Kill last touch attribution and boost ad spend return, claim academics

Single touch attribution models are favouring email while downplaying the importance of television and print marketing campaigns, a study by Monash University’s business school has found.

The study by Monash professor of marketing, Peter Danaher and Harald van Heerde of Auckland’s Massey University suggested a more intelligent allocation of media spend could deliver 25% more effectiveness than a strategy based upon last touch attribution.

Marketers use attribution modelling in an attempt to work out which advertising message actually delivered a sale. Using that approach attributes the last site or ad seen for delivering the entire sale. It does not take into account the effect of any previous messages seen.

Monash University professor of marketing, Peter Danaher, claims looking beyond first touch attribution can give marketing campaigns a 54% effectiveness boost.

Despite the known limitations of last touch attribution, the academics claimed 54% of ad agencies and advertisers were still using the measure to allocate marketing resources.

In rethinking how marketers allocate digital dollars, the researchers proposed a better solution was measuring the number of touchpoints during the customer’s purchasing journey.

“When you buy the latest headphones or pair of shoes online, the chances are that savvy marketers will analyse your email and internet searches to see what drove your purchasing behaviour,” the researchers said in their paper released last week.

“At the moment, if a consumer buys a new toy online, Google can look at the search patterns that person has had over the past few days, or whether they’ve received any emails from a department store such as Kmart,” said Danaher, the head of Monash Business School’s Department of Marketing.

“They use a method called ‘last touchpoint attribution’. So, if the consumer last opened an email about toys, the email gets the credit. It they last did a Google search on toys before making the purchase, Google gets the credit.

“The advertising industry has used this method for the past five years because it’s simple and effective. The problem is, this method ignores how long consumers remember an advertisement.”

Previous studies have shown the effectiveness of channels such at television and radio commercials along with traditional print channels such as mail catalogue advertising, but the attribution method ignores this, the two researchers said.

Single Point Attribution also gives skewed information to advertisers and favours emails which have the benefits of being cheap and come out at 10 or 12 times, the researchers claimed.

“This means that businesses are spending up to four times more on email and online advertisements compared to print or television, because they think this is where their market is located. Television and magazine advertisements are far from useless in selling products,” stated Danaher.

Danaher argues that instead allocation decisions should be made using formal profit optimisation which takes into account the cost of a method of advertising when allocating budget to it and measures the incremental impact of different types of advertising on the actual purchase outcome.

“Even if there is a zero purchase probability effect of a medium, attribution methods that are based on counting the number of exposures prior to making a purchase will attribute a significant portion of the purchase to that medium,” Daniher said.

As part of the research Danaher has developed a new “future media allocation” strategy that takes into account advertising costs, budget impacts, and the impressions each advertisement makes on the actual purchase outcome.

“It also takes into account the carry-over effect, or how long the effectiveness of a particular form of advertising may last,” he says.

“As advertising becomes more dynamic in an effort to capture those no-fuss consumers, it’s critically important for companies to get their marketing strategies right.”


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