Understand The True ROI Of Online Marketing

Because online media is so trackable by its very nature, advertisers have come to expect detailed, precise campaign reports from their digital agencies. Online advertising allows for real-time tracking of impressions, clicks and conversions. However, this granular level of visibility can actually serve to distort the measurement of digital media's impact, to the exclusion of all other contributing factors.

This lack of proper attribution, often referred to as the "last-click" model, has become a major issue. Without knowing to a greater degree of certainty the role various online and offline factors play in leading to a conversion, marketers cannot make the most intelligent media buying decisions. Further, failure to take advantage of the synergistic effects among media vehicles means lessened effectiveness and lower longer-term ROI.

View-throughs -- i.e., when a conversion is tied through a cookie to an earlier banner impression not clicked on -- go one step beyond the click-through, where there is an immediate, trackable action. By tracking from an online impression view-through to the ultimate transaction, some attribution is rightly assigned to the display ad. While view-through measurement can capture the impact of display impressions, a critical shortcoming of this approach is that it ignores the impact of any offline media. For this reason, view-throughs can also lead to over-attribution of conversions tied to digital media.



Digital agencies generally do not take into account baseline brand awareness or brand equity or the impact of any offline media on online transactions. This is done despite the fact that studies on click-through rates for online display media show higher response when supported by a TV campaign. However, when digital agencies create their dashboards, they fail to account for the effect of offline media on online performance. The online tactics get the lion's share of the credit, thereby creating a distorted view of actual contribution across the marketing mix.

Based on MMA estimates, online media can be taking credit for as much as 15% of online conversions that were actually driven by offline marketing executions. Most marketers do not have dashboard tools for precise tracking of offline media effects, so they tend to put more stock in digital metrics. This leads to not only mis-attribution, but also to media mix decisions that are not reflective of the true ROI of each medium.

Ways to Solve the Attribution Problem

Here are a few suggested steps for marketers to balance out attribution in a more equitable fashion:

• Don't treat any one medium in isolation: Marketers need to account for the complex interactions that occur among all the different media and the fact that consumers are exposed to and interact with their brand/products in a variety of ways. This is the beauty of marketing mix modeling. It accounts for not only the media contributions but all the other factors influencing sales, including operational factors, seasonality, competition, economy, etc.

• Execute test market "heavy ups": Run media tests in one market that go "heavy" on a particular media element (digital, TV, radio, print, etc.) and lighter on others, while running simultaneous tests in other markets that saturate on different vehicles. Afterward, measure the resulting sales in each market to see where differences occur. Include a market with no media buys as a control.

• Take a staged approach to media attribution: Use marketing mix modeling to isolate and quantify how many transactions were driven by each media vehicle, then overlay that with a second-stage analysis that helps you understand how offline marketing, as well as display ads, contributed to online website visits and search and display clicks. This gives you a more complete picture of how online engagement was driven through other channels, and allows for proper reallocation of attribution. To get a true depiction of ROI, you need to understand not only who or how many converted through online media but also what drove them to the online channel.

Next story loading loading..