Marketing attribution is the science of measuring whether a marketing activity is successful. In a survey conducted by Forrester Research, 50% of the respondents said measurement remains the hardest part of marketing. Additionally, 51% are dissatisfied with how they measure marketing ROI. (Source: Marketing Profs)
There are a number of synonyms that all mean marketing attribution. Closed loop marketing, marketing metrics, marketing source, marketing influence all refer to this activity. The goal of all these are the same. To understand which marketing activities are most successful in growing revenue and reaching customers.
Marketing is the hardest function in the business to measure and prove value. Why? Well these activities are just one of the many things that move the buyer along their journey. Most marketing activities that organizations track start after the buyer’s journey actually begins. Add to this, that only 17% of 136 executives and marketing professionals indicated that their CEO would give marketing an ‘A’. Marketers are struggling to quantify their value. It’s not just about the number of new prospects they are bringing in. It’s also how effective they are in moving buyers through their buying journey.
To understand which activities to invest in:
Marketing is a heavy spend area for companies. It’s also an expensive mistake if they decide to invest in activities that are not effective. Measuring the return on investment is key to understanding which activities to continue doing.
To generate and keep more customers:
The goal of marketing is to move buyers through your buying journey. From prospects to customers to repeat customers and ultimately referrals. Analyzing all the activities that buyers do at various stages helps the company better understand the customer.
Why is attribution so difficult?
- Marketing is not causal, it is correlational
Though marketing is a science it is almost impossible to prove causation. In other words, it is very hard to prove that a buyer decided to buy because of one specific marketing activity. The buyer is discovering and researching, both online and offline, during the decision making process.
- It is not a single activity that makes a person buy
The larger the value of the deal, the more research the buyer will do on it. An average decision maker consumes five marketing campaigns before being ready to even speak to a sales rep (Source). Trying to measure the contribution of a single marketing activity leads to false conclusions and can inflate marketing’s contribution.
- Marketing systems are not set up to capture an end to end view of the buyer
Research is everywhere. And although it can be found online and offline, it is hard to get that one comprehensive view of the buyer. A view that encompasses all the activities a buyer is making as part of their decision making process. Further, people think that the buying journey ends when the buyer becomes a customer. In reality, the journey is just beginning. It should continue until the customer becomes a loyal and repeat customer. Better yet, a raving fan that brings in more referrals.
How to think about marketing attribution
Tie goals to the buying cycle
Marketers tend to define marketing attribution as the effectiveness of a single campaign. Metrics for this include the number of new prospects, conversions, new customers, retention, etc. This is usually the same across all campaigns. Metrics for each campaign should be tied to the buying cycle stage where the campaign is targeted. The goal of your marketing campaigns should not be to focus on the single campaign. The real focus should be on the whole buying lifecycle. (Source: Why your marketing funnel is broken)
Capture information about the prospect, their stage and the activity
This does not end when the person becomes a customer. Keep everything you know about the customer in one spot. in a way that you action this for more targeted communications.
Measure the effectiveness of a set of activities versus a single activity
Think of grouping activities and not just looking at the ROI of one single activity. Focus on learning what that path is for a particular kind of buyer. Help them get through their decision process and staying on to become a loyal customer.
To sum up, focus on capturing as much information as you can about the buyer. Instead of measuring individual marketing activities, understand and measure progress in the buying cycle. Look at combination of activities versus just single activities.
Think of it like planting a tree that has the potential to flower. First you buy the seeds and the mulch. You plant the seeds, then the combination of water and sunlight helps the tree grow and blossom. None of these activities individually are responsible for the tree blooming. But doing certain things at specific stages in the lifecycle of the tree helps it grow and bloom. Understanding what the plant needs at each stage is key. Focusing on the right combination of activities will lead to successful, beautiful flowers.