Remember the days when advertising was largely linear? Remember when you would simply run a yellow page ad, run PPC, run TV or radio ads and you would generally know which was working? It was easy back then when most small businesses had a handful or less marketing sources to keep track of. Today, it is a far different story.
I was in a meeting recently with a group of marketing industry leaders and I wanted to know from them what is working and what is not. Many small businesses today utilize a dozen or more marketing sources and many of them overlap making tracking and ROI by source increasingly difficult to manage. So when I asked the group how they accurately attribute marketing spend to their sources, I received a number of smiles and curious looks around the room…as if anxiously waiting for the first person to speak. Keep in mind that these are “experts” in marketing.
THE AGE OF MOBILE INFORMATION
A growing majority of Americans today are fully mobile – meaning they have a smart phone nearly everywhere they go at any time. Because of this, the world of information is now at their fingertips at all times including when they see your ads. The old days where somebody would see your 30 second ad and then decide to contact you is quickly giving way to the new informed consumer who when seeing your ad will now do more research about you and your products/services before they ever decide to contact you.
This ability to now access and research at any time and nearly anywhere has effectively moved advertising away from a linear tracking model to a non-linear world where decisions to contact and convert off of an ad involve an increasing number of citations and touch points before your potential customer ever reaches you. Which creates a new problem: how can you now track it?
AD MEASUREMENTS TOOLS ARE QUICKLY CHANGING
I recently met with a client who is a huge media spender ranging from all of the traditional mediums (TV, radio, print) to the newest latest and greatest digital (Social Media Video ads, proximity marketing, etc.). When I asked him how he tracks what is working, he confidently pulled up a marketing report that showed his results by marketing source. He had indicated that his go, no-go marketing decisions were based entirely from this report. So I decided to dig deeper. When I had his staff show me exactly how they entered this information into the CRM system that created this marketing report, I was not surprised with what I heard. My client on the other hand was.
It turned out that a good deal of his lead marketing source information were not accurate at all. It was not really the staff’s fault either. When prospective customers would call in, they were asked them how they heard of the firm. Since most people couldn’t accurately remember, the simple answer was “TV” or “online”…the first things to typically cross their minds. But could they really remember exactly where they saw the firm and more importantly, what did that journey really look like that led them to ultimately contact the firm?
When I forensically research these questions with customers, I increasingly find a path (or steps) that are taken that when combined result in a final conversion. Often these steps are very non-linear and involved multiple decision points. The problem for most businesses today, including the one in question, is they still think and report using linear decision making tools. Their questions derived from the prospective customers are commonly first touch / last touch attribution based on what the customer typically remembers the most…which more often than not is the last thing they did before making contact. Because of this, these first touch / last touch attributions are often cited much more than other elements of the marketing and therefore get the most credit on these lead tracking reports.
THE FIRST TOUCH / LAST TOUCH REPORTING PROBLEMS
Companies that track their reporting based largely on first touch / last touch consumer recall often ignore many of the elements that play a part in the entire conversion process. For example, I had a major TV spender who by looking at his website analytics reports alone I could tell him when his TV ads ran (by seeing website traffic spikes) – even before he received his run-of-station reports from the TV station. But when most of these people where asked how they heard of this company when calling, their typical response was “online.” Why? Because many would then go to the website after watching the commercial, find the telephone number listed and call from there. This is a typical “last touch” reporting company and based on linear source reporting, most business owners would deduce that their website (last touch) was actually performing better than their other marketing and ad sources.
Compare that to another company I worked with who instead would asked callers “How did you FIRST heard about us?” In this case, many more responded with “TV” as their answer. The problem was most of these callers would then research the company heavily online before ever calling them. This is a typical “first touch” reporting company and based on a simple change in the wording of the question most business owners would deduce that their TV ads (first touch) was actually contributing far more than their other marketing mediums in use.
Adding to all of this is the growing level of consumer confusion as to what sources really led them to the business and what to call them. When people say “online” that could mean anything ranging from paid ads, organic search, consumer reviews, directory sites, etc. TV is also being confused for newer social media video ads. In fact, when asked most people don’t even know what to call these so they simply say “TV” when asked about the source.
ATTRIBUTION MEASUREMENT OPTIONS
Knowing that the first touch / last touch measurement reports can be faulty and tend to take away from the other elements that may be under-reported, I first start my analysis by putting each element of advertising/marketing in their appropriate levels on a 4-step marketing pyramid. In this case, they include VISIBILITY, BRANDING, CONVERSION, and RESULTS. Each medium used should be proportionally placed at each level. A growing number of mediums now include a percentage of brand building which should be weighted to each level as well. For example; many good Facebook ads now include a report for “Ad Recall” which stands for the percentage of people are likely to remember your ad two days later. A good campaign can include 20-30% ad recall with means that 20-30% of each dollar spent on these Facebook ads should be counted in the Branding level and not the Visibility level. This process should be completed for each marketing medium used and then totaled for each category.
The next part of the process is to define the metrics and goals for each level of the marketing pyramid. Don’t worry, you may not know these now but the idea is to start tracking them and then baseline them to your own historic results and those of your competitors. All of your metrics you chose to use should support your business goals.
KNOW YOUR CLV’S & CAC’S
All goals and measurements will be incomplete until you can start defining and tracking your Customer Lifetime Value (CLV) and Customer Acquisition Costs (CAC). As discussed in chapter 2 of my last book THE TOP 20%, Customer Lifetime Value is critical in tracking the true value of marketing to both keep and retain a customer over time. This is why many businesses like Dentists will justify actually losing money on their first transactions because they know the total CLV for that customer will far exceed any initial losses needed to initially get them in the door. Your marketing strategy should give an equal consideration to this as well – As I discuss in detail in my book.
MEASURE YOUR BRANDING
Brand building is something you buy with most advertising today – whether you know it or not. The question here is do you properly utilize it as part of your marketing strategy or simply waste it as a cost of advertising? In each market, you will commonly see the same handful of companies who seem to have their names and brands seemingly everywhere you look. Some people write this off as wasteful spending or even narcissism but it is much more complicated and valuable than that.
The average consumer today is bombarded with over 4000 marketing messages a day – a 700% increase over the past four decades. Because of this, some companies place ads to become virtually omnipresent to their prospective customers allowing them to better stand-out from their competition. And all this happens for good reason – people will begin to recognize them the more they see them. The goal is to build familiarity because familiarity builds trust and trust converts a higher level of each subsequent advertising dollar spent. Good brand building companies understand this. They also understand that brand building is a process that takes time to “warm-up” a market to a point of peak familiarity. In most local markets, it takes at least 9-12 months and others can take upwards of three years depending on how much brand building takes place. This is largely a latent process that requires higher levels of initial investment and patience to hit a point of optimal returns. Most small businesses who are married to their short-term tracking results will never understand this but the true brand builders will.
Because of this, you need to understand how each of your marketing strategies contribute to your branding and conversions and how to value it. The first touch / last touch marketing reports will not help support a good brand marketing strategy until you create a clear picture of what your market warm-up strategy is and how much branded is needed to support it. For that reason, a percentage of spend on brand building alone should be allocated to your marketing mix with the expectation of a short-term investment for a longer-term gain.
TEST, TEST, AND THEN TEST AGAIN
Once your have your strategy and initial formulas in place, it is now time to tweak and tune to make improvements. Marketing people commonly refer to this process as A/B testing where they will run similar ads with different variations to see which ones produce superior results. For example, changes can be made to such elements as: the headline, ad copy, video, retargeting, demographics, etc. Another option is to simply stop running certain ad mediums for defined periods of time (ie 30-60) days and comparing the before and after results. This stop-running option becomes less effective the more brand building you do – for the latency in brand recall can skew your numbers.
It is also important to note that this is not a perfect process and is highly malleable from client to client. Each company brings a different set of assets, goals, and expectations to the table and therefore most marketing campaigns cannot simply be a mirror of another – everybody is different. Which brings us to my final point.
ATTRIBUTION MARKETING NOW NEEDS CONSTANT ATTENTION
The days of buying ads and simply letting them run are over. Many companies will continue to operate in this manner but without a sound attribution marketing strategy and constant refinement in place, your returns will continue to decline compared to others that do this correctly. Because of this, you also need to set your own proper expectations as well – for marketing today takes time to refine and improve and there is no such thing as a “perfect” marketing plan anymore. There are only more acceptable results based on constant improvements and refinement.
If all of this seems like a lot of work, well, it typically is. There are tracking systems and vendors that support this type of work but they are commonly very expensive for the small to medium sized business owner to setup and use. Because of this, I tried to keep it simple in this article so the typical first touch / last touch company will both see the need to challenge of their antiquated reporting systems and move in the right direction. To get started, you simply need to follow a few key steps:
- Define your business goals, Customer Lifetime Values, and Customer Acquisition Costs.
- Create an attribution marketing strategy by first placing all of your current marketing mediums into the 4-level marketing pyramid and assigning the proportions to each medium.
- Define and track your key metrics for each category, make sure each supports your business goals, and track them over time. If you are still unsure what is working, fall back on trends in growth by each marketing segment and allocate your dollars of spend in this manner. For example, we know that broadcast TV, print, and radio audience continues to decline while mobile, social, and video are rapidly growing. When is doubt, change your marketing mix to match the growth percentages in where you audience is now moving. You can always further refine from that point forward.
- Test, test, and test your marketing mix making constant tweaks and tuning to find out what works best and continue to make improvements based on all of your marketing objectives and not just your immediate sales in.
- If cannot manage and keep up with this new form of marketing on your own, find a good digital marketing strategist who can assist you moving forward.
????? Need help in creating a attribution branding strategy for your company????? If so, contact us today
#attributionmarketing #marketingreports #marketing #digitalmarketing