Multi-channel marketing businesses face a challenge that is more difficult to solve than is immediately apparent: how to attribute a given sale across the various marketing channels that may have influenced it. There are several methods currently used to address the problem. Among the most common are:
- Last-Touch Attribution: the current de-facto industry standard, this method gives full credit for the sale to the last marketing channel to “touch” the customer. Last Touch has the advantage of simplicity, but even marketing planners who employ it lack faith in the conclusions.
- Double Counting: in many organizations, every marketing channel that had recent contact with a customer before their purchase takes credit for all or some of the sale; in most cases the sum of sales claimed by all marketing channels exceeds 100% and can add up to as much as 150% of actual total sales.
- Arbitrary Parameters: in an effort to allocate a sale more fairly, some organizations choose to weight first touch (customer acquisition), last touch (closing), and intermediate touches disproportionately. While this appeals to our intuition, the different weights are assigned arbitrarily.
Last-Touch Attribution is simple to calculate, but in a multi-channel marketing scenario it favors the channels with the most frequent touches. For instance, a typical customer might receive a dozen emails over the course of 3 months, during which time they received only one catalog, so at the moment they buy, it’s much more likely that their most recent known contact was via email. Double-counting avoids a fight between marketing departments but causes headaches higher up the chain. Arbitrary parameters are an approximation in the absence of evidence; this seems compelling but often does not reflect reality.
Click here to read about how the team at UpStream has attacked the problem.
