There’s an old saying in advertising: “Half the money I spend on advertising is wasted… the trouble is, I don’t know which half.”
This old chestnut has been under attack since the advent of internet-based marketing. Typically, in marketing, it’s hard to tell what works and what doesn’t. Your marketing team does a lot of stuff and spends a lot of money – but where is all that money going? Which campaigns are creating opportunities and influencing deals, and which are using up resources with no ROI?
The tracking of end-user behavior and analytics has made these questions increasingly answerable.
And at the end of the day, these campaigns (like most things in your business) are about bookings and revenue. As CEO, you want to know which campaigns are helping grow your business and which are not. This is where marketing attribution comes in.
What is marketing attribution?
Marketing attribution is a way to assign value to each campaign that played a role in influencing a lead to eventually make a purchase.
For example, if a person is first introduced to your brand when he finds a blog post from an organic search, then later returns to your site and downloads an eBook, and then eventually buys after watching a webinar… which campaign should be credited?
You shouldn’t assign 100% of the purchase order to the last-touch campaign. Different marketing campaigns are designed for different stages in the sales process, and giving the last-touch campaign full credit leaves out those top-of-the-funnel campaigns that beckoned the buyer into and through the cycle.
Instead, you should accredit certain percentages of the purchase order to every campaign the buyer touched before buying.
Source: “Data Driven Multi-Touch Attribution Models” by Xuhio Shao & Lexin Li
The percentages are up to your company. If a customer buys for $8k and touched 4 campaigns before buying, you could choose to:
Give proportional credit to each campaign depending on how far away it was from the purchase point: 10% ($800 credit) to the first-touch campaign, 20% ($1,600) to the second campaign, 30% ($2,400) to the third campaign, and 40% ($3,200) to the last-touch campaign.
Give equal credit to each campaign (20% or $1,600 of credit each).
Give 100% credit to every campaign (100% or $8,000 of credit each). It’s like saying about each campaign, “this campaign influenced $8k in bookings.” We use this method at InsightSquared.
What about revenue?
It’s not just about which campaigns caused someone to buy – it’s also about how much they bought. You’d take 5 customers paying $10k each over 50 customers paying $300 each. Which campaigns got high-value customers in the door first? Every lead counts, but you want to know which campaigns generated your best leads – and the ultimate judge of lead quality is how much money you got when they bought.
Each marketing campaign should be measured both by count of opportunities and deals it sourced, AND by bookings value. Here’s an example:
Notice that these campaigns are not ranked by the number of leads they generated or the number of deals they sourced. Instead, they are ranked by bookings, meaning the revenue driven by that campaign. If you just look at the count, you miss campaign value analysis entirely.
CEOs care about how their marketing team’s campaigns contribute to overall ROI. Marketing attribution by count and dollar value is the best way to evaluate campaign influence to help you prioritize for future campaign plans.
How do you calculate marketing attribution at your company? What works and what doesn’t work?