Full-Funnel Attribution Is Better for Everyone - Even Search Marketers

  |  March 30, 2011   |  Comments

The most likely way to grow sales is to widen the funnel, not aspire to be a cylinder.

About 10 years ago, I worked at a small agency in Los Angeles. Every day on my way into the office I would pass billboards near one of the busiest intersections in the world (the 405 and 101) and think about the millions of people that saw those ads every day. And I wondered how effective they were. The truth is that no one really knows. It's too hard to know with billboards. However, there is still much-awaited hope for online advertising.

I was thinking about this concept on Sunday when I noticed that Donald Trump's "Apprentice" is miraculously still on the air. For the brief few minutes I watched and even smaller period where I was refraining from jeering the contestants or the host, I saw two celebrity teams running separate pizza shops and competing to sell the most pizza in a day. The formula was pretty simple. There were some contestants passing out flyers, some dialing for dollars, some making pizzas, and some ringing the register. The teams did well when all parts were moving together and in cooperation toward the common goal.

In the end, it's pretty difficult to say with precision which touch point really converted the customer. The truth is they were all important, which is partly why it was so easy to see which player was dropping the ball.

In online advertising, last-click (aka post-click) attribution has become the standard. In our world, the roles are not as simple as the pizza world. They're not so clearly defined, and it's harder to determine which roles are essential. However, there are a few things that are clear.

It's clear that search marketing works. Search is the only channel with most of its dollars spent on the bottom half of the funnel because search is the only channel where customers are knocking on your door saying in effect, "I want to buy this product."

It's also clear that last-click attribution is the simplest and easiest model, but it's not the most effective. For years, the various online channels have been competing with each other for credit, and to date search has won on a relative basis because search gets the last touch most often.

Meanwhile, marketing dollars sit in less effective offline channels because we haven't been telling a holistic story to CMOs and the likes.

It's also clear that in online advertising we have more data points by orders of magnitude, not to mention the many more buttons and idiomatic marketing levers. This means that in our world we can test, measure, and actually often have statistical confidence about which drivers matter to our freeway billboard equivalents and who really contributes most to our pizza-selling machines.

Just as in our simple pizza metaphor we shouldn't give all the credit to the guy ringing the register, as an industry we shouldn't give all the credit to search.

Moving away from last-click attribution is more accurate and better for marketing companies too - even search marketers. Here's why:

As marketers, if we only pay guys ringing the register, no one is going to pass out flyers, no one is going to dial for dollars, and no one is going to make pizzas. Said another way, if we try to turn the funnel into a cylinder our marketing funnel shrinks and so do sales.

Instead, we want our businesses to grow by making more pizzas, selling more pizzas, and ringing the register more often. When display, social, and the other top-of-the-funnel channels do well, the funnel widens and companies grow and marketers get bigger budgets. The most likely way to grow sales is to widen the funnel, not aspire to be a cylinder.

As the paid search landscape has become more competitive, there is a clear opportunity for companies to get more spend and find advantage by buying with a more holistic view. This principle can even be applied when comparing brand term performance to closing term performance. Marketers need to measure how top of funnel events affect bottom of funnel events.

This level of insight is especially true in behavioral marketing because inside of behavioral marketing and remessaging is the best place to put those insights to work.

My advice - first, start measuring your performance with other channels. Second, measure conversions and other quantitative success metrics with something more than last-click or last-view attribution models. As you see your impact on other channels, you will make better marketing decisions.

If we widen the funnel, everyone wins - even search marketers.

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ABOUT THE AUTHOR

Jeff Green

Jeff started his Internet career working for a small interactive agency, where he led media buying and trafficking and managed all vendor relationships. Afterward, he founded a CPA network, eBound Strategies whose technology was designed by Jeff and later acquired by Nami Media in 2003. Jeff worked for Nami Media as the VP of operations, and subsequently left to found AdECN, the first exchange for online advertising.

Jeff is considered one of the few pioneers of the ad exchange. As COO and founder of AdECN, he led all strategy, product, and business development. Jeff is a thought-leader in real-time bidding technology. At Microsoft, Jeff oversaw AdECN exchange business, ran all reseller and channel partner business, as well as advised the all-up strategy for the online services division. In October 2009, Jeff left Microsoft and AdECN to found The Trade Desk.

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