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Anticipating consumers’ every move to conversion is essential to realizing a strong return on marketing investment (MROI), yet, pervasive methods for understanding consumer behaviors fall short in a multichannel environment.
In the digital world, channel savvy, highly mobile, multiple device-happy consumers are in control. While they move from one media channel to another—and from one device to another—companies across industries are struggling to keep pace.
Anticipating consumers’ every move to conversion—and measuring every interaction across every channel—is essential to realizing a strong MROI and to sustaining competitive differentiation. Yet, pervasive methods for understanding consumer behaviors fall short in a multichannel environment.
As such, various attribution models and approaches have emerged to help businesses better capture and analyze consumers’ purchase journeys across both offline and online channels. Though a singular approach for measuring consumer data has yet to emerge, multichannel attribution holds exciting promise.
Getting an accurate understanding of consumers has never been more important—or more difficult. Marketers face a monumental task in serving empowered, mobile and channel-savvy consumers who expect to get what they want, when they want it and where they want it. Marketers must understand consumers’ intentions, impressions and behaviors to determine the offline and online channels that will yield the best MROI.
They must be able to interpret the impact of different media drivers including:
Developing an effective marketing strategy means acknowledging inputs like these so that marketers have an accurate understanding of how a sale happens, who should get credit for it, how credit should be attributed to each interaction and how marketing investments must be spread across channels.
The reality of understanding the multichannel consumer has led companies to explore the value of direct, last action or last click versus multichannel attribution.
Direct attribution has been a popular approach for analyzing consumer data. Not only because alternative approaches are just beginning to emerge, but also because direct attribution is simple to implement. It calls for attributing conversion (or purchase) to the “last action,” such as a mouse click or direct mail response. Yet, marketers are beginning to acknowledge that this approach can lead to overattribution of consumer response to a particular action. Moreover, direct attribution leads to linear thinking—the assumption that everything has a fixed cost per connection or click, and if marketing investment is doubled, the consumer response rate will also double.
Multichannel attribution offers a different way of assessing consumer purchase data. It reflects the emergence of econometric MROI analyses, which focus on, measure and analyze historical data of all known interactions over a specific period of time. The multichannel attribution approach provides greater insight into the data influencing the purchase or connection by recognizing that multiple inputs drive a purchase and quantifies, or attributes, value to each input. Multichannel attribution also allows optimization of forward-looking budgets, identification of cost savings and improved MROI.
Analyzing consumer behavior is getting more complex, not only because of the sheer volume of data, but also because that data comes from multiple sources. In this environment, there are three fundamental aspects to successful multichannel attribution.
Big data mindset. To process a huge volume of data and drill down to various levels of data granularity, robust data architectures for enabling systematic consumer data acquisition, processing, population, and reporting, as well as data analytics are essential.
Dynamic tools and capability. Without a “one-size-fits-all” approach to successful multichannel attribution, a variety of tools such as clustering, logistic regression and neural networks will be needed to stay ahead in a complex and changing landscape.
Integrated analytics. Multichannel attribution must be aligned to and integrated with other analytics techniques, which will help marketers to understand the deeper-dive context of insights into surrounding media and customer experiences and behaviors.
As multichannel attribution gains popularity and matures, companies will have an effective tool to help deliver the right message, via the right channel, at the right time to a larger audience, as well as make accurate investment decisions across channels. How will multichannel attribution influence marketing in the digital age?
Micro-targeted marketing campaigns. With data granularity and new analytics techniques, marketing organizations can access micro-segmentation data and deliver targeted marketing campaigns to individual consumers or to a specific segment of consumers at scale.
Continuous improvement. Companies will be able to “test the water” for new products and services; learn from early consumer responses; and make the necessary changes before launching them to a wider audience.
Business strategy alignment. As more attention is focused on the last action dilemma, we are likely to see multichannel attribution becoming a key component of not just marketing strategy, but of a company’s overall business strategy.
December 6, 2012