Attribution, why it’s flawed and you shouldn’t use it
Humans like to categorize things to help make sense of the world. When talking about marketing, attribution is a trap that marketers fall into. On the surface attribution makes sense when explained, but when you dig deeper you see how it hurts marketing programs and the bottom line for both marketers and publishers.
I’m no marketing historian, so I can’t tell you where the concept of marketing attribution starting popping up. I can tell you it it is becoming more pervasive each and every day in the world of digital marketing in particular. Attribution needs to go. It doesn’t align with business goals and successful relationships between marketers and publishers. Let’s examine it a little more.
I’m calling marketing based on a CPM (cost per mille) billing model, brand marketing. Essentially, a brand buys inventory at an agreed upon price (either ahead of time or in real-time based on programmatic bidding) and then agrees to pay for it, regardless of the outcome. Digital marketing has transformed quickly on the timeline of marketing evolution. In the “early” days everyone was paying a CPM, a billing mechanism that was familiar from the days of print advertising. Publishing on the web grew and as a result digital advertising exploded in popularity and scale. Savvy marketers, especially those rooted in direct response are used to measuring everything. Digital became more prevalent and yet it wasn’t measured in the way that it could be. This got people talking.
The Rise of Performance Marketing
Very quickly marketers started pulling the biggest con on digital publishers. They convinced publishers that digital advertising couldn’t possibly work and if it did work, they’d have to show it through measurement and metrics.
Advertising technology was born out of the need to manage scale, relationships and the desire to track performance for the most trackable medium and channel that has ever existed. Marketers convinced technologists with little marketing background that performance media is a thing, shifting the onus of responsibility onto the vendor instead of being a hand in hand partnership. The majority of vendors, whether they be ad networks, demand side platforms, supply side platforms, exchanges (they are all ad networks with different flavors of marketing and clients) failed to come up with solutions to proving out that digital marketing works and are now stuck with the burden of digital marketing’s history of how things are done.
For publishers lucky enough to attract CPM relationships, the hope is some sort of post view conversion attributed to their inventory. Publishers, not wanting to lose customers and therefore large amounts of revenue were very quickly duped into signing agreements based on performance marketing, metrics predicated on clicks (CPC) or actions such as conversions (CPA). Performance marketing agreements are very clear signals of a tenuous relationship and one where the marketer is saying they don’t believe in a publisher’s value or ability to attract an audience that aligns with the customers they are after.
Let’s be clear, no one clicks on ads, and even the highest of conversion rates is a low percentage number. As a publisher, allowing for performance marketing puts all of the risk on you where you give up valuable real estate, and strategically build content around the ad placements with the hope that someone will click on an ad (intentionally or mistakenly). This isn’t a winning business plan.
Attribution, The Accountant’s Nightmare
If you’re a brand, the deal you’re getting through performance marketing feels pretty good. You’re only paying for clicks or conversions and aren’t taking on the monetary risk of a CPM based media buy. Anyone looking at this type of relationship between a buyer and seller would have a few questions in their head about how this plays out in real life. One key constituent is the accountant.
The Brand Accountant
On the surface, this relationships seems great, in reality, beads of sweat and fits of frustration are seen on any accountant’s face having to deal with billing. If you’re like most marketers, you aren’t putting all of your eggs in one basket with respect to supply partnerships and where you run your ads. After all you need reach and are convinced that digital marketing doesn’t really work right? This creates a tough situation.
First of all, accounting for clicks is straightforward.
- If I pay ten cents per click with Publisher A and I get thirty clicks on my ad, I owe Publisher A $3.00. As a marketer you are also running ads on Publisher B and Publisher C.
- If publisher B charges five cents per click and you get twenty clicks, you owe $1.00.
- Publisher C charges twenty cents per click and you also get 10 clicks. You owe $2.00.
Let’s say these publishers are news sites. Presumably there is some overlap with the audiences. You may or may not be double-paying for clicks from the same person on two different sites. You’re OK either way, but do you know? Furthermore, if you look at the cost per click alone, your accountant is probably asking you for cheaper clicks. They’re all the same right?
The likelihood of someone clicking on an ad and converting right away is very low. This is why we have lookback or conversion windows. Yay, plus one for publishers here. This presents a not so straightforward challenge. If I as a consumer click on two ads, the first one on Publisher A and the second one on Publisher C, and then subsequently convert during the lookback window, who gets credit. Who do I attribute the conversion to? Anyone in adops at brands that “buy into” attribution will want to optimize spend toward the publisher that generates the most conversions. If we are paying a CPA this question is of even greater concern. The accountant doesn’t want to pay twice especially if you are paying a commission as in affiliate marketing. The economics of the deal are even harder to swallow when you pay twice. Imagine paying three times or more? This leads to a problem for publishers.
The Publisher Accountant
On a regular basis, publishers reconcile with their demand sources. Imagine the accountant’s dismay when they look at their earned revenue on the income statement and then learn through the reconciliation that a third of their revenue is now gone as a result of attribution based on rules such as “first click” or “last click” or “fractional” attribution. In the accountant’s mind and the publisher as a whole, they provided valuable real estate for the marketer to display a message about a product or service. The real estate is ephemeral and once that pageview is gone, the real estate and revenue opportunity is gone forever. Ultimately a number of consumers converted as a result of relevant messaging and now the publisher is being told that they won’t get credit for some of their value. It’s a raw deal. It’s no wonder why there can be a contentious relationship between a marketer and a publisher.
Optimization and Attribution
As we step away from the accounting nightmare that attribution creates, we can look at campaign and program optimization. I can’t tell you how many times I’ve been witness to what should be a crime against marketing when I see or overhear someone talking about optimizing campaign performance based on click through rate or their attribution metrics.
What exactly is campaign performance anyway? Before you answer, consider that a campaign is part of a marketing program. That marketing program is about creating and maintaining a relationships with a consumer, and hopefully a profitable one. If we start removing supply partners that don’t perform we are also negatively impacting our conversions and reach.
CPM campaigns are not immune to this either. While attribution started off as a way to make sense of billing it has sneaked its way into brand marketing. This sort of attribution optimization presents a myopic point of view. Publishers don’t’ generate conversions, marketers do. Don’t be fooled, everything is brand marketing and attribution is merely a way to make marketing decisions with little effort on the behalf of the brand.
What Can a Marketer Do?
Take a step back and consider what a marketing program is. A program is a mix of campaigns across partner relationships. The goal is to effectively and efficiently reach a large group of consumers, either existing customers or new ones a marketer wishes to acquire. For any marketer, that’s the job. Let that sink in.
A brand needs a cohesive message to consumers. Part of that messaging should factor in frequency and return across relationships. If I see a message on two publishers, and then convert, I was affected by both messages, not just the one which attribution strives to optimize for.
Attribution is for accountants, not for performance and revenue optimization. To understand performance we need to look at messaging over time at the person level. Publishers can be compared for reach and overlap while performance is measured through lift and engagement metrics gathered through standard test and control.
Marketers should take a stake in their programs and buy media based on a CPM. The CPM should be based on the ROI of the program and the potential for that consumer to convert. This is dynamic people-based marketing. In this way, publishers will get value for their inventory and decisions around marketing performance are based on the consumer, not the piece of content they are view on a particular publisher at a point in time.
I previously mentioned that publishers don’t generate conversions, marketers do. Publishers have no control over poorly designed creative or marketer web sites. Conversion rates are solely the responsibility marketers. Publishers provide an audience. This is true whether online or through TV and radio and yet digital publishers are held to a different standard simply because twenty years after the first banner ad was displayed, we aren’t sure if digital marketing works yet. Marketers don’t need attribution, they need marketing platforms that are aligned with their goals and that can deliver on them based on the metrics of success. The platforms should be held accountable, not the conduits for their ad placements.
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Originally published at Market Intelligently.