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Last-click Attribution: Classic case of mistaken identity

Since time immemorial, marketers have been plagued with one dilemma – determination of the advertising effort that helped move the needle. Sadly, even today, in the era of advanced digital marketing, results are often incorrectly attributed. Many e-commerce brands, for example, mistakenly credit the last click as the reason for their marketing success. Consequently, a whole lot of important questions remain unanswered – ‘When did the customer first become aware of the product?’, ‘What did they really do thereafter?’, ‘What convinced them to make a purchase?’

When marketers pay attention to just the final interaction made by the end-user preceding a purchase, they misjudge some of the more important brand engagement events along the marketing funnel. Last-click attribution is a myopic sales attribution which disregards a customer’s journey through the decision-making process. One ought to remember that a customer’s journey is nonlinear and involves a sequence of media impressions in which conversions very rarely occur on the first impression or the first click.  According to a Microsoft/Atlas study, ROI calculations disregard 93-95% of audience engagements with online advertising. Another recent study by Forrester shows that advertisers fail to look at a multi-channel impact that explains how retailers are missing out on valuable influencers along the purchase decision process.

So, what really is the best way to understand the customer behavior and attribute the sale correctly? To know what works and which marketing-mix functions best, we need to take a holistic view of the customer journey.

The AIDA model still works!

This weather-beaten model consists of a four stage process including Awareness, Interest, Desire/ Decision and, finally, Action. While more comprehensive customer engagement models have been crafted over time, the good old funnel works well to understand the basic purchasing behavior of consumers in an e-commerce environment.

While Bottom of the Funnel (BOFU) strategies are important to enable the customers to go the last mile and associate themselves with the Brand, excessive spending on BOFU tactics by attributing the conversion to the last click can “choke” the funnel and prevent marketing dollars from from being spent on activities that  can truly increase the number of people who are present at the bottom of the funnel and consequently, result in more conversions. Search is a great example of a channel that delivers excellent results but eventually plateaus out. It therefore becomes imperative to also invest in Top of the Funnel (TOFU) tactics to keep new customers interested in the Brand and to ensure a flow of customers through the funnel.

A multi-channel attribution model allows marketers to see all of the consumer touch points involved in the buying cycle. One of the more common methods is applying weighted values to each marketing tactic at each stage of the marketing funnel and tracking how each interaction contributes to a desired consumer action such as a lead, sale or download. Regression Analysis (or more advanced modeling techniques) can help assign an appropriate weightage to different touch points. The result is a holistic marketing plan that leverages TOFU and BOFU tactics in a healthy proportion to improve bottom line results in terms of both ROI and volume.

Bear in mind that collecting, analyzing, managing, and acting on this first-party and third-party data is a complex challenge in itself. A Data Management Platform (DMP) can be used to give a single, consolidated picture of the customer. Advertisers can then analyze this data to determine the combination of channels and types/order of messaging that best convinces a customer to buy from the advertiser.

It’s not always the last click

The bottomline is that e-commerce brands (and other performance-focused advertisers) need to continuously improvise and measure the value created by their advertising channels. A failure in doing so will lead to incorrect marketing budget allocation. While various marketing efforts help build awareness, consideration and intent, the last interaction/BOFU channels give the last point of contact prior to a purchase and are often incorrectly awarded the credit. By looking at interactions across digital channels, including clicks from paid and organic searches, affiliates, social networks and display ads, performance based advertisers can see how channels work together to create conversions.

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