You’ve launched your new campaign and everyone loves it. They think the quality of the blog articles is great; you’re generating new leads and getting high-fives around the office. Congratulations, it’s nice to feel like a hero. That is until you get the inevitable request from your CEO: “I need you to cut your budget by 20% for next year”.
Ok, you’re a team player. You’re willing to find a way to make it work. But what should you cut, what programs can you afford to stop and still deliver results for your company?
A need for measurement
Sadly, for a lot of marketers this may be left to a guess or hunch. According to a survey of more than 4,000 marketers conducted by Duke University’s Fuqua School of Business along with McKinsey & Company and the American Marketing Association, more than 40% of companies either do not measure ROI at all or only use manager judgments to make these important decisions.
More than 40% of companies are not objectively measuring ROI.
Source: The CMO Survey – Duke University, Fuqua School of Business
What you need to know
To start, you need to be measuring your marketing activities not only in aggregate (like how many opens and clicks you got), but also at the individual contact level (who opened, viewed, clicked etc.).
Most tools that marketers use today can already give you much of this information. Email tools can tell you who did or did not click on your emails. Marketing automation systems will tell who has been on your site and which pages they’ve viewed. CRM systems tell which prospects your sales team has contacted, which have purchased and what was the revenue.
If you’re using an integrated marketing tool like HubSpot, this information is all in one place. However, even if you’re using other tools, you can pull the information together using nothing more than some advanced excel sheets and a few pivot tables.
Now that you have the information, you can start to make smart decisions about your marketing channels using one of the following attribution models.
A beginners guide to using marketing attribution
What is it and how can use it calculate ROI of your marketing channels?
An attribution model is a way to assign credit or value for how important each of your marketing activities are to the ultimate conversion. It gives you a method to measure ROI not just of the entire marketing program but also to individual components of your program.
Let’s say you acquired a new customer this month. It’s been a six-month process to bring them through the sales cycle and successfully close the business. During this time they’ve had a number of marketing touches or engagements.
- They used an organic search to visit to one of your blog articles
- They signed up for your blog by email and clicked on the monthly email
- Next they clicked on your “Visit Us At the Show & Win” display banner on a conference website where you are exhibiting
- They responded to your email invitation and registered for one of your webinars
- They visited your pricing page after the webinar and requested a product demo
How you decide which of these marketing activities get credit (and thus ROI) for the sale will depend on which attribution method you chose.
First Touch Attribution
What was the first contact point that brought the visitor to your website? In our example, the first time saw this new customers was on your blog. If you were using First Touch Attribution, your blogging efforts would get 100% of the credit for the sale.
First Touch can be the right attribution model when your brand has very low awareness and the majority of your marketing efforts are centered on trying to build that awareness.
Last Touch Attribution
If you use last touch, your website would get 100% of the credit for the sale.
Last Touch is by default what most marketers use, however. it can be dangerous as it may cause you to give too much credit to the last interaction. That said, it can have a place when your marketing has limited touch points and that tend to be very spread out.
First & Last Touch
This method gives credit to the first and last engagement before conversion. In our example, the blog would get 50% and the pricing pages would get 50% of the credit.
First & Last Attribution is a bit of a hybrid in that it rewards both the initial awareness acquisition and the important final conversion from research to consideration. This is a good fit for a lot of content marketing campaigns.
Linear (all touches)
With a linear attribution model, each touch is treated as equally responsible for the sale and thus would receive a part of the credit. For our example that would look like the following.
Linear Attribution is the right model when your focus in on maintaining engagement over a long sales cycle and all of the touch points are designed to work together as one campaign.
Simple Time Decay
This method gives a declining value with the newest engagement getting the most, and the oldest the least. In our example, it would look something like the following.
Simple Time Decay is the right model if your conversion cycle is relatively short. For example, you are running a campaign with very time sensitive incentive. In this case you care most about the recent activity and less about older activity.
Now, the biggest question you have to decide is which model is right for your business? Some of this choice should come down to who is your customer and how difficult is it to engage them. You also should be a realist on your current analytics tools and your ability to manage the analysis. If this seems daunting, try by starting with the First & Last Touch method as this can give you the most insight with the least complexity on analytics.