As a marketer you’re well aware that your customer’s path to purchase is becoming increasingly more complex. If you’re feeling disconnected from their path, you’re not alone. We recently surveyed 200 Australian marketers* and identified a serious knowledge gap when it comes to cross-channel marketing. Only 14 per cent of marketers stated they actually understood the process.
An even smaller 9 per cent believed they were successfully extracting insights from their data that allowed them to better understand their customer’s path to purchase. New technology means your customer is well practiced in the art of retail research. Traditionally, a customer may have watched a TV advertisement while making dinner, seen a coupon while browsing supermarket catalogues and finally purchased the item on their weekly grocery shop. Today, they see a great pair of shoes while scrolling through their Instagram newsfeed, immediately jump online to find them, realise they are out of their price range and turn instead to Vogue Forums to source an alternative. They may visit a store to try them on or simply buy them online and hope for the best.
You can see the cumulative impact of all channels and therefore attributing success to any one process may seem like congratulating a team captain without acknowledging the hard work of the team. However, it’s unlikely that you will have the capacity to allocate budget equally across all channels. Experian’s research suggests that marketers currently utilise 17 channels in the offline and online space and have great difficulty deciding which are the most important or effective.
When asked what the single most challenging cross-channel marketing issue is, 29 per cent of marketers suggested response attribution and 27 per cent flagged budget allocation. While it was once possible for marketers to attribute responses directly to their marketing efforts, for example the unique code on that coupon surrendered at purchase, the attribution process has become more complex. If 91 per cent of marketers aren’t extracting insights from their data, then they may be relying on basic rules, such as last-touch attribution, in which 100 per cent of the credit for sales is given to the final touch in the sequence. However there are several different approaches available to marketers in order to determine channel ROI and to obtain fractional allocation across multiple channels:
- First interaction, last interaction and position based assign attribution based on the position of a touch point along a typical touch path.
- Linear treats all touch points as equally effective and attributes conversions evenly.
- Customized allows an arbitrary attribution scheme that reflects managerial judgment on the position of the touch point, touch point type or traffic source.
- Time decay systematically assigns a higher attribution weight to a touch point that is closer to the final conversion. These time-varying weights decay over the duration between the time of a touch point to final conversion, and the speed of decay can be controlled.
At Experian Marketing Services, we take cross-channel attribution a step further by integrating established approaches with our online/offline data assets, offering a menu of progressively customized attribution solutions including the following:
- Direct Attribution is applied when responses and actions can be uniquely linked to a channel.
- Inferred Attribution takes advantages of Experian data matching technology to link campaign histories with responses at an individual level and infers attribution rules from the estimated relative impact of each channel on customers.
- Fractional Allocation allows a marketer to assign and adjust prior channel importance measures, data matching quality indices and time-decaying factors in deriving attribution weights.
- Touch-Point Attribution is a completely customized solution in which a marketer’s individual-level online/offline campaign data are merged with Experian data to obtain attribution rules that reflect the effect of campaign frequency, recency and channel interaction.
These processes vary in sophistication and therefore do not exclude marketers who lack the resources to utilise the more advanced options. A sensible solution is to start small and graduate to more sophisticated techniques when budget and time allows.
These advances are all working towards creating a rich customer centric vision that provides you with a more holistic view of your customer and their path to purchase, and that’s where marketing should be heading.
* The Experian Marketing Services whitepaper, Making the most of your data, will be available on the Experian Marketing Services website late August. The whitepaper provides information and statistics on cross-channel marketing in Australia.