WHY DO MARKETERS NEED TO EMBRACE MARKETING ATTRIBUTION?
Posted by Sirine Karray on March 12, 2019
Marketing Attribution is the methodology used by marketers to measure the impact of their media and marketing activities. In other words, marketing attribution is about attributing each income/outcome stream to the right source of impact while taking into consideration synergy and saturation effects.
Marketing mix modeling (MMM) and multitouch attribution (MTA) are the two main and common approaches used to estimate and disentangle the impact of media and marketing activities on key business drivers, assess return on investment (ROI) and consequently derive valuable insight for optimal budget allocation and simulation.
MMM is a top-down approach that relies on applying machine learning algorithms on aggregate data (as opposed to user-level), extract meaningful patterns from historical data and estimate statistically the relationship between a chosen KPI (usually referred to as a dependent variable or Target) and a set of attributes or explanatory variables ranging from a wide array of channels to additional factors like seasonality, competitors’ activities, coupons, promotional activities… MMM has the advantage to be fed with both digital and nondigital channels such as broadcast television, radio, Out Of Home. MMM is therefore capable of analyzing the impact of both media and non-media factors to capture the full impact of the marketing strategy.
MTA, on the other hand, is a disaggregated bottom-up method based on collecting, tracking and analyzing individual-data. Digital attribution relies on user events or “touchpoints” such as clicks or impressions to draw the full journey from the first contact to conversion. This path tracking is supported by dedicated techniques such as cookie-based technologies allowing to mark out the path of consumers. For this reason, attribution is usually confined to digital channels.
Marketing Attribution is a pillar to modern marketing as it allows to understand and measure the true sales drivers, hence accelerating growth and keeping up with competitors by winning additional market share points. Without an effective offline and digital marketing strategy and a robust measurement platform, such as marketing attribution, brands are unlikely to appreciate which channel work the hardest for them.
As consumer screens increase, marketers struggle to understand their most effective marketing strategy. Therefore, they should leverage attribution modelling to answers key business questions like:
- What is really impacting my sales?
- What is the true contribution of each factor?
- Is my investment paying back?
- What activities should I plan simultaneously?
- Did I reach saturation?
Marketing attribution allows to answer all these questions and more and provide brands with useful insight that can be translated into weekly/daily winning tactics to achieve objectives.
MASS Analytics' Team