The primary reason for the lack of sales attribution is that marketers have failed to recognize digital could serve both as a consumer touch point as well as point of sale.
One of my clients brought up a very interesting question recently: Should all brand activities online drive to e-commerce?
It's interesting because it shows marketers' increasing focus on proving digital marketing ROI.
Let me explain. Marketers have always treated digital as another consumer media touch point. Hence they were content doing branding campaigns, social media, and numerous other activities that win them awards at Cannes.
It's no surprise that marketers have invested heavily into branding campaigns online, because it's merely an extension of what they have been doing in traditional marketing. In traditional media channels like TV, magazines, and OOH (out-of-home), it's hard to attribute marketing to sales but it was all taken in good faith that marketing indeed drives hypermarket sales.
However, digital marketing was born with data in its genes, therefore a lot more measurable than traditional marketing. So in recent years, marketers were happily measuring metrics like engagement, buzz volume, and online reach. But even with these metrics, we're unable to tie digital directly to offline sales.
The primary reason for the lack of sales attribution is that marketers have failed to recognize that digital serves both as a consumer touch point as well as point of sale. For example, most digital campaigns will direct ads to either a brand site, social media page, or media campaign site. While these campaigns engage consumers, we can't prove the correlation between online buzz volume and engagement to sales. However, if we drove digital consumers to e-commerce, then we can treat it as a POS channel and establish concrete metrics like CPS (cost-per-sale).
With more and more brand marketers focused on ROI, e-commerce is becoming the channel to tie digital directly to sales. My perspective is that brands should absolutely drive more online activities to e-commerce. By driving ad traffic to e-commerce, marketers can no longer hide behind objectives like "branding" and "engagement." We would measure all digital activities based on ROI, and in turn become more accountable as marketers.
However, I do not recommend marketers go to the extreme by removing online branding campaigns completely. At least not until one day we can definitively prove that online buzz or engagement does not contribute at all to offline sales. Traditional marketing have gone on for ages without direct linkage to sales, and digital should be no different.
For marketers who are serious about ROI and e-commerce, my advice is:
1. Don't underestimate e-commerce for your brand by comparing online sales to hypermarket. Brand-owned B2C websites or Tmall shops sales wouldn't ever be the same scale as hypermarket.
2. Reduce your branding campaign budget and reallocate specific media budget to drive to e-commerce channels. Then set KPIs (key performance indicators) based on sales and ROI.
3. Always have links to e-commerce in the interactive campaign sites and social media pages. If the brand runs its own e-commerce website, then the analytics tools can measure the entire conversion funnel. Focus on lower funnel channels like search to increase conversions and lower CPS.
4. Don't treat e-commerce as a pure sales channel. Branding and engagement mini-sites can also be hosted on B2C e-commerce channels like Tmall and Yihaodian. Of course, the creative would all have to skew toward sales promotion.
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Currently digital director for Mindshare Beijing, Charlie has over five years of experience covering both IT consulting and ad agency industries. He was previously technical director at Tribal DDB Hong Kong, where he led the implementation of analytics and technical innovation across digital campaigns. His previous experiences include data analytics director at Bizcom Consulting in Beijing, and business intelligence analyst at Deloitte Consulting in the U.S. Charlie's project portfolio includes digital analytics, digital campaign production, marketing data integration, as well as large scale data warehouse implementations. He has worked on numerous digital accounts including: McDonald's, Manulife, Wrigley's, Smart Communications, Financial Times, and Friso.
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