Online Attribution How do you value a click that doesn’t lead straight to a sale? June 2013 neil.charles@mediacom.com

Today we’ll cover

1. Attribution analysis: what’s the issue?

2. Traditional attribution may lead to under-valuing your ROI

3. What’s MediaCom’s approach?

4. What are the implications for online ROI?

5. Can we do the same for off-line channels?

A person who wants to buy a new laptop might make a purchase

something like this…

Google

search for

‘buy laptop’

Clicks a paid-for

Google ad for

currys.co.uk

A person who wants to buy a new laptop might make a purchase

something like this…

Google

search for

‘buy laptop’

Clicks a paid-for

Google ad for

currys.co.uk

Investigates some

other retailers

A person who wants to buy a new laptop might make a purchase

something like this…

Google

search for

‘buy laptop’

Clicks a paid-for

Google ad for

currys.co.uk

Investigates some

other retailers

Checks

currys.co.uk again

via a paid ad, by

searching

‘Currys laptops’

A person who wants to buy a new laptop might make a purchase

something like this…

Google

search for

‘buy laptop’

Clicks a paid-for

Google ad for

currys.co.uk

Investigates some

other retailers

Checks

currys.co.uk again

via a paid ad, by

searching

‘Currys laptops’

Purchases a

laptop the

following day, by

searching for

‘currys’

The customer who bought the laptop has done three

things that we can measure

Generic PPC Click

Brand PPC Click

SEO Click

Traditional attribution approach gives part of a single

sale, to each ad that the customer saw

Generic PPC Click

Brand PPC Click

SEO Click

But how much credit do you give each ad?

Generic PPC Click

Brand PPC Click

SEO Click

100% Last click wins

Equal weight

“Modelled” weight

33% 33% 33%

25% 25% 50%

If you remove an ad, you break the attribution chain and

the WHOLE sale is potentially lost

Generic PPC Click

Brand PPC Click

SEO Click

The traditional approach may lead you to under-value

your advertising ROI

Generic PPC Click Brand PPC Click SEO Click

33% 33% 33%

Traditional

Approach

Generic PPC Click Brand PPC Click SEO Click

100% 100% 100%

Assuming that every interaction which leads to a purchase

is essential, would give us the best case for marketing ROI

In the example of the laptop buyer, we can assume that if

either of the paid ads was removed, they wouldn’t have

bought from Currys.

This gives the best case scenario ROI for the ads

Calculating the best case is useful to work out how important

click-path might be

“Countless hours can be spent

manipulating and setting up data

before you can even think about

gleaning insights on your

campaign.” doubleclickadvertisers.blogspot.co.uk

We take a two step approach

“How wrong is last click wins?”

We take a two step approach

“How wrong is last click wins?”

“What is the true ROI?”

Search works at the end of the funnel.

Display is less likely to be an end point.

% of ad clicks and views that lead directly to a conversion,

vs. appearing in a converting customer’s funnel (example client)

Which end points have attribution paths?

% of converting customers who have a multi-channel path,

by ‘last click wins’ end point (example client)

We can break paths down further, to see where

converting customers have been

Advert interactions anywhere in path, by end point (example client)

Now we can see the difference between how many

converting people saw an ad in total, vs. last click

Potential “Reach multiplier” over last click wins (example client)

Previous examples are typical of results we see across

multiple industries

Typical “Reach multiplier” with bands showing highest and lowest measured results

The previous analysis showed potential multipliers

Somebody seeing a display ad and then converting on a PPC

term, does not necessarily mean that the display ad is

responsible for that conversion

Many people who eventually go on to become customers may

see different ads, without reacting to them

Lining up all conversion paths, gives overall chance of

conversion Channels Seen

Non

ConvertingAffiliates Display Facebook PPC

Retargetin

gYouTube

All

Converting

Display,Affiliates,PPC,Retargeting,YouTube, 43.3% 0.0% 22.8% 0.0% 31.6% 2.3% 0.0% 56.7%

Display,PPC,Retargeting,YouTube, 46.6% 0.0% 12.5% 0.0% 37.6% 1.8% 1.4% 53.4%

Display,Affiliates,PPC,Retargeting, 51.7% 4.0% 10.8% 0.0% 30.8% 2.6% 0.0% 48.3%

Affiliates,PPC,Retargeting, 52.8% 0.0% 0.0% 0.0% 47.2% 0.0% 0.0% 47.2%

Display,PPC,Retargeting, 53.1% 0.0% 11.1% 0.0% 33.3% 2.4% 0.0% 46.9%

PPC,Retargeting,YouTube, 58.0% 0.0% 0.0% 0.0% 42.0% 0.0% 0.0% 42.0%

Display,PPC,YouTube, 62.6% 0.0% 6.5% 0.0% 29.1% 0.0% 1.8% 37.4%

PPC,Retargeting, 63.6% 0.0% 0.0% 0.0% 36.4% 0.0% 0.0% 36.4%

PPC,YouTube, 65.4% 0.0% 0.0% 0.0% 32.4% 0.0% 2.2% 34.6%

Display,Affiliates,PPC,YouTube, 66.4% 0.0% 7.8% 0.0% 25.8% 0.0% 0.0% 33.6%

Display,PPC, 67.3% 0.0% 5.2% 0.0% 27.5% 0.0% 0.0% 32.7%

Display,Affiliates,PPC, 70.2% 2.2% 6.0% 0.0% 21.6% 0.0% 0.0% 29.8%

Affiliates,PPC, 74.2% 3.3% 0.0% 0.0% 22.5% 0.0% 0.0% 25.8%

Display,Affiliates,Retargeting,YouTube, 75.1% 4.1% 15.4% 0.0% 0.0% 4.0% 1.4% 24.9%

Display,Affiliates,Retargeting, 79.4% 3.9% 12.8% 0.0% 0.0% 3.9% 0.0% 20.6%

PPC, 83.9% 0.0% 0.0% 0.0% 16.1% 0.0% 0.0% 16.1%

Display,Retargeting,YouTube, 84.4% 0.0% 12.1% 0.0% 0.0% 2.0% 1.5% 15.6%

Display,Retargeting, 88.9% 0.0% 9.3% 0.0% 0.0% 1.8% 0.0% 11.1%

Display,Facebook, 97.3% 0.0% 0.0% 2.7% 0.0% 0.0% 0.0% 2.7%

Display,Affiliates,YouTube, 98.0% 0.4% 1.3% 0.0% 0.0% 0.0% 0.2% 2.0%

Display,Affiliates, 98.7% 0.4% 0.9% 0.0% 0.0% 0.0% 0.0% 1.3%

Retargeting, 98.9% 0.0% 0.0% 0.0% 0.0% 1.1% 0.0% 1.1%

Affiliates,YouTube, 99.6% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.4%

Conversion Channel

How many sales

would I lose, if my

customers didn’t see

this ad?

With regression analysis, we can determine which

channels add to the chance of conversion

Affiliates Display Facebook PPC VOD

% of last interaction wins conversions 2% 65% 0% 27% 4%

Minus Affiliates 100% 5% 0% 0% 2%

Minus Display 60% 100% 100% 3% 100%

Minus Facebook 0% 0% 100% 0% 0%

Minus PPC 5% 4% 0% 100% 3%

Minus Retargeting 7% 16% 0% 5% 7%

Minus YouTube 5% 19% 0% 0% 100%

Modelled multiplier estimate 2.38 1.13 1.00 1.11 4.15

Loss

fro

m

rem

ovi

ng

chan

ne

l

Conversion Channel

Impact of removing a channel from current schedule

This can make working out ROI forecasts quite

complicated...

What about off-line attribution?

Off-line attribution can’t work the same way

because we don’t know exactly who saw a TV

or press ad

We need econometric modelling...

Econometrics measures and then improves the

effectiveness of advertising

Measures the effectiveness (return on investment) of past

advertising campaigns

Splits marketing campaigns into their individual parts

Forecasts the effectiveness of

future advertising campaigns

Uses forecasts to produce a

more effective marketing mix

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Sale

s (£

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s)

Press Radio

TV Store Openings

Seasonality Actual

Model

We start with a sales history; two to three years of weekly

sales data

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Sale

s (£

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Sales

and a model, that at this stage doesn’t know anything at

all about sales movements

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Sale

s (£

'000

s)

Sales

Model

Step 1: Add large, easy to measure factors to the model

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Seasonality

Actual

Model

Step 2: Identify and model major trends in sales

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Model

Step 3: Once the basic model is built, we can get a first estimate for marketing

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Model

Step 4: The final model is a good fit and includes all major marketing investments

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TV Store Openings

Seasonality Actual

Model

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New

Cus

tom

ers

Immediate TV Contribution TV Carryover contribution

New Customers

The effect of a marketing burst can last well beyond the timing of the spots

Example of a highly impactful TV burst

When TV is on air, search volumes increase dramatically

0 10,000 20,000 30,000 40,000 50,000 60,000

CPC

Organic

CPC

Organic

CPC

Organic

CPC

Organic

Tick

ets

Trai

nC

hea

pB

ran

d

Number of clicks (Feb 2011, Central)

Base

Driven by TV

Bra

nd

Dis

cou

nt

Pro

du

ct 1

Pro

du

ct 2

TV campaign effect on number of clicks on branded and generic search terms

Pay per

click %

increase

Organic

% increase

Brand 218% 251%

Discount 9% 71%

Product 1 7% 322%

Product 2 23% 283%

Forecasting is the holy grail...

With attribution analysis and econometric modelling we can:

Forecast the impact of changing investment in a media channel

And...

Forecast the impact that this will have on other media channels

Attribution recipe

You will need... 1 x SQL server 1 x Database administrator 1 x copy of R (or similar) 1 x econometrician 1 x copy of Tableau 300m x rows of cookie data 3 years of sales data 3 years of search data A full media spend history