Paid Search No 1; Retailers Stalled By Inaccurate Attribution Model

Search remains the No. 1 digital tactic to acquire customers, but attribution modeling hinders attribution and makes the whole process messy. In the 2014 Shop.org and Forrester Research State Of Retailing report, marketers cite several challenges with attribution models. While technology, analytics and organizational hurdles contribute to challenges, the biggest problem remains an inability to recognize consumers across devices and connect the data. Without the proper model, marketers cannot reallocate the amount they spend.

This keeps retailers in the dark much too often. Without the proper attribution model marketers cannot reallocate the amount they spend. The majority continue to use first- or last-click attribution models, which have several shortcomings.

Despite an insufficient attribution and an arsenal of available digital marketing tactics, 85% of retailers still praise search engine marketing as one of the most effective customer acquisition tactics. In fact, retailers spend more of their interactive marketing budgets on paid-search programs than on any others, and four of five retailers taking part in the State Of Retailing Online study spent more of their budget on pay-for-performance search placement this year than last.

Some 19% of retailers participating in the survey allocate more than half of their total interactive marketing budget to paid-search ads running on Bing, Google and Yahoo. About 17% allocate between 41% and 50%, followed by 14% at between 31% and 40%, and 19% at between 21% and 30%.

Aside from paid search, search engine optimization and affiliate programs have been the top two most effective sources to acquire customers in the past year.

Although retailers often have strict attribution windows for their paid-search efforts, 27% use same-session or same-day measures to give credit to paid search, while more than three-quarters have found their paid-search programs more effective in terms of revenue in the past year, per the study.

Collectively, with a nod to Facebook advertising, display ads rank as the second-highest category for marketing spend, with 62% of retailers planning to invest more of their interactive marketing budget in 2014 within this category, MediaPost SearchBlog hears.

More than 80 retailers responded to a survey conducted in April and May 2014. Key topics range include marketing spend benchmarks for Web retailers, priorities, mobile marketing, and attitudes toward marketing attribution across various marketing tactics.

Online retailers report they plan to increase their marketing spend aimed at smartphones and tablets in 2014, but most of that spend will go into optimizing traditional interactive marketing messages for mobile devices, such as mobile emails, mobile paid search campaigns, and mobile display ads.

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3 comments about "Paid Search No 1; Retailers Stalled By Inaccurate Attribution Model".
  1. Gary Milner from Lenovo , July 23, 2014 at 4:27 p.m.
    If viewability isnt part of the attribution process then the display/video impact is likely way overstated.
  2. Kevin Lee from Didit , July 23, 2014 at 5:07 p.m.
    Clearly there is room for improvement. Search landing pages also contribute to brand lift which often means the impact of paid search on the important branding metrics is under-counted. I was surprised to see it stated that " the biggest problem remains an inability to recognize consumers across devices and connect the data." Either geographic split tests or longitudinal split tests can absolutely prove the impact of different channels and campaigns. A full econometric model is not needed.
  3. Krillion by Local from Local Corporation , July 29, 2014 at 7:08 p.m.
    This is interesting data. But, it leads to a much important question. When those retailers are spending money on search ads, do they have mobile-responsive websites or landing pages for the vast numbers of consumers who are doing those retail-related searches on their smartphones or tablets? If not, they're funneling money into search advertising without catering to mobile consumers, which would be missing a huge opportunity. According to our research, 72% of consumers conducted retail-related research on their smartphone or tablet prior to making a purchase at a local brick-and-mortar retail location. We agree that attribution is a huge issue. But, delivering a seamless mobile experience to those consumers researching product purchases on their mobile devices is vital for retailers to succeed in today's mobile-retail world.