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Thinking About Conversion, Upside Down
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Thinking About Conversion, Upside Down

Let us imagine the traditional multi-channel funnel – a triangle shape, wide at the top, thin at the bottom. A typical user filters through a number of touch-points before being converted to a sale. We would expect to see certain types of sites in that journey. Perhaps organic search queries first, followed by comparison sites, then with the user returning later through brand paid search, before perhaps being converted finally through the affiliate channel with an incentive like cashback or a voucher code.

Once we see the multi-channel journey, we can figure out how to attribute. Case closed.

But what if that wasn’t the end of the story? What if we can think about that path carrying on, in the same triangular, funnel shape, but inverted? There is a much wider story to tell once the sale is made because, when a customer is delivered, the advertiser gets a far wider view of what value that customer represents than the publisher ever could, simply because the publisher loses sight of the customer at that point - it’s over to the advertiser. Only the advertiser knows the profitability, retention/churn rate and lifetime value of that customer.

My argument here is that it is precisely that post-conversion picture that our channel should be focused on.

Path-to-purchase Focus

Everyone talks about attribution. The session on cross-channel attribution at this week’s Performance Marketing Insights was standing-room only. But it is lamentable that most attribution models focus so heavily on the pre-conversion funnel. This means that the attribution discussion far too often revolves around the path to purchase.

Attribution is a fashionable problem to have, and usually the pitch of a solution goes as follows: ‘We can attribute over all channels because we see all the touch-points that the user takes in their path to purchase.’ I even heard one speaker at Performance Marketing Insights claim that affiliate marketers don’t want to talk about attribution because their model is to capitalise on the last click.

But how is that a criticism of our industry? Affiliates are conversion experts. It is what we do. Our job is one of acquisition - we get you sales, leads, downloads, sign-ups, we make your phone ring, and that’s what advertisers pay for. If that does not happen, they don’t pay us. That necessarily means optimising towards the bottom of the funnel.

What it does not mean is that affiliates are ‘stealing’ sales from other channels, or from each other. That conversation is very 2008 - there is no such thing as an affiliate ‘stealing’ sales when the user’s journey has fundamentally changed, becoming more fragmented and dispersed. That the largest publishers are bigger than the brands they promote is one effect of that from which our industry profits.

Moreover, if – as we are constantly reminded – the user’s journey is increasingly across mobile, but there is no solution to cross-device attribution, how can we ever claim to be able to properly attribute affiliates on a pre-conversion basis?

What about post-conversion data?

Certain exponents of attribution modelling might feel the post-conversion picture harbours very inconvenient truths. As a result, many of the assumptions about attribution of affiliates ignore the post-conversion picture. When a customer converts through the affiliate channel the affiliate has done his or her job. They have delivered a customer, and beyond that point they rarely get visibility. It’s up to the advertiser to share data on the profile of the customers they refer.

This is a problem for our industry. In my view it is one of the biggest problems. But it was heartening to hear at Performance Marketing Insights an almost universal agreement about the need to share data advertisers-to-affiliates. In my own panel, one audience member asked what we can do right now as an industry to address the problem of the perception of our industry. In my view, it is to share exactly this kind of post-conversion data, right off the bat. Our channel should be judged on the value of the customers it drives, and it is through post-conversion data that our industry proves its own.

Let’s take one example – churn. It was great to hear Anna Pember of npower say at Performance Marketing Insights that cashback sites outperform brokers in terms of customer churn. Anna knows what she’s talking about - she’s crunched the numbers on this key post-conversion metric for npower, channel-against-channel, and affiliates win.

It is these kind of wins we need to shout about more. For an industry that specialises in the call-to-action the need to share data on post-conversion customer value should be a resounding call-to-action.

The bottom line is this: If you are an advertiser, your multi-channel attribution model should be looking not just at where your customers come from but how valuable those customers are once they arrive. On that measure, our industry stands or falls. If we as an industry cannot demonstrate that we deliver incremental, high value customers, the game is up.

But if we can, we have the right to be incredibly optimistic about our future.

Continue the conversation

Got a question or comment – tweet Owen @owenhewitson or comment on Twitter, Facebook or LinkedIN.

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Owen Hewitson

Owen Hewitson

Owen Hewitson is Associate Director in the Performance team at Starcom MediaVest. He oversees the management of performance marketing campaigns for some of the world’s biggest brands and a team of experienced affiliate specialists focused on clients' acquisition-based activity. He began his career in performance marketing in 2007 at Affiliate Window, working first in the account management teams and later as a Client Strategist. He has spoken at a number of events in the UK and Europe and contributes regularly to industry sites and publications.

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