In the digital world we live in today, the average shopper uses at least three devices to access the Internet. Across those devices, they’re faced with a myriad of retailer engagements ranging from email offers, product ads, promotional texts, to sponsored tweets and more. The growing number of interactions before purchases has complicated the retailer’s ability to clearly track the path to purchase, let alone properly assign credit to each interaction.
"Last click" ignores the complete path to purchase
Everyone is familiar with the "last click" method, where retailers attribute a sale to a customer’s last engagement before purchase, as it’s a common attribution model. Though this approach simplifies things, it falls short of recognizing the "path" and the influence each touch point along that path has. As we all know from our own shopping experiences, there are many interactions that influence a purchasing decision.
Let’s say a person is in the market for a new pair of sunglasses. Before purchasing, she searched for them on the store’s website, returned to the store’s website after seeing a display advertisement, clicked on a promotional email where the sunglasses were featured, and received a promotional SMS message for the same product. But right before she buys the sunglasses, she decides to take a short cut and just types "black Tory Burch sunglasses" into Google’s search bar and Google gets the credit for the sale. This makes it clear that a customer’s last click (in this case, the Google search bar) isn’t always the primary influence on a purchase.
Food for thought: Where can you graduate from last click this quarter?
Is proportional credit costing you more money?
Recognizing the shortcomings of the "last click" model, some retailers are moving to assign proportional credit. This method gives partial credit to all of a customer’s interactions leading up to a purchase using one or more algorithms. In the case of the sunglass example, retailers would give partial credit to the store’s website, the display ad, the email, the SMS message, the sponsored tweet, as well as Google. Proportional credit is definitely fair – and more representative – but retailers are usually forced to pay multiple vendors, which is typically more complicated and costly.
Food for thought: Which of your vendors are taking credit for the same conversions?
Keep it simple
The most cost-effective way to solve the attribution dilemma is to reduce the number of vendors you use. The idea of using one vendor for everything is still very utopian, but retailers can work with a smaller set of vendors to consolidate the multitude of interactions. Retailers should target vendors that cover the entire customer lifecycle, from new customer acquisition to conversion and reactivation, to build a more simplified model.
Food for thought: What is the fewest number of vendors that you could use to achieve the same or increased ROI?
Using a single vendor for multiple channels is the modern answer for attribution. When you minimize vendor partners and consolidate interactions across multiple touch points, you can simplify the complicated attribution process and achieve significant cost savings.
This blog was written by Chip Overstreet, SVP of Marketing, Business & Corporate Development at MyBuys.
About the Author
Chip’s experience as an executive in marketing and business development for B2B software and services companies includes developing and delivering solutions for e-commerce, internet advertising, marketing automation and SaaS. He was previously the VP of Marketing & Business Development at Blue Martini Software (NASDAQ: BLUE), CEO of Encover, Inc. (acquired by Synnex), and CEO at RTIME (acquired by SONY). Chip has a BA in Economics from Stanford.