Accurate attribution will require a combination of measurement techniques that measure the full marketing funnel.
By Svetlana Filipson | Head of Analytics, Delve
Multi-touch attribution (MTA) tools such as Google Analytics 360 and Adobe Analytics are universally accepted ways to measure marketing performance—but they also can lead to biased results and incomplete buyer journey insights. With third-party cookies going away, traditional multi-touch attribution models may become even more unreliable. As a result, many marketers may find themselves “flying blind” after 2022 as they attempt to allocate media budgets between upper-funnel and middle/lower-funnel tactics while trying to assess return on ad spend (ROAS).
Why solve now? Because reliable attribution insights are essential for allocating media budgets and assessing media performance. Research by McKinsey found that by shifting greater media allocation to areas with higher returns and employing test-and-learn optimization for demand-generation campaigns, marketers can achieve a 15–20% lift in marketing ROI.
To prepare for a world in which multiple measurement techniques will be needed to improve attribution accuracy, marketers must align their tech stack and KPIs to become proficient in applying full-funnel analytics to assess media performance.
Cracking the Code for Marketing Attribution
The digital media industry has accepted that we’re in the last days of the third-party cookie era. What we need to do is act on that acceptance. It’s difficult to overstate what third-party cookie deprecation will mean for campaign measurement: Traditional attribution models rely entirely on third-party cookies, as first-party cookies simply aren’t sufficient to measure across all channels. Marketers need to make apples-to-apples comparisons for reliable measurement, and to do so they’ll need to change their tactics.
Third-party cookie deprecation forces a change that marketers and agencies should recognize is overdue and necessary. Traditional attribution models were never entirely accurate, anyway–they don’t address the full funnel, and marketers are left to make assessments with only a partial view. In all fairness, traditional attribution’s strengths are in measuring middle- and lower-funnel intent, largely missing upper-funnel awareness channels.
The value of solving for attribution gaps and bias is pretty obvious: improving ROAS and marketing ROI. Any time marketers can create a more holistic and accurate picture of touch points that drive influence along the buyer journey, they can improve paid media efficiency by “buying smarter” (not more) as well as target higher-value customers and thus, higher return. An accurate full-funnel picture of buyer behavior can inform decisions to reallocate budget to upper-funnel brand awareness activities that can enhance middle- and lower-funnel volume, velocity, and conversion.
Reimagining Attribution to Capture Full-Funnel Interactions
Even when third-party cookies were bankable, there was no such thing as the best traditional attribution model because of the mid/lower-funnel bias of such models. Traditional models often separate branding from performance: According to a recent McKinsey report, under 20% of marketing executives have a clear understanding of branding campaigns, which leads them to allocate more spend lower down the funnel and to neglect the importance of brand affinity to brand loyalty over time.
A measurement strategy for the future—and really, to catch up with the present—must focus on full-funnel cause-and-effect analysis. This strategy calls for a combination of mixed media modeling and incrementality, incorporating the marketplace’s emerging proxy ID solutions and experimental methods (such as A/B testing) when applicable.
Let’s be frank: A full-funnel approach to measurement is challenging. In order to put it into effect, marketers and businesses need to understand how spend in each channel affects the performance of other channels. Full-funnel requires businesses to take action—and today, marketers can really step up and articulate to stakeholders what those actions should be. Keep in mind many businesses have held onto insufficient attribution models in large part because it’s difficult to change them. That’s how we end up with 44% of marketers still favoring first-touch attribution (which doesn’t credit the full funnel) and 41% using last-touch in digital alone (which creates inherent bias toward remarketing)—even though 63% say the ideal measurement solution requires a full-funnel understanding of the consumer journey.
Beyond Multi-Touch Attribution
With third-party cookies going away (and thereby “unbundling” user IDs), several new vendor solutions are attempting to fill the gap by attempting to connect cookieless identifiers with traditional IDs to “reconstruct” individual identity. The question is whether this approach will work for cross-channel and cross-device attribution to preserve MTA as a way to measure marketing effectiveness. The reality is, it’s unclear if a reliable identity resolution solution will emerge so marketers would be well-served to begin adopting testing methodologies that might provide more reliable performance indicators (e.g. did certain ads drive the desired outcome?)
Media mix modeling (MMM) will play a similar role to what it always has, but it’s not a full replacement for MTA. Incrementality testing—which uses a control group that doesn’t see the campaign’s ads—helps determine weekly or monthly impact, which MMM is not immediate enough to address. It gives marketers a more reliable view of any given channel’s performance, and allows them to better adjust channel attribution.
Automated incrementality that is natively built into media buying platforms is still a relative novelty, but Facebook is ahead of the curve in using it, and is worth monitoring. Incrementality needn’t be expensive, relative to some measurement strategies, but it may be time-consuming. It can play a significant role in understanding short-term effects, driven by changes in campaign performance or even changes in shopping behavior. As COVID accelerated the time consumers spend online, we can see changes in shopping behavior that may be both sudden and profound.
McKinsey notes that “Doing regular incrementality tests, which involve running a structured experiment with a control group of consumers who aren’t shown ads, can provide a cleaner verification of a particular channel’s performance, as well as insights that are closer to real-time and more granular data on campaigns. This helps marketers assess the true impact of their efforts and adjust the attribution for a channel accordingly.”
The best strategy is to use MMM for big-picture, long-range online and offline budgeting, and incrementality for the shorter term, which is so important for digital. Marketers can also think about A/B-style testing—introducing or swapping campaigns to measure short-term impact. A/B testing is a cause/effect model, and some advanced measurement vendors have been using it already in anticipation of a world without third-party cookies. Facebook deserves some attention there as well, with its introduction of holdout tests for conversion lift, a form of A/B testing.
Measuring Full-Funnel Marketing Performance
With time running out on third-party cookies, marketers need to begin implementing full-funnel, cross-channel measurement methods. This starts with aligning your KPIs and your stakeholders. McKinsey recommends a unified set of KPIs across all channels and points of the funnel, connected to outcomes that affect the business’s bottom line. But according to a Digiday/Bazaarvoice report, 38% of marketers believe they and their agency or brand partners are not aligned on metrics. And 82% of marketers say that getting data organized is a barrier to even using the KPIs they want.
To overcome this hurdle, DELVE recommends that brands consider unifying their customer data via a cloud-based data lake or CDP and provides several different roadmaps for fast-tracking the infrastructure to improve marketing analytics and subsequent campaign performance. It’s essential for accurate measurement going forward: McKinsey found marketers who can bring together data and creativity grow double the average rate for S&P 500 businesses.
For most businesses, the first step is getting all stakeholders on board. It’s not enough to get buy-in from the CMO—all partners involved must be technologically enabled to deliver data and align KPIs, and this includes those responsible for media performance. Keep the following considerations in mind:
- Assess your current ad tech stack and make changes (as needed) to eliminate tech that you don’t use and consider adding partners to fill digital capability gaps.
- Reassess your KPIs and measurement strategies, and ensure the data you need is clean and readily accessible.
- Create a plan for measuring KPIs without depending on third-party cookies. Omit elements of your old plan that will likely be unreliable, and pinpoint the gaps you’ll need to fill in (for example, the relationship between any online channel performance and offline revenue).
By understanding stakeholder objectives, marketers can identify gaps in their measurement strategies and propose attribution models that everyone will embrace.
Gaining Internal Alignment on Attribution Measurement
New measurement strategies will require participation across multiple teams within the business. While you’re approaching this process internally, start high and work your way down. That is, start with how the business earns revenue. Think about the KPIs that contribute directly to the business’s overall objective. (Part of this means determining the right KPIs for the right consumer touchpoints.) Consider what you can realistically measure, using the data you have, that indicates overall performance. If you’re missing a piece (say, in-store traffic), think about a potential proxy measurement that can be used to still enable KPI tracking.
Next is to get the necessary data from agencies and other partners. This also varies from business to business, and may or may not be manageable entirely in-house. Identify what resources your business has, and how much of the process you can own versus outsource. To get your outside partners aligned on KPIs, be clear about communicating what your KPIs are, why you need the insights and data you need, and how you gauge whether the campaign is successful. This will lead to more meaningful partnerships, as opposed to standard client/vendor relationships—and as simple as it sounds, it’s not as common a practice as one might think. Designate one point of contact within your business for each partner in order to streamline conversations and move efficiently toward solutions.
As you’re getting results from your measurement efforts, note that results from different measurement methods impact different stakeholders within your own business. MMM insights are helpful in creating and sharing the overall budget with your CMO. Incrementality insights are helpful for people who are more in the weeds, like your channel managers. Together, MMM and incrementality satisfy the needs of multiple stakeholders and inform your channel strategies.
The Time to Get Started is Now
Marketers are already planning for a life without third-party cookies in 2022, so now is the best time to reimagine and modernize measurement, and to finally understand campaign performance across the entire funnel and all channels. For some businesses, this will mean they will have to move from an older method like first- or last-touch, skip past outdated MTA entirely, and embrace a new strategy for the future.
The industry might be well-served to forget about the impossible goal of a “best attribution model” and to embrace a hybrid approach to attribution: MMM, incrementality, and cause/effect testing for full-funnel analysis. This will require new strategies, ample data to truly go beyond attribution, and immediate action.
Want to fast-track your first-party data strategy and drive real ROAS gains in advertising? Get in touch with the DELVE team today.