Customers, Not Just Cookies

With attribution, it’s important to collect and integrate data at the greatest level of granularity possible. For digital channels, this is at the event and cookie level, whereas for offline channels it might be at a more aggregate level. One of the breakthroughs is the ability to on-board data from a client’s own CRM databases, which can provide a “bridge” enabling modeling at the customer level. Most brands have a rich CRM database with data such as contact information and purchase history. That data is a core tool for marketing campaigns. For example, when a customer purchases at a store, they may be encouraged to register for a loyalty program. Every time a loyalty program member buys a product, the purchase is logged into the company’s CRM system. Integrating the CRM data via on-boarding effectively links customer level data (postal addresses/emails) to digital events.

This adds a completely different perspective to customer-level attribution, as we can now focus on customers, not just cookies or mobile device IDs when looking at digital events. This enables the attribution approach to work on a single customer view, significantly enriching the targeting that can be done.

Long-Term Brand Effects

We’ve discussed the importance of the context of overall commercial activities, but it’s also important for the attribution approach to enable the consideration of long-term effects alongside the short-term (or very short-term) impact of tactics.

A global luxury apparel retailer came to us with this specific dilemma: How can they tie sales effectiveness to the whole range of marketing activity they are doing, much of which (long term OOH, magazines or events) are specifically used to drive long term brand advantage not just short-term sales? So here we’re not just unifying digital attribution with cross-channel effects across all offline tactics and operational factors, but looking way beyond the usually 13-week horizon for short-term marketing effects. Using the client’s continuous brand tracking data allowed us to produce response curves for all tactics at both the short-term and the long-term level while also ensuring that we captured the halo and cross-channel effects between all their tactics. By doing this it enabled the client to significantly improve their optimization of media and marketing as well as how they planned brand communications from a weekly to a three-year horizon. In one year it delivered over $50 million in incremental value from better cross-channel and cross-campaign optimization.

Not every client has this level of Brand Equity tracking, of course, but nearly all have invested in tracking social media mentions or buzz. Working alongside our Ipsos Group colleagues at Ipsos Connect and Ipsos SMX we are able to determine long-term ROI through modeling social media tracking within the analytic framework across all channels.

Bringing It All Together

Software-as-a-service digital attribution tools too often focus solely on digital results vs. integrating other material marketing, sales, operations and economic influencers. As a result, the output from such tools often simply doesn’t make sense as they don’t incorporate relevant interactions that help shape actual results and ROIs.

The right approach to in-depth attribution requires the right combination of people and platforms. The Full Customer Attribution approach combines software analytics platforms with in-depth consulting to assist companies in understanding how to integrate and action the findings. In the end, the metrics are simple and clear. All of this effort needs to lead to real and measurable value in the form of sales, profit and shareholder value.