The Question Every Marketer Must Answer
Recently, Optimization Group’s Director of IT, Jim Kenyon, was featured in an edition of Quirk’s Magazine. Jim took the opportunity to speak on a common mistake marketers make in their efforts to measure marketing ROI. In short, marketers have a choice to make. Do they want to be precisely wrong OR generally accurate? This plays itself out practically when marketers make the common mistake of “last click attribution” (e.g. giving the phone company full credit for a phone-based sale). In reality, there are multiple influencers on the “phone-based” sale. In the article, Jim discusses how companies can begin to untangle the sales attribution process and begin to make more accurate business decisions. Here’s a snippet of Jim’s aticle…
Precisely Wrong or Generally Accurate?
By Jim Kenyon (Originally published in Quirk’s Magazine)
For as long as businesses have been advertising, they have been asking “Is my advertising working?” John Wanamaker, the 19th century retailer, is credited with the oft-quoted quip: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Fast-forward over 100 years and businesses are still looking for ways to understand whether their advertising efforts are working and, if so, which ones and in what combinations.
These are difficult questions to answer, primarily because it is hard to know what advertising has reached a given consumer, much less in what order. In an ideal world, a business would know what advertising, in what sequence, each consumer, transactor or not, has seen. With this data, one could try multiple techniques to suss out the contribution of each component. But the world of commerce is not ideal. A business does not know the entirety of ad exposure of potential customers.
Some businesses – notably those that operate primarily online – like to use last-click attribution for sorting out the utility of advertising efforts. Google, the hegemon of online advertising, even promotes last-click attribution in its Google Analytics platform. It sounds sexy, the tool looks high-tech and, heck, Google is suggesting it, so it must be good, right? Not so fast. Just because something is easy to do, has a high-tech-looking interface and comes from a market leader does not make it accurate. In fact, one should consider whether the tool promotes more AdWord spending or delivers useful results.