Not All Ads Are Created Equal: A Look Into Attribution Modeling
Attribution is a hot topic for today’s marketers, and James Green, CEO at Magnetic, is here to tell us why. Simply put, marketing attribution tracks user behavior before an online sale, so you know which channels played a role in a purchase. Below, James outlines some of the most popular attribution models so we know what’s available, and why some models are simply not ideal.
Marketers are spending their online advertising dollars across various channels like wildfire. And as brands rely more heavily on data as part of their media strategy, pressure is building to effectively measure ad campaign performance across channels.
At the heart of this transition is attribution. Attribution is simply the ability to evaluate the performance of each media channel, and this has become a hot topic as marketers search for answers. For example, where should a marketer invest? What targeting strategies work? Which ads are driving conversions? Is one channel more valuable than another?
There are several models and companies claiming to answer these questions. Here is an overview of the most popular attribution models, what you can hope to achieve, and the risks associated with each.
Post-Click or Last-Click Attribution
This model is based on the notion that the last advertising medium to persuade a consumer to click on an ad will receive credit for the entire sale. Search marketers tend to favor this model, and at first glance, it does appear to be the most logical. However, this model only considers one data point and does not consider a product’s longer-term building of awareness and interest, or the evaluation process that a consumer goes through across multiple media channels.
According to the post-view model, the last channel to show a person an ad leading up to the sale is the channel that receives credit. This model is even less accurate than the post-click model, as it assumes that every ad served to a consumer was actually seen. In addition, it encourages media partners to plaster ads as widespread as possible in order to take credit for the conversion, even if a consumer doesn’t actually see the ad.
A step in the right direction is equal attribution. This model is a form of post-view and assigns equal value to every single ad placement. The risk associated with this model is that it assumes that all ads are created equal. Branding campaigns are typically more likely to utilize this model, as it focuses on reach and frequency, over specific types of metrics.
Fractional attribution is probably the best solution available. However, it’s necessary to work with an attribution vendor in order to effectively measure fractional attribution. Many vendors offering fractional attribution indicate how much duplication is occurring between channels, which helps brands remove repetitive media partners who are not adding value. By highlighting media duplication, it’s possible to observe just how far down the sales funnel each media partner is performing.
Fractional attribution is the most accurate model available today, and is as close as we can get to practicing attribution across the consumer funnel. In an ideal world, every brand would choose this approach because it assigns values throughout different stages of a consumer’s experience, providing deep insights into the role that each ad and channel plays.
Not all ads are created equal, and as spending increases across multiple mediums, brands should begin to zero in on the impact that each ad has on creating awareness, influencing brand preference, and driving the desired outcome. The trickiness lies in the fact that all companies have different goals when it comes to advertising and whom they are trying to reach. As a result, all attribution funnels are measured differently. Figuring out an attribution model that works across all media is the real nirvana.
James Green joined search retargeting leader Magnetic in October 2011 as Chief Executive Officer charged with driving overall company expansion and building out Magnetic’s search retargeting infrastructure.
Mr. Green began his career in the entertainment industry and spent eight years with The Walt Disney Company culminating in his appointment as the General Manager of the Japanese market. From Disney, Mr. Green moved to Pixar Animation Studios where he worked for Steve Jobs as the VP of marketing and new business development. In 1998, Mr. Green became a founding partner and CEO of Sabela Media, an Internet ad serving company. After an explosive 18 months of revenue growth, Sabela Media sold for $70 million to 24/7 Real Media where Mr. Green served as president of technology solutions. In October 2000, Mr. Green became CEO of GiantBear, where he successfully launched new products with major carriers (Cingular, Rogers AT&T and others), before selling the business to InfoSpace in March 2002. After GiantBear, Mr. Green became CEO of PVI, a virtual advertising company, which he took private in 2003 before it was sold to Cablevison in May of 2005. Mr. Green then joined Giant Realm, a vertical ad network, as CEO in January 2007 and sold the company to Burst Media in October 2010.
From 2010 until joining Magnetic, Mr. Green fulfilled his lifelong dream of traveling around the world on his sailboat with his wife and two children. He documented the trip at www.SailingOndine.com. James lives in New York City.