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Not since Google plumped for pay-per-click sponsored listings in 2000 has ‘The Big G’ made a decision as strategically significant as its recent commitment to path-to-conversion reporting in the guise of ‘Multi-Channel Funnels'.
The story goes that it wasn’t until the last minute that Sergey and Larry decided against carrying banner advertising in the hunt for revenue and chose instead the PPC bidding model pioneered by GoTo (which became Overture). Had it stuck to its guns, the digital marketing industry would be a very different place now.
But, Multi-Channel Funnels is, in my view, as fundamental a step as the launch of AdWords because going beyond last-click reporting and attribution seriously undermines that very model.
There is no question that attributing digital sales to only the last click in the purchase journey has served to overestimate the contribution of paid search. When we have finally made a decision to buy online, the large majority of us conduct a search to seek out the business from which we plan to buy.
By that stage in our journey, we’re not interested in whether the result is paid for or delivered by Google’s brilliant algorithm, we just want to get there. Paid search thus accounts for a large number of last clicks and a disproportionate amount of credit and marketing spend.
Outside its search engine and AdWords, I would make Google Analytics the company’s biggest success. It is an incredible tool to be able to use for free and delivers the kind of insight to smaller site owners that used only to be available to large e-commerce players.
Its launch was also brilliantly conceived; it said ‘if we can show advertisers just how effective is paid search, they’ll do more’. But, by adding path-to-conversion insight to the reporting of this brilliant tool, Google will achieve precisely the opposite. After all, once our clients have path-to-conversion insight in front of them, their first decision is almost always to reduce paid search spend in favour of things like SEO and display.
So, why would Google launch (in limited pilot) reporting that shows the other things customers do on their way to buying?
Firstly, Multi-Channel Funnels will enable Google to claim some ownership of the demand for beyond last-click thinking and, perhaps more significantly, drive some of its development in its favour.
Until now the entire debate has occurred with Google sat ominously on the sidelines. As soon as it became clear that attribution models other than last click were likely to take hold (about this time last year), Google had to enter the fray.
By providing its own version of path-to-conversion insight Google can better lock in its AdWords and Analytics account holders to its own system and control the transition to a much greater extent.
Second, although PPC is by far Google’s biggest earner – let’s say 90% (I’m guessing) of all the ad revenues it generates – it does control enough of the display landscape (and SEO ecosystem) to have an interest in giving people a fuller view of how other channels contribute to a sale.
DoubleClick and YouTube (as well as natural search) are both likely to benefit from that view, particularly if it is Google’s version. While those revenues are not likely to replace, at least in the short-term, the money-printer that is AdWords, it can take solace in probable display revenue growth.
Most of all Google Analytics had to remain relevant as advertisers move to systems that enable complete path-to-conversion reporting. Attribution has become the single largest topic of conversation among digital marketers in the last couple of months.
The trade press have picked up on its significance and the message is filtering through. Last click is by no means dead, but this is certainly the beginning of the end. The issue is now about what will replace it and, understanding this, Google must have a stake.
Still, adding ‘assists’ to Google Analytics must have been a significant undertaking and suggests that Google shares our view that last-click attribution is losing its relevance.
It will certainly help spread the message that there is a better way to track marketing spend and it will be fascinating to see, not only how quickly others follow, but also how Google seeks to evolve to be just as successful in a post last-click world.