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After much discussion about ‘marketing attribution’, the process of awarding different marketing events different levels of commission depending on their role in the conversion, it seemed appropriate to explain how exactly this works in practice and to demonstrate that the technology is available to make it happen.
First, it is important to make the distinction between attributing credit to channels in your reports for better planning and dynamically awarding proportions of commission to partners using an attribution model.
Obviously, Google isn’t about to accept a lower percentage of the CPC because you tell it the click it delivered only played a small part in a sale. But you can attribute different levels of ‘credit’ to it in order to provide you with data that may help determine your future spending plans.
However, for CPA channels, where the advertiser controls the commission that gets paid, clients really can begin to award percentages of commission to multiple channels, based on insight into the role they played.
So here’s some potential definitions:
1. Attribution: setting event weightings in reports only. This allows the advertiser/agency to optimise their plans in future campaigns
2. ‘Applied attribution’ or dynamic awarding: conditionally loading tags and altering basket values to let you award commissions based on an attribution model
So, let’s tackle CPM and CPC channels first.
Awarding ‘credit’ to CPM/CPC campaigns
These campaigns will still provide conversion tags to show the conversions generated (and therefore the value of) each campaign. Using certain technologies (I’m sorry, we only know of TagMan though we’re glad to hear about others) these tags can be loaded a proportion of the time based on how significant you believe their role in a conversion to be.
For example, where a display ad click on a one-day cookie window appears in the conversion path, you might sensibly decide that this will have played a major role in delivering a customer, while a display impression on a 30-day cookie window might not. Based on this belief, the conversion tag on the display click could be fired 100% of the time and the display view, say, 25%.
Using a container tag solution, the advertiser retains a full click and view-path record, it’s just that ‘rectified’ conversion data for their CPM & CPC channels – based on the tags that were actually fired - can be used to make better informed spending decisions.
For CPA channels, the automated awarding of commissions works exactly the same way but clearly has a direct effect on the money you lay out, and to whom.
First, for buying on a CPA via affiliates, affiliate conversion tags use a basket value to calculate their bounty. By deploying these tags through a container you can change the basket value parameter before passing it to the affiliate conversion tag. If the container has visibility on all click and view events leading to the conversion, the amount passed can then be a function of an attribution model selected by the advertiser.
For example, if there are two clicks via an affiliate in the conversion path and a flat attribution model is used, 50% of the basket value can be passed to each affiliate conversion tag for the affiliates to calculate their bounty.
Then, for buying on a CPA via ad networks, publishers or ad exchanges, where the basket value or bounty is not passed to the conversion tag (but negotiated independently of the technology), a container can deploy these tags a proportion of the time depending, as with the CPM/CPC campaigns, on how you prefer to attribute credit.
For example, in a last click-biased linear model, and where two ad networks deliver clicks in the path to conversion, the tag for the last click could be fired 70% of the time, and the conversion tag for the penultimate click 30% of the time. This would result in the effective division of advertiser bounty across channels, biased towards the last click.
By combining all three methods, advertisers are able to automatically attribute credit and commission to all online marketing channels, based on their true value in delivering a sale. It is real, applied marketing attribution and it is possible today. But, the key is to understand those roles fully before you begin and to work closely with all your partners, affiliates, networks, publishers and agencies, to develop a model that rewards true value.
For us this means, firstly, using a universal tag to identify the paths to conversion that exist and analysing them to develop a theory for the role you believe the different marketing channels are playing. This theory needs to be then discussed closely with your providers to gain a complete view.
Next step: test your theory. Before anyone goes off upsetting key partners such as affiliates, it is essential to run attribution tests where you examine the rectified data with your partners to establish what the impact would be on future spend, the adjusted commission you award your partners and, significantly, your relationships.
The great thing about going through this exercise, apart from the fact that it's a valuable one to undergo whatever the insight it delivers, is that the channels delivering real value (the exceptional affiliates, for example) will do better, not worse.
With advertisers currently focused on last-click models, it is no surprise that the strategies of the entire industry are equally focused on delivering the final click. But by using container tags and applied marketing attribution, your marketing partners can get back to working much more holistically. Brand-based work will begin to get its appropriate attention, quality publishers will gain the credit they deserve, and ‘goal-hanging’ might become a suitably unprofitable approach.
Applied attribution is truly, at last, possible and not a moment too soon.