One of the key challenges that marketers face is how to measure the effectiveness of the multitude of marketing activities consumers are exposed to. This is even more important during economic turmoil, such as that caused by Covid-19. In these times, marketers have to be even more efficient and constantly prove the return on investment (ROI) of their activities as the budgets are stricter and pressure is higher.
This mission of achieving clear attribution is one of the reasons why marketers have been turning more and more towards online activities. Digital advertising promises full transparency and accountability but, contrary to common belief, surveys show that marketers are becoming less confident about their digital ROI. Why is that? One of the reasons is that many commonly used digital attribution methods simply don’t provide the full picture. Among them, ‘last click’ is by far the most commonly used – and also the most flawed one. It is used because it’s easy to use, but it discards all the activities that led to the final activity. This is especially important when also using offline advertising, but even when talking about online-only it overrates the impact of certain activities (in our study, by as much as 30%).
So what are the other options for marketers? There are some that provide a more precise look at attribution, but the ones that are the closest to the full picture involve cooperation between humans and AI. That way, you not only understand the full ROI but also predict the impact of your activities. Statistical modeling makes it possible to account for the impact of online and offline activity, such as mass advertising, price promotions or competitor activity. For smaller advertisers that focus on online marketing, the impact of these other activities may be small. For big brands with a broader marketing mix, however, it would be patently negligent to analyze the digital world and ignore the physical one. These activities often affect each other, so to uncover their full ROI you need to understand indirect effects.
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- What makes digital attribution so special
- The pros and cons of different methods of tackling the attribution challenge
- Six steps marketers should follow to improve their marketing effectiveness