Contentious doesn’t begin to describe the debate currently waging in all corners of the performance marketing world. Its subject? Attribution. While this is certain to be an important innovation in the performance space for 2012, widespread discussions about how best to implement an attribution solution are still on-going.
Attribution is all about awarding different parts of the marketing process differing levels of commission. The level is decided by analysing the role that each form of marketing played and how much it contributed towards the sale. It’s a complex notion, and there are multiple companies geared toward analysing the different levels and marketing forms.
You’d think that the ability to understand the true journey of a customer would be really advantageous to advertisers. They’d be able to tailor their various marketing channels to focus on certain demographics – something that could only benefit all marketers, whether online or offline.
However, there’s still a reluctance to banish the ‘last click’ technique to the past. Part of this is down to the worry that certain channels will be revealed as offering very little to advertisers. Attribution isn’t a tool for discovering winners or losers – last click serves this purpose well enough. Some say that attribution should instead be used to discover the amount of sales that result gained if you feed marketing budget into the top of the funnel. In the end, it’s all about making sure that the customer is involved in a successful journey.
In an attempt to discover what was holding travel advertisers back from adopting an attribution solution, we asked six key players what concerns they had with implementing one across their programme.
Adopting an attribution solution is a key area for advertiser focus in 2012. What are the main concerns with attempting to implement attribution across your programme?
Daniel Morley, Marketing Director, alpharooms.com
“Affiliate communication and network understanding. We use an attribution model across all channels already and have done for the past five years. When an affiliate is paid their commission on a sale, we know the ‘true’ value they have played in converting that user, alpharooms.com and DC Storm know this. The affiliate network and affiliate would have to take our word for it – I don’t think either party would be prepared to.”
Charlie Ranger, Online Marketing Manager, TUI UK
“There are a number of concerns/barriers that we are trying to overcome into putting in place a full attribution model for one of our clients.
Cost – While we wish to reward publishers according to their contribution, we need to ensure the overall spend falls within acceptable limits.
Reporting – How best to report and analyse the data has proven tricky. For attribution it is most likely that we will pay a contribution to the final contributor as we have done in the past, but then batch for contributing publishers.
Finding balance – In reality, what is the significance of each impression in the path to conversion? Is the first impression more significant than the second to last? What role do voucher and incentive play?”
Aurelie Vicente, Web and Affiliate Marketing Manager, Thistle Hotels
“With attribution, affiliates can be rewarded at various points on the model, so ‘cookie-stuffing’ immediately becomes more of an issue; as now third parties will aim to cookie-stuff along the entire attribution model and not just the last click.”
Thomas Bournac, Club Med UK
“With most businesses adopting a more multichannel approach, new ways need to effectively and accurately attribute sales and influences need to be addressed. The main barrier in our case is a technologically archaic system that is not compatible with many of the new tracking advancements.”
Michael Stellwag, Manager E-Marketing, Qatar Airways
“We need to know the data is accurate and fair. We just don’t want to pay twice, and must prove the solution works without fail.”
Elise Newman, Global Head of Affiliate Marketing and Meta Search, holiday autos
“The key for me is that it is a value attribution, and to create a fair model you first have to assign a value to each click. These are some of the questions that I’ve been struggling with:
- Is the number of clicks in a journey important?
- Is the order in which the clicks happen important?
- How much channel crossover is there?
- How important to introducing new customers is each channel – and how good are they at closing the deal?
- Are some customers more valuable than others – eg, new verses existing, frequent vs lapsed?
- How do you overlay your customer lifetime value model to your multi-attribution model?
- Do some channels or affiliates aid in other value-adding areas – such as improving customer retention or loyalty, or increasing Average Booking/Order Value?
- Do you consider some different actions on different sites important – for example if a customer finds and uses a voucher code on a voucher code site – or whether they just click through anyway, or how long their click to book times are? The IAB guidelines around voucher codes have gone some way to improving this situation, as there is greater regulation round how codes and offers are displayed. However, while you still have code sites that actively encourage customers to try an old code because it might still work, the waters are still murky.
- Do you hope to use multi-attribution to improve your acquisition and retention channels rather than just make savings on how you currently behave and reward?
Even if you can answer all of these questions, you then have to consider how you are going to implement it technically and transparently – and how you are going to communicate it to your partners, because its going to be a far from simple message!
As costs from some channels are fixed and multi-attribution is not an option for them, it seems that affiliate is going to be the hardest hit by this type of activity. PPC and CPC costs are not going to be negotiable, but maximum CPC levels could be set potentially.
An alternative is to offer different reward structures within your affiliate programme – such as CPM or CPC hybrids for sites that would be hardest hit by a multi-attribution rather than pure CPA – in an effort to reward affiliates that are introducers rather than closers. But again this relies upon your ability to identify the most important actions or interactions. Between affiliates, cookies with more conditions and hierarchies are being introduced, so to an extent it is being looked at; however, to the best of my knowledge nothing much is available multi-channel. There is also the possibility of using your channel analysis to group your affiliates and reward them according to the general behaviour of that group – setting their commission at a level sustainable level that compensates for the value of the interactions they bring as a group. There will still be exceptions that will fall outside of a model like this, but it has the advantage of moving some way to improving your marketing efficiency while maintaining a clearly defined commission structure where affiliates are clear on their earnings.
The biggest difficulty is defining your objectives, gathering the data and then interpreting that data in a useful way to define your strategy. There definitely needs to be a period of gathering data and careful analysis into who your most valuable customers are and how they are obtained at present. It will inform how you define what the most important actions are in a customer journey and how can it be influenced. So although there are potential benefits in cost-saving from more efficient and streamlined marketing through better understanding and application of analytics – the human element cannot be underestimated – an over-vigorous de-duping or variable-commission structure on your programme is likely to alienate your partners, especially if your competitors offer a more straightforward approach.”
A4u Travel in Performance Marketing Report
A4u will be launching its travel report, in association with Commission Junction, on Monday. The report will cover wide-ranging topics that are certain to be of interest to any travel company involved in the performance space. There will be figures including those detailing revenue generated on travel programs in the affiliate channel during 2011, information showing affiliate channel vs total online marketing revenue and also stats on longtail affiliate revenue.
Plus, we questioned a number of advertisers about the results of this survey. Make sure you check A4u after the weekend where you’ll be able to download the full report.