Commentary

Adding Advanced Attribution To The Purchase Funnel

The purchase funnel -- aka the marketing, conversion, or sales funnel -- has long been the backbone of traditional marketing programs. First introduced in 1898, it depicts the theoretical journey that consumers take from their initial exposure to a brand to their becoming first time and ultimately repeat customers. The original purchase funnel, or the AIDA model, characterizes this journey as a series of four stages: awareness, interest, desire and action. Since its initial adoption, the funnel has been updated to include CRM concepts such as loyalty and advocacy, and to address the maturation of buyers’ behavior over the last century, but the concept has largely withstood the test of time.

In the digital world, the purchase funnel typically operates in a silo within each channel. For example, search marketers categorize generic keywords as top-of-the-funnel, since they generate customer awareness for the brand. Keywords that are more specific and narrow are labeled as bottom-of-the-funnel because they lead to higher conversion rates and sit closer to the sale itself. Although some effort has been made to step out of these silos and categorize all marketing into various funnel stages, it has been limited to individual marketing analysts and requires some serious efforts on their part to overcome the limitations of last-click attribution. With multi-touch attribution becoming more common and attainable, we can now examine crosschannel purchase funnels, taking all marketing touch points into consideration.

An attribution solution with funnel stage reporting helps marketers understand the complete purchase journey, whether it is entirely online or includes offline channels. These reports simplify the traditional AIDA purchase funnel definitions into three main stages: introducer, promoter and closer. The introducer aligns with the awareness stage; and the closer, the action stage. The promoter stage represents all the middle funnel activity such as interest, evaluation and consideration. Channels and campaigns are as unique as a consumer’s journey through the funnel and they aren’t always easily segmented into one of the three stages. For instance, a display channel often incorporates aspects of each. It can act entirely in isolation or as an “assist” player that successfully influences conversions in combination with media from other channels.

Today’s funnel stage reports provide new insights into a channel, site or campaign’s role as an introducer, promoter or closer. Standard funnel stage reports do this with a simple counting exercise. For example, to determine the role of a site, they count the number of times the site is the first, last or in-between touch point. They have the advantage of being multichannel, meaning they can aggregate some of the siloed data, but they are still limited in their scope and do not provide metrics that are comprehensive enough to determine where the channel sits on the introducer to promoter continuum.

By contrast, fractional attribution models assign partial credit to every touch point leading to a conversion and are able to identify the influence each one had on driving the conversion. Advanced attribution models use a data-driven approach to allocate the credit due to each touch point.  

There are several ways that the fractional attribution model can be useful:

  • Planning better campaigns and aligning organizational goals of driving brand impact or conversions through a better understanding of channel sequencing.
  • Accelerating customers’ journey through the purchase funnel by identifying and addressing inefficiencies and lags along their path.
  • Customizing communications to be more relevant based on the funnel stage: tailored, educational messaging for creative that serve predominately as introducers and saving offers for channels that serve as closers.
  • Incorporating CRM systems to re-engage with past customers to promote repeat purchase, advocacy and to reduce churn.

Using multi-touch attribution to understand the marketing funnel is a huge step in the right direction. To understand the real impact of the marketing funnel, it is critical that marketers use the right fractional credits derived from a data-driven, advanced attribution model.

1 comment about "Adding Advanced Attribution To The Purchase Funnel".
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  1. Michalis Michael from DigitalMR Ltd., August 8, 2012 at 3:32 a.m.

    Excellent article Peter. We are also very passionate about measuring the various stages in the funnel and allocating conversion rate targets to each stage. When we create a sales roadmap for one of our solutions we always include the target funnel conversions based on historical data for the sales team to know what they are aiming for. In many organisations it is not always easy to find historical data from all the silos by product so we see a lot of room for improvement in this area. We have also developed what we call the "Accelerated Customer Advocacy Model" which a lot of relevance to what you are talking about and would be interested in your thoughts on the model. You can download a white paper about it from our website if you are interested.

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