The attribution solutions offered by many digital marketing tools leaves marketers without a clear view of all factors influencing consumer decisions. Nikki Retallick says its time for multi-touch attribution to blend with traditional marketing mix modelling to provide a more comprehensive view of marketing effectiveness.
Today's increasingly connected, multi-device world has made once reliable marketing performance measurement tools clumsy and outdated. They lack the granularity to show consumer choice at an individual level. For far too long, marketers have battled to understand which elements of their marketing mix delivers the greatest return on investment. Standard digital measurement practices — usually last touch — give credit to ad exposures that have little to no influence on a consumer's purchase decision.
But multichannel attribution gives us a much more accurate view of the individuals that respond to our marketing and ultimately buy our products. So, how come more brands aren't taking full advantage of this type of insight?
An eMarketer report published earlier this month stated that only minorities of US companies are using more advanced attribution models that give credit to each touch point along the conversion path. An alarming 57% are still using simplistic models, like first or last touch and I would estimate that in Australia this figure is even higher.
CMOs have used marketing mix modelling since the eighties to determine expected returns based on how they spend their money. It helped enormously with the top down, big picture stuff, like annual budgeting and the optimisation of media channels. It not only factored in sales and promotions, but also the non-marketing influences, such as socio-economic and environmental factors. Digital channel attribution on the otherhand has provided the bottom up, sub-channel, tactical-level insights that just weren’t achievable with older-style media. It helps track the customer journey across multiple devices, navigating often-unpredictable consumer behaviour.
Ultimately, both these models are trying to do the same thing - determine how marketing impacts consumers' responses. But they both have their shortcomings and, due to such different methodologies, they don’t work together to help marketers arrive at the source of the truth. Marketers need a cohesive, comprehensive, continuous analytic solution that provides both high-level strategic planning, as well as prescriptive, actionable recommendations at a timely, tactical execution level – a bridge between the tried and true (albeit broad) measurement through marketing mix modelling, and the data-driven, highly accurate (but in the weeds) measurement through multi-touch attribution.
Forrester has predicted that by 2016, marketing mix and attribution approaches will blend together, using the different statistical methodologies to measure and optimise single interactions. Most vendors in the market are developing solutions to connect the two models -- moving from marketing mix modelling + multi-touch attribution - to a unified model with just one set of rules, or one maths equation if you prefer.
Forrester refers to this as Unified Marketing Impact Analytics (uMIa): “A blend of statistical techniques that assigns business value to each element of the marketing mix at both a strategic and tactical level.”
The approach gets marketers close to the single source of truth. As Forrester defines it: “The ability to measure across all channels, and develop complex analyses, including cross-channel effects, customer paths, and building budget scenarios. The integration of online and offline data, to measure short and long term goals, gives marketers both allocation and planning capabilities in one tool.”
UMIa is an important development for the marketing industry. Those who continue to attempt to marry the two approaches by more arbitrary means will ultimately lose out, with suboptimal campaigns, lower conversion rates and less efficient workflows.
Ultimately, a unified model brings confidence that you can drive more business and better returns with efficient marketing choices. More to the point, this unified approach makes the customer the centre of focus and allows a deeper understanding of how marketing truly influences behaviour.