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This post by Peter O'Neill is part of the #JUMPchallenge, a blogging competition designed to raise awareness on how to join up online and offline marketing, launched to support Econsultancy’s JUMP event in October. 

In this post, originally published on his blog, Peter looks at the issue of measuring and evaluating marketing performance across multiple channels... 

As a web analyst, my focus on this is related to measuring and understanding the performance of marketing campaigns – based on the idea that the more that you understand about the performance of past campaigns, the more you can improve your future campaigns.

The approach that I am developing towards evaluating marketing performance can be used across both online and offline marketing. It is intended to be used to optimise the financial return that is gained from investing in marketing via multiple channels, taking into account the performance of individual channels and their combined impact on business performance.

The future is campaign attribution??

Working with online businesses, the common approach is to use campaign attribution to allocate revenue to the different marketing channels that are being used. (I am going to keep it simple here by only referring to e-commerce websites that have revenue as their goal although the same principles can be applied to non e-commerce websites using alternative conversion actions).  

Whichever campaign attribute technique is used (first touch, last touch, weighted attribution, etc), it provides a revenue figure that each marketing channel can claim credit for earning. With this data, the business owner or marketer can calculate the ROI against marketing spend by channel and to understand what the impact would be if marketing spend for a particular channel was increased or cut.

There are known issues right now with this approach due to limitations in the various models. However, web analytics and other marketing management tools are developing more sophisticated techniques for attributing revenue to the different touch points.

This is naturally incredibly valuable information as long it reflects reality and I just don’t think it does. It can only be based on known online touch points prior to a purchase being made online and this leaves out so many factors:

  • Offline marketing influences are not captured as these cannot be tracked online (except in the use of vanity URLs or similarly identifying features).
  • Non marketing influences such as a friend’s recommendation or product reviews are not captured.
  • Only online touch points on the same computer used to make the purchase are captured, when people could easily have researched the purchase on a different computer.
  • Purchases made offline are not captured but these could also have been impacted by online marketing and should also be used in any ROI calculations.

Beyond all this, marketing campaign attribution relies on being able to convert a person’s buying decision into simple numbers, to calculate the weighting each touch point had on that decision.  

I don’t believe this is actually possible as people would not be able to accurately say themselves what motivated them to make a purchase – did you book that holiday 15% due to an email, 25% due to a link on an affiliate marketing site and 60% due to a paid search link?  

This is further complicated by the interaction between different information sources and the requirement to develop a model that works with all people (maybe some people are impacted by the first touch point and others by the last touch point).

What are business owners and marketers really trying to achieve?

My philosophy about all this is still in development (and I totally reserve the right to change my mind based on feedback from others) but my current recommendation is to lose the belief that you can accurately or usefully attribute revenue between different marketing channels.  Instead I think you should evaluate the performance of marketing at two levels:

  • Overall business performance.
  • Individual marketing channels based on success actions.

The real question that business owners and marketers need the answer to is what to do for the next campaign, not how much revenue did each marketing channel make in the last campaign.  

While that information would be great to have in order to plan future campaigns, I don’t believe it is possible to calculate. Instead the focus should be on gathering useful information that is accurate and that will allow for the optimisation of future marketing campaigns.

Evaluate overall business performance

As a web analyst, I could list off several pages of potential metrics for understanding performance across different marketing sources and several might even be valid KPIs.  But at the end of the day, only one number is going to matter and that is profit.

The measure of success of a marketing campaign is quite simply whether the incremental profit generated was greater than the incremental marketing spend (including salary costs for people working on the campaigns) during the defined time period.  A simple way of looking at things maybe but it is what the CEO is going to do.

This simplistic approach to evaluating the performance of marketing covers both online and offline marketing and also purchases made through websites or in store.  As the public is using multiple channels to research your products and then makes the purchase via whichever method is most convenient (or offers best value), this approach covers all angles and most importantly covers all customer behaviour.

Note that it does rely on a decent forecast being made of what revenue would be if nothing changed, whether this means no marketing at all or no extra investment in additional marketing channels.

This approach may also just be the best way of evaluating how different combinations of marketing channels perform. While there are numerous statistical and econometrical approaches that can be used, the business bottom line is the one true test.  Different combinations of marketing investment across multiple marketing channels can be compared between regions or different date ranges in order to determine the optimal combination.

Evaluate individual marketing channels based on success actions

Being unable to attribute revenue to marketing channels does not mean that their performance should not be measured or evaluated as successful or not. Instead of linking performance purely to purchases and thus revenue/profit, each channel should be evaluated based on predefined success actions.  

These are specific to each marketing channel based on what you are trying to achieve with the investment in that channel. This applies to both online and offline marketing channels.

The success actions can be linked to website behaviour, other online behaviour or any offline behaviour. Examples of potential success actions include:

  • Website visits from a particular traffic source.
  • Website entries on a particular landing page.
  • A level of engagement with the website (e.g. view at least two product pages) for traffic from a particular traffic source.
  • In store voucher redemptions.
  • Use of a particular hashtag on Twitter.
  • Increased brand awareness as measured by a survey.
  • Increased sales of a particular product, either online or in store.
  • Increased sales within a particular store.

These success actions need to be defined in advance as part of the marketing planning process, both what the actions are and at what level can the performance of that marketing channel be considered a success given the investment in it. It is this information that is used to review the performance by marketing channel and to decide on future investment in it.

Learn from experience

So if you want to achieve excellence in using multiple marketing channels, my advice is to measure performance, compare against forecasts and use what you have learnt to improve future marketing campaigns.

Do not try and split your revenue between marketing channels, it is just not possible to do accurately. Instead evaluate individual marketing channels against success actions relevant to what you are trying to achieve with that marketing channel.

Be prepared to experiment with different channels, all the old ones and the new ones. But look to the bottom line to understand which combinations work best. Use the data gained from previous marketing campaigns to improve and optimise your future marketing campaigns.

Graham Charlton

Published 22 September, 2010 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

Comments (3)


Joseph Pamboris

Interesting article. Many advertisers choose to pay media owners based on a cost per acquisition, or pay affiliates to drive consumers to the sale.Without some form of attribution method, or worse still, deduplication in place-how would they go about paying these advertisers?

Also, one action will generally cause a reaction across other channels.  E.g. a major TV campaign is likely to cause an increase in searches for the brand. Would you agree that we still need to see how these touch-points work together across channels; and that a user path to conversion needs to be understood. My issue being that if you can understand this path to conversion (including offline data), then it would make some sense to find some way of attributing value to each area, in order to apportion budget to each channel.

I totally agree that this is a continuous process and test and learn needs to be at the forefront of any future marketing campaign, and that there should be a greater focus on understanding the overall KPIs before running marketing activity.

about 6 years ago


Peter O'Neill

Thanks for the feedback Joseph and I don't think I am going to actually disagree with any of your comments.

My focus within the article was on evaluating performance with a view to optimising future marketing performance, not evaluating how much to pay the advertisers. In my mind, these are two different things. You could evaluate the performance of an affiliate campaign that was to drive visitors to print a voucher based on the number of vouchers redeemed (effectiveness of campaign) but pay the affiliate on the basis of the number of click throughs to the website or the number of vouchers printed within 7 days of a click on the affiliate site, etc (agreed payment trigger). Especially as the predefined success action might be at a later stage in the purchase process and therefore somewhat out of control of the advertiser, it makes sense to evaluate in different ways.

I also agree that understanding how touch points work together across channels as part of the user's path to conversion would be incredibly valuable information, I just don't think it is possible to capture data that will lead to this understanding. I gave some of the reasons why this data either can't be captured or linked up across channels and even if all of the data was available, it would be difficult to accurately tie the data to a person's (ir)rational behaviour.

Instead I think we should give up on campaign attribution as a method for optimising future campaigns (still useful for paying advertisers and regular performance reporting). The alternative I am currently suggesting is to evaluate each channel against success actions that reflect the reason for investing in that channel along with the ROI for the total marketing campaign.  The best way of understanding how multiple channels work together currently appears to me to be testing different variations (with a bit of econometric modelling thrown in).

about 6 years ago

Brett Relander

Brett Relander, Founder & President at Tactical Marketing Labs

This is the kind of post that's right in my wheel house. Although many traditional advertising firms don't want to be measured and certainly don't want to be held accountable for the success of the ads they create and/or place, that's exactly what every company should be demanding. Ultimately, if it can't be measured it can't be managed, so you should be constantly evaluating, measuring, and adjusting all of your marketing efforts. Over time you should gain the intelligence you need to fine tune your marketing strategy and have your finger on the pulse of your audience. This will allow you to spend your marketing dollars much more effectively, reduce your costs, increase your revenue, or both. Brett Relander Tactical Marketing Labs @BrettRelander

about 6 years ago

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