One of the business side effects of the pandemic is that it has put a very sharp light on Marketing budgets. This is a very good thing under all circumstances, but particularly beneficial in times when most companies are not doing so well financially.
There is a sharper focus on Revenue/Profit.
From there, it is a hop, skip, and a jump to, hey, am I getting all the credit I should for the Conversions being driven by my marketing tactics? AKA: Attribution!
Right then and there, your VP of Finance steps in with a, hey, how many of these conversions that you are claiming are ones that we would not have gotten anyway? AKA Incrementality!
Two of the holiest of holy grails in Marketing: Attribution, Incrementality.
Analysts have died in their quests to get to those two answers. So much sand, so little water.
Hence, you can imagine how irritated I was when someone said:
Yes, we know the incrementality of Marketing. We are doing attribution analysis.
NO!
You did not just say that.
I’m not so much upset as I’m just disappointed.
Attribution and Incrementality are not the same thing. Chalk and cheese.
Incrementality identifies the Conversions that would not have occurred without various marketing tactics.
Attribution is simply the science (sometimes, wrongly, art) of distributing credit for Conversions.
None of those Conversions might have been incremental. Correction: It is almost always true that a very, very, large percentage of the Conversions driven by your Paid Media efforts are not incremental.
Attribution ≠ Incrementality.
In my newsletter, TMAI Premium, we’ve covered how to solve the immense challenge of identifying the true incrementality delivered by your Marketing budget. (Signup, email me for a link to that newsletter.)
Today, let me unpack the crucial differences between attribution and incrementality to empower you – and your Senior Leaders – to have intelligent discussions about the actual problems you need solved, and justify an investment in additional Analysis Ninjas.
Understanding this difference will also help you ace your job interviews – a lovely bonus. :)
An introduction to multi-channel digital attribution analysis.
When you open a report in any digital analytics tool, like Google Analytics, almost all the reports you look at attribute full credit for the Conversion to the referrer associated with the last session where the conversion occurred.*
(*For the Analytics super nerds, my sisters and brothers: Strictly speaking Google Analytics reports are not last-click conversion, they are last-non-direct-conversion.)
In English, this means if someone clicked on a Paid Search ad on Bing and converted..
…Bing gets all the credit for that conversion in your Analytics reports.
For example, a report like this one…
This report is not an entirely accurate representation of advertising’s performance because the last-click rarely represents the complete consumer journey.
The customer might have seen, or been forced to see :), other ads preceeding that last touch-point which happened to be Bing in our example.
The act of identifying all the touch-points (impressions and/or clicks) and their influence is what’s known as attribution analysis.
Many analytics tools, including Google Analytics, come built with functionality to help you understand the complete consumer journey and all the touch-points leading up to a conversion.
What Marketers do, in particular the ones whose job descriptions include only paid media, is say ok fine, let us look at all the touch-points that led to conversions.
In a nifty bit of sleight of hand, they create analysis that is reflected in this picture…
This does sucks less.
But. Notice a pattern. They are all paid ads.
Paid Media Marketers (sometimes referred to as Direct Response Team or Performance Marketing) love doing attribution analysis across only paid media channels becuase it allows them to distribute credit only across their work.
This inflates the importance of paid advertising, at the expense of owned and earned tactics – which your company is also investing in.
That of course suits the agenda of your Paid Media Marketers just fine.
But. It is wrong.
Because the complete consumer journey to conversion, in this instance, actually looks like this…
The advertising played a role in driving the conversion. Yes. Absolutely!
So did owned media. Email, was a crucial second to last before conversion.
So did earned media. Organic Search, got the individual to an optimal page on your site.
As you do digital attribution analysis, watch out for Paid Marketers who say they do attribution analysis but only count paid media channels. Work to help them, and your Senior Leaders, understand that this inflates paid marketing’s value well beyond what’s deserved.
The paid media team might resist saying omg but that will require expensive tools and more data and take so much time and it is so painful and omg why do you hate us so much!
Worry not. Every decent web analytics tool now includes built-in attribution analysis across owned, earned, and paid across digital platforms.
It will, literally, take 30 seconds to get going (of which 25 seconds is you booting up your computer).
Is my attribution analysis awesome?
Here’s how you can measure how sophisticated your attribution approach is:
If you are using the full power of the attribution modeling across owned, earned, and paid, you are at an industry-average level of analytics sophistication.
If you have hooked up the owned, earned, and paid multi-channel attribution analysis results directly to platforms you are buying ads on to ensure smarter bidding, you are at an industry-leading level of analytics sophistication.
(In English: Attribution analysis will give proper credit to AdWords instead of an over/under-inflated value. This can be connected to AdWords. AdWords will lower/raise your bids to account for the credit it deserves. Nice.)
Getting to industry-leading level is not just about being able to do the analysis, it is about automating the actions that can be take from the analysis.
Now you understand why attribution is important, how your Paid Marketing team is likely inflating its value, and how to check how sophisticated your approach is… Let’s take a small detour and understand two attribution analysis challenges I want you to be careful about. Then, we’ll get back to Marketing incrementality.
Attribution Challenge #1. Which attribution model rocks?
If last-click and last-non-direct-click are not the best options, which attribution model should you use?
Some people like to use first-click.
First-click attribution is akin to giving my first girlfriend 100% of the credit for me marrying my wife.
Not that smart, right?
You can read about all digital attribution models in this post on the good, bad, and ugly attribution models – it contains pretty pictures!
TL;DR: I recommend not using last-click, first-click, linear, time decay, or position-based, models. If you are a genius, you can use custom attribution modeling. See the post above for all the delicious details, pros and cons.
The one I recommend is data-driven attribution modeling.
Don’t overthink it. (In this instance…) You and I are not as smart as machine learning algorithms that can analyze insane complexity across terabytes of information from millions of customer interactions.
Trust the machines. There are more productive uses of your time.
Attribution Challenge #2. Wait, what about all my offline media?
This is not the complete picture for so many companies…
The real world also exists!
For so many companies, the reality of their marketing efforts looks like this…
The real world also exists, in addition to the digital one!
When you create a full view of your total marketing budget, for most companies the reality of your marketing efforts looks like this…
So what do you do with your Google or Adobe web analytics tool?
Not much.
Sure every company will tell you that you can stand on one feet, curl three left toes, raise your right hand, close only one eye, stand under a shower of arctic-cold water, and fast for 27 days and then do some hard coding to jury rig some sort of signal gathering mechanism with JavaScript hacking and maybe get your offline media into your web analytics tool and maybe you have complete attribution modeling ability.
I just want to observe that their recommended solution is difficult to pull off.
There are other options at your disposal. I refer to this full attribution quest: Marketing Portfolio Attribution Analysis.
Your primary solution will consist of advanced statistical modeling.
These are custom built for each company, there is no off-the-shelf product worth its salt.
Some consulting companies will sell you media-mix modeling solutions, from experience I’ve come to see them with suspicion due to data access issues, stretching math and data beyond a stretching point and so much more.
If you spend so much on marketing that Portfolio Attribution Analysis is worth it for you, you need to hire a small number of brilliant people and empower them. It is the only way to ensure digital is not being over-credited for the conversions that are rightly being driven by offline channels – or vice versa.
Let’s get back on the, more exciting, incrementality train.
Attribution is not Incrementality.
Now that you are so much smarter with a new level of appreciation of the nuances involved…
Let’s say we got 10 conversions this month (each worth $14 million :)).
When we do attribution analysis, whatever kind you like, what we are essentially doing is taking the credit for those 10 conversions and distributing it across identified marketing activity…
This is good.
Be proud of yourself and your company peers.
When done right, it helps you identify how to invest your marketing budget across owned, earned, and paid media optimally (the last-wish of every CMO).
But above is not the full picture of reality.
Marketing is not the only thing that drives conversions for your company.
This one is the full picture of reality…
By existing as a company what I mean is that there is a whole bunch of activity that could cause people to buy your company product – that has nothing to do with any kind of Marketing.
I’ve constantly recommended that you buy Patagonia products because it is a company for social good and I love them.
You might have seen me wearing my blue nano puff jacket and thought I looked snazzy in it hence right then and there you decided to buy it.
Perhaps you read a review of Patagonia products by my friend Daniel and you decided to buy it.
(True story) You might have landed in Frankfurt on a really cold day without a jacket – because California is warm! – and you bought the first jacket you bumped into, and it happened to be Patagonia.
Your mom noticed something in your hiking pictures and decided to gift you a gorgeous Mellow Melon Atom Sling.
I could keep going on about all the pathways to purchase that don’t have anything to do with the work of your Marketing team (though the team, and everyone in it, is incredbily awesome!).
The company will sell a whole bunch of products merely by existing.
This is true for your company as well.
The 10 conversions above, that you were crediting only to Marketing, is wrong.
Reality is more like this…
Marketing’s Incrementality then is being able to identify how many of the 10 conversions would have happened anyway – even if you did no Marketing.
A whole bunch of Conversions you are attributing to Paid Search or Facebook would have happened any way. Do you know how many?
I’ve done loads of incrementality analyses during my career across different types of companies.
Using the highest percentage incrementality that the data has demonstrated, the answer as to how many of the 10 conversions are incremental would look something like this….
It is measuring what's known as True Incrementality…
Typically, if measured accurately, the true incrementality of your Marketing will be in the range of 0% to 25%.
To recap:
Your Paid Search campaign did not entirely drive 10 Conversions.
Expanding the view, your Paid Media did not entirely drive 10 Conversions.
Expanding the view further out, your digital Owned, Earned, and Paid Media did not entirely drive 10 Conversions.
Expanding the even more, your Online AND Offline Marketing efforts did not entirely drive 10 Conversions.
One last expansion of the view, all your Marketing efforts drove 3 Conversions that you would not have gotten any way.
Marketing’s Incrementality!
Oh, now go back and do attribution analysis to determine how to distribute the credit for those 3 Conversions across your Online and Offline Marketing using my recommendations in the first part of this post.
The very best companies on the planet know the number of outcomes incrementally driven by their Marketing (and other) initiatives.
Bottom line.
1. Whatever you do, never say attribution is incrementality. It’ll hurt my feelings.
2. Do you know what your Marketing’s true incrementality is?
Carpe diem.
As always, it is your turn now.
Please share your critique, reflections, and your lessons from the quest to measure Marketing’s incrementality via comments below. Thank you.
Via 
So true!
And this question becomes really, really relevant when companies agonize with the decision of whether to stop bidding on their own branded keywords (e.g. patagonia bidding on the keyword 'patagonia', so that they pay for traffic they probably would have gotten anyway).
There are some interesting stories about this from recent times…
David: We agree.
I've actively advocated for investing in understanding the incrementality of brand keyword Marketing. Once you understand that it is 2% or 7% or 52%, you can begin to understand if that incrementality is profitable, if it is valuable given market competition dynamics, etc. It might turn out that even at 7% it is worth doing. Come to that decision with data.
Just about the only thing you should not do is keep spending under the false belief, often from your web analytics tools, that you might not have gotten many of those sales anyway.
-Avinash.
Love your work, I've read and re-read this. I agree this is mostly accurate but I believe it's more like 3 (incremental just because the business exists) to 7 (the net effect of advertising) for the total 10, the reason I say this is because a lot of my studies/analysis have been in startup and struggling companies that needed turned around.
When you witness the economics first-hand and see the divergence it really is more flip-flop than what you illustrated. However on those big global multi-internationals at or past saturation yes I think it's more what you show here.
Love your work as always, thank you much for publishing!
Andrew: Most of my work focuses on larger companies, true incrementality driven by marketing tends to be between 5% and 25%. It only touches 30% if there is some kind of outlier event that is rarely reproducible.
Analysis done by larger consulting companies – think Bain, McKinsey, et. al. – come out broadly in that range (though in some instances tops out at 20%).
I have fewer data points for Startups. In those few the incrementality range can be higher than 25%, though rarely profitable (conversions at very high CPS).
The important part is to measure it. It is exciting that for your business you are seeing 70% Marketing incrementality!
-Avinash.
I would agree with Andrew- having been CMO at 3 pre-IPO companies now, my experience is marketing is more 40-50% in those cases.
When you're Google, Microsoft, etc people know you, so "Company" goes a long way.
When you're new, no one "knows" you, but does know your competitors, so marketing has a lot of heavy lifting in refining positioning, value prop, getting in the right analyst reports and press, driving the right content marketing (and SEO), etc to just get the name known…
Hi David, I also struggled with this in the past. What I found useful was…
1. Using google search console to find the amount of clicks and impressions Google was giving me.
2. Turning off buying brand keywords till I could see the incremental clicks it was giving me
3. Adjust my budget by using cost per incremental click not cost per click as a driving metric
Thanks for this post. Incrementality seems to be a more valuable tool than attribution but both are necessary.
Marketers and CMO's still need to know how to assign credit to each dollar of sales. (Assuming a company is not ready to do attribution just on incremental sales.)
My question is where does attribution then fit in? What's the point of assigning credit for every dollar of sales across all my channels if so many of those are non-incremental and should not be attributed to a particular campaign?
Shimi: I think of them Matryoshka dolls. :)
You probably have the fastest access to the last-click conversion data. Use this for in-flight optimization – make changes to bids, budgets, ad content, targeting, etc. Do not declare Marketing's victory even if the conversion rate is 100%.
You have the next fastest access to the digital multi-channel attribution data (ex: using data-driven attribution – this is currently the best one -, in a tool like GA). Use this to make monthly, quarterly budget allocation decisions between channels and changing ad content (this is crucial, once you understand what role each channel is playing in the consumer journey). Do not declare Marketing's victory yet.
Finally, you'll have access to results from measuring marketing's incrementality (like the ones I've shared in my newsletters). Use this data to make long-term budget decisions across all types of company investments, of which Marketing will be just one. Use this data to force smarter reckoning between teams working on Owned, Earned, and Paid marketing efforts, as well as what I call above "existing as a company." Use this data to have discussions with your CFO. Declare Marketing's victory now.
You need all three of the above because the use cases are different. But, there is only one true answer when it comes to the value a CMO is delivering to the CFO of the company.
Great question!
Avinash.
Hey avinash thank you so much for your wisdom as always.
I wanted to seek your advise on something I have been noticing spending 6 years in growth/digital marketing – across startups, mncs and side projects.
Tldr: The stage of the company (big brand vs upstart) affects incrementality to an extent in my experience.
Meaning – if I am a new brand, the number of conversions that would have happened for existing is pratically zero.
In those cases, how would you advise monitoring this incrementality as the company grows bigger?
Jerry: I love this angle, thank you for sharing it.
Regardless of your maturity/size as a company, and regardless of if you are doing brand marketing (creative future value for the company) or performance marketing (creating current value for the company)… You must measure incrementality!
Let's say you are a startup, $5 mil in annual revenues. You measure incrementality being delivered by all efforts by your VP of Marketing from a marketing budget of $7 mil/yr (why not, it is VC money any way! :))
Let's say the incrementality is 10%.
Now, you get to decide. Is 10% incremental sales for $7 mil/year worth it?
The answer might be yes of course because in addition to just 10% incremental sales your VP of Marketing can prove she also moved Future Purchase Intent by 40 points. Then, you keep spending.
The answer might be "jebus! no! there is no justification." Then you stop your current marketing and assess: Do we need a new VP of Marketing or do we need a new Marketing strategy?
Either way, you want to measure incrementality.
Sensible?
Avinash.
I'll admit to being guilty of confusing these two early in my career as a consultant. While I added incremental value (!) to my clients, I clearly did less than I thought I did.
This explanation of marketing attribution and marketing incrementality is the most clear one I've seen in all my time in the industry. It is a gift, thank you Avinash.
I love the clarity with which these concepts are presented – kudos!
That said, I do feel the tug of a missed opportunity regarding conversion velocity (time is money!). While it may be true only 3 of the 10 conversions are incremental, was there a shift in the timing of that conversion? Was it captured faster than it would have been otherwise with no additional efforts? Was the AOV higher as a result? Was the converter a previous lapsed customer that came back in to the fold? Do I sound smarter if I ask more questions?
As always it is not cut and dry and the ability to answer these questions depends heavily on the org maturity and access to more than web analytics data. But to even ask the questions at all is a heck of a start!
Adam: What you are pointing out is important, thank you.
The approaches to measuring incrementality rely on a number of techniques (as outlined in my newsletters on the topic) that primarily fall into two categories:
1. Large Scale Experimentations
2. Statistical / Machine Learned Modeling.
In both scenarios, you are controlling for all the variables you mention. So, the test and control clusters have as similar scenarios as possible. If one has time-shifting, the other one will too. Etc.
That is the entire goal: If we change one, or more, stimuli will we see different outcomes. Incrementality.
It is not 100% perfect. You do get better every single time you do it. But, I wanted you to be assured that all said and done…. It is very cut and dry.
-Avinash.
Avinash,
This is one of those times where I feel so compelled to comment and stop being a lurker. This is a fantastic post for marketing analysts (of which I am one of these nerds). Heads up this one is a little long winded.
First and foremost, I agree with the concept that attribution is not incrementality. I agree too that attribution is a tool of analytics to interpret the data. Incrementality is where I have some questions and have a slightly different interpretation of (which is why I would like to share my thoughts here in the comments).
Given that incrementality is defined here as the conversions that would NOT have occurred without marketing influence; I assume you are drawing a line in the sand somewhere around what is ‘marketing’ and what is not.
Without a very clear line separating marketing influenced from not influenced… incrementality starts not to matter. Drawing from your Patagonia example: seeing you wearing something that looks snazzy… I would not have any idea what jacket you had on without seeing the logo (which is not enhancing the product as much as promoting the brand through ‘marketing logo placement’ within the product itself). I might argue that the logo placements on products is a marketing influence.
Continuing from your example again; your friend Daniel writes a review of the Patagonia products and the content assists in the decision by a consumer to purchase the product. The CRFA in the USA allows for consumers to share their honest opinions online in any blog, forum, social media, etc. In this example, lets assume that Daniel is not an affiliate and wrote the review of his own free volition. So, at the surface here I am hard-pressed to find any way marketing influences the purchase decision of the consumer when the only path present is the external review without affiliation. However, I believe there is a counterforce working for incrementality which is buyer-friction. How does a consumer go from reading a review about Patagonia products to acquiring Patagonia products? If we break down the process it might look like this:
Review Article by Daniel > Patagonia Website (Direct) > Shop > Men’s Jackets > Browsing Jackets (15 minutes) > Add Desired Jacket & Size to Bag > Click Checkout/Bag > Verify Bag + Checkout > Fill Out Shipping Info > Fill Out Billing Info > Wrestle with Remorse > Purchase Jacket > Wrestle with Remorse Again > Wait Several Days for Order > Get Package, Jacket Fits (Do not Return).
There are A LOT of steps just to buy the right jacket. Is that okay, is that normal, are there ways to make the process easier/quicker/more trustworthy… probably yes. Those elements are to me, ‘Friction’ and they slow down, limit, and possibly obstruct buyers from purchases in every industry. At the same time, no friction at all could make buying too easy and might inflate the returns. Somewhere in there is a satisfactory point for any type of buying experience that ‘gets out of the way’ of the buyer so they can purchase by reducing friction.
This has to do with incrementality because marketing influences the friction of purchasing (for better and for worse). A business decides how it will get paid (contracts, credit cards, cash-only, trades, etc) and how best to deliver the products and services to the buyers (shipping, digitally, built, etc). All those elements contribute to friction and all those elements are places where marketing can influence the ‘agility’ of the process (friction reduction) or help make the process easier (here is something free while you wait). I think that channel-based is a comfortable format of attribution but is not necessarily all that exists for incrementality because improvements can always be made in managing buyer-friction.
Finally, the last part of incrementality that puzzles me is the element of the prisoner’s dilemma in finding a ‘true’ incrementality for any business. Existing as a company for decades comes with it a certain number of expectations that buyers might have about that company’s industry. Using your quote, “I could keep going on about all the pathways to purchase that don’t have anything to do with the work of your marketing team,” I think you are indirectly referencing this issue. The pathways you describe are all requirements to purchasing or acquiring the product. Nobody can order the products online without a website store with them available. Nobody can get the products they order without the supply chain of delivery. Nobody will keep the products if they are terrible or do not fit. What I am getting at here is not to grasp at straws but to point out that for any purchase pathway there exists some fundamental requirements by every business to be able to sell. Over time those become well known to the buyers and become expectations. A company could sell a whole bunch of products merely by existing – ONLY if they have the infrastructure in place and they survive long enough to do so. So many businesses fail because they built the company thinking ‘if we build it, they will come’ and then nobody came. Other times a business has existed so long that nobody needs to be told it exists or how to buy it because it is engrained in their minds. But that does not mean that you have loyalty if you avoid the non-channel-based marketing influences like product marketing, consumer research, etc.
I think you spell out some fascinating ideas that grab hold of marketing attribution and breathe new life into it by suggesting that marketers need to focus on incrementality. I wholeheartedly agree even though the statistics of that hurt my brain. I think that what friction is an important argument for lifting the incrementality puzzle for the benefit of marketing. In addition I think that existing as a company promotes expectations and buyer loyalty but I am not convinced that they can survive forever without marketing influence.
Kevin: Long-winded is ok in my book. :)
You can measure the incrementality of anything that you are proactively doing ("acts of god" excluded). So, for example, the placement and size of a logo. You can measure the incrementality of that. You stop accepting credit cards and only accept bitcoin and cash going forward. You can measure the incrementality of that. I dare say you should.
Ditto with your content, affiliate, thousand other things you could be investing in (hopefully you are smart and are not investing in a thousand activities).
The challenge in measuring incrementality is how many things you can control for – classic design of experiments challenge. For some people, all they can do is measure the incrementality of their paid Search spend (or Facebook spend or maybe only Facebook video ads). For others, with the right analysis ninjas and size of spend, you can measure Search, Facebook, TV and Bing all at the same time – the whole thing as a portfolio or combinations of the four vs. doing nothing.
You can't control for everything. Aforementioned acts of god, some crazy competitor play etc. This is why incrementality is a journey and not a destination.
To give you a data point… For our largest campaigns, we can measure true incrementality at a portfolio level every six months and in that analysis also identify incrementality of every channel in the portfolio. And, we keep measuring. A little bit smarter each time. We are less wrong every cycle. :)
Here's what you'll not find me agreeing with: Complicated scenarios of what must be or what could be that are based purely on "experience" or "feelings." You are probably with me on this.
Finally: My entire existence – and now somewhat successful career – is entirely based on driving marketing glory. You have my word, smart marketing works really well.
Avinash.
Avinash,
You had me at "how many things you can control for," and I wholeheartedly agree with the experimental view versus the experiential or emotional view of measurement.
And I love the article and your responses here. I think the whole object of finding the truth; no matter how well it speaks of marketing is important. Even if it takes cycle after cycle of analysis to better understand the truth of marketing's impact it has profound effects on business decision making.
Thank you for the reply and for the amazing article – you've opened my eyes :)
-Kevin
For a rough estimation, I use the Direct channel as the baseline for sales that would happen without marketing efforts (I know, I know it's not accurate but please – it's my model to define the baseline).
Then I ad to the Direct channel conversions a percentage of all other channels as sales that would happen anyway.
The channel contribution then is:
All conversion value(offline and online)/Direct channel conversion value (only online) * 100% = percentage of specific online channel contribution that would happen anyway.
Calculating this for the top contributing channels (top contributing channels are all the channels that contribute with more than 5% to the overall online result) I use these numbers as the baseline for defining the incrementality of marketing investments per channel.
I'm completely aware of the pitfalls of this model, but as mentioned – I use it as my model only when the Client doesn't have his model.
So far, no one confronted me with any model, and usually, The Client and I agree to use my model as the baseline.
It would be a pleasure to learn about other people's baseline models.
Miroslav: It is an intriguing approach to providing something to your clients to at least get them to think about the important concept of incrementality.
As you mention, there are many obvious pitfalls including not accounting for the role individual channels or collection of channels play for particular campaigns (which we often get via attribution) and Direct itself might not truly show organic results as it might be at the end of a journey. All of this of course is not incremental.
Even in simple scenarios – like small clients – you can look for periods of lull (time periods with not much marketing or certain channels being off) to identify some rough baselines. Or perhaps you can stagger some campaigns (like skip sending monthly promotions email, see what happens). Or other such approaches to sketch a better baseline.
I'm really glad that you are thinking about this and working to make your clients smarter!
Avinash.
Thanks for the insights.
Is there any multi-channel attribution tool (besides GA) you could recommend? We are just on a hunt for one.
Vilija: Yes, of course.
There are at least 15 more according to this guide.
If I may be so bold, here's a link to my post that lays out the ladder to awesomeness when it comes to a multi-channel attribution journey: Digital Attribution's Ladder of Awesomeness: Nine Critical Steps
It starts with this formula: [People + Process + Structure] > [Data + Technology]
-Avinash.
Absolutely true.
But when your senior management who are often from direct sales background, like in telecom, they are more biased towards sales team over to the marketing teams and they end up owning marketing team's ass (pardon me for my language) and the marketing teams will end up being at their mercy.
So the senior management is to be trained in such attribution analysis or else it is like bhains me aage been bajana types
Girish: You are absolutely right, and I have seen this behavior in other sectors beyond telecom.
The solution we have used is to model both the Sales and Marketing influence factors (especially medium and long-term initiatives that often fall under brand marketing). This helps us identify the true incrementality delivered by marketing overall and by individual marketing strategy (as well as Sales).
This view is persuasive when it comes to helping senior management make optimal decisions.
-Avinash.
Great article Avinash…articulates so well.
One question – how do you measure the impact of the future network effect of those 3 incremental conversions? The 7 conversions referred as 'existing as company' might have a huge influence from word of mouth, of those '3' incremental conversion that happened previously
Mayank: Great question. We want to ensure that we understand the latent effect of our paid marketing efforts (they don't last as long as we might love for them to, but there are latent effects).
I'd written a detailed TMAI Premium newsletter on solutions to measure the three types of incrementality. If you are a premium subscriber, just drop me a note and I'll re-forward it to you.
Very briefly we use the traditional mix-modeling mindset, except that our approach uses machine learning algorithms entirely. It helps us identify the latent/lagging influence of our paid marketing efforts.
-Avinash.
Great post as always!
For me, the biggest challenge is that so many businesses, even large corporations, to this day use last-click attribution to determine the effectiveness of individual traffic sources.
Trying to convince them to use a different attribution model is often very difficult.
Pawel: I can appreciate how hard it is to move people off last-click attribution.
I do believe a step-by-step approach can work. I wrote about it here:
Digital Attribution's Ladder of Awesomeness: Nine Critical Steps
You can figure out where you are on the ladder today, then take one step up, then another, and then another and soon you are rocking data-driven attribution!
-Avinash.
Hi Avinash,
Thanks for sharing such a great article. I have a couple of points regarding your post :
1) How do you use your data-driven attribution model in case of offline + online spending? How to use this information to optimize the campaigns/ads in real-time ? Is there a way to see the effect of paid channels on organic channels?
2) In one of my earlier firms we stopped paid marketing for 1.5 months & in this process, we got only 40% of the total orders, so in this scenario can we say that the remaining 60% is being contributed by paid marketing.
Anand: My reflections:
For #1: You are going to have to step outside of your digital analytics tools and build out something custom (integrating in something like ADH).
For #2: I would not say that is the best methodology to assess incrementality. There is certainly a clue there. I recommend using proper Matched Market Tests or statistical modeling / ml algorithms over a period of time to assess what your true incrementality number is.
-Avinash.
Avinash Kaushik, You are exactly right.
Incrementality is crucial for any kind of marketing. You will find that there are still people who prefer old-school marketing strategies. Which costs a lot more and is very poor in ROI. Today's incrementally test could make a huge impact.
The question is "Why is Incrementality Testing Needed?"
Simply speaking! It is needed when you get a significant amount of impression but your CTR is very low.
Hi Avinash,
How you been doing?
After a long long time, I did realize to have forgotten to visit my favorite site; http://www.kaushik.net . Could be because of the different challenges that took in place in last 2-3 years. Also jumped in to youtube to check, your latest videos. But happy to be back with Avinash, one-of-my-best mentor and admirer, whom I did follow to scale my journey in digital marketing.
And thanks for your articles, which hasn't stopped yet. While GTM & GA getting more advanced, definitely should be a part of regular reader list of your blog.
Thanks.
Dear Avinash,
Duly apologize for being critical but here is my point of view.
Part 1.
If we keep expanding the circle of influence indefinitely then any kind of analysis will be always bring in more and more doubts. We end up saying…Hey have we not forgotten to include this…that… and some more in your report. Therefore the whole analysis becomes suspicious and you have more and more cynics around you who are experts in punching holes in a theory and discrediting anything. Thus keeping the scope limited does serve a purpose at least it is actionable and people will actually do something rather than just analysis paralysis.
Part 2.
Why do we have to solve every puzzle out there as long as we can use some amount of analysis combined with some experience aka instinct and have a reasonable hypothesis and apply this hypo to an action and see the results. The results will tell us if the theory was correct. But if we apply indefinitely expanding attribution we will never reach the point of agreement.
I love to read your article and delve on thoughts given there. Some of them force me to ask difficult questions around my organisation which is making me somewhat unpopular. But that's okay.
Thank you for the great initiative,
Vijay
Sorry another point; How on earth we can do an attribution analysis offline vs online. It will be so much of my idea vs your idea kind of debate. I saw an huge Billboard on Sheikh Jayed Road some two years back and somehow the brand image stuck to my mind and I ended up buying it last week. But during the intervening period I have had positive associations with the brand in many other channels too. So where do we go from here.
On top we have other non paid attributions; Reputation/Trust and many other emotional attributes. It is making the water muddier and thus not worth the effort to do a 100% attribution analysis.
I hope I made my point.
Thanks