MARKETING

The Shift Away From Last Click Attribution and its Impact on Marketing ROI

by Chad Carpenter | 11 MIN READ

last-click-attribution

Don't you just love reading about marketing metrics? For businesses with only a cursory understanding of digital analytics and KPIs, it's not necessarily the most compelling topic. But given its importance for understanding the success of your promotional efforts and ROI, maybe it should be.

Sure, you could read about the beauty of quality content or a case study of a business that 'solved' inbound marketing. I won't even deny these topics can provide you with valuable knowledge. But understanding the way you track your marketing tactics and results might be even more crucial in building a strategy that helps your business grow.

That's why it's so important to understand the current state of (and alternatives to) last-click attribution. It may seem like an abstract concept at first, but actually, the last-click attribution model plays a core role in how most businesses determine marketing ROI success today. At the same time, its various drawbacks have led platforms as distinguished as Google to look for alternative tracking solutions instead.

Buckle up: this could get a bit technical. But by the end of the article, you just might have a better understanding of how to determine the success and impact of your marketing efforts.

Understanding Today's Emphasis on Last-Click Attribution

First, let's unwrap the integral concept of last-click attribution. Behind the technical name is a simple analytics concept; it is ascribing a conversion path to the last marketing message or ad the user clicked on to take the action you want, which is to get to your website for a conversion or sale.

For instance, you may run a Facebook ad that’s designed to drive your targeted audience to register for a video course. The chances are high that you track success as total video registrations. In a last-click attribution model, only registrations that occurred as a direct result of a click on your Facebook ad would be an indicator of success for that ad.

drip-leadpages-sponsored-facebook-ad

You may not know it, but this attribution model is exactly how most digital marketing activities are tracked today. Open Google Analytics, and you will see a breakdown of the channels showing how your visitors came to your website. However, these metrics only account for the specific click your visitors made to get there, not all the steps in between. Similar reporting on advertising platforms like Facebook and AdWords tends to fall into the same last-click model.

The Limits of Last-Click Attribution

Last-click attribution may be the norm today, but it also seems to be reaching its expiration date.

Think about the above video course example. What happens if your audience sees an ad on Facebook promoting your video course, then googles it a day later to sign up? Per last-click attribution, your ad gets no credit. So you decide to stop running it, only to see your registrations falter because you didn't realize the indirect benefits of the ad.

Admittedly, not every scenario is that drastic. But it's difficult to deny that the buyer journey of today's consumer is becoming increasingly sophisticated. In layman's terms: your audience sees a bunch of different messages connected to your brand before they convert.

That's not just a guess, either. One study found that it can take up to 13 individual marketing touches through different channels, digital and otherwise, to generate a qualified sales lead. Wouldn't it be convenient to account for these touches instead of ascribing success only to the one message that happened to kick off the conversion?

For years, experts have called for more intuitive data-driven models that account for the multitude of channels your audience might see before the conversion.

Finally, these calls seem to be paying off.

How Google Plans to Kill Last-Click Attribution

As one of the world's largest advertising platforms, Google has long been on the forefront of marketing KPIs. So it's no surprise that with a recent announcement, the search engine giant is (as Advertising Age puts it) looking to "kill last-click attribution."

Here's how Babak Pahlavan, Google's Senior Director of Product Management for Analytics Measurement, described Google Attribution, the tool that will ultimately fight the good fight:

It creates a prediction model that learns by weighting a set of touchpoints on how likely a user is to purchase something. The presence and absence of marketing touchpoints across channels and campaigns will either decrease or increase the likelihood of a conversion.

I know, I know... Sounds complicated. But actually, Pahlavan is simply saying that through machine learning, the tool will be able to assign a value to each marketing tactic that might be responsible for a conversion. Google Attribution will be rolled out later this year and will be free for small and medium-sized businesses.

The big takeaway here is the ax that Google is taking to last-click attribution. Once the tool rolls out, it could impact a broad range of aspects surrounding your marketing strategy.

So, What Tactics and Channels Could Benefit?

Think about it: which marketing tactics and channels do you use right now that are probably valuable, even if they don't typically lead straight to conversions? Just a few examples include:

  • Your social media efforts, particularly organic page posts that aim more for audience engagement than promotion.
  • Early emails in a lead nurturing sequence, which are not yet obvious sales pushes.
  • Newsletters, blog posts, and infographics that have marketing goals other than lead or customer conversions.

All of these tactics could benefit from a success measuring model that takes a more holistic approach than has typically been the case. Even conversion-focused messages are included. Don't you think that a search ad leading to a click on the corresponding organic search result should get the attention-grabbing credit it deserves?

If Google has its way, last-click attribution won't end there. Even non-digital tactics, from TV and radio spots to in-store visits, could be weighted to determine their relative impact on getting your audience to become customers.

The Utopian Future of Marketing Success Measurement

Have I mentioned that last-click attribution, while well-intended, is ultimately flawed? Once or twice, maybe. For years, experts have agreed - and Google's announcement of Attribution finally gets us a significant step closer to what an alternative can look like.

Imagine a marketing world in which everything you spend resources on can be connected directly to how much revenue it brings in for your business. One of the oldest advertising clichés, uttered by marketing pioneer John Wanamaker, finally won't be true anymore:

Half the money I spend on advertising is wasted; the trouble is, I don't know which half.

It turns out, Mr. Wanamaker never saw Google coming. The natural evolution from the end of last-click attribution will be nothing less than 100 percent accountability for all of your marketing dollars and efforts.

Of course, we're not there yet. Going from a new tool that attempts to tackle the status quo to a utopian future in which all marketing is measurable is an admittedly big step. But the point is that we're getting closer - which brings us to the increasing importance of effective marketing ROI measurement.

Gaining a Better Understanding of Your Marketing ROI

In many ways, marketing ROI (return on investment, for those blissfully unaware of the concept) is the holy grail in measuring marketing success. Everything you do, online or through other marketing channels, costs money. Wouldn't it be great if you knew exactly how much revenue each and every channel generated?

Unfortunately, ROI almost by definition has to be approximate. Because of incomplete tracking, you simply don't know which marketing initiatives lead to conversions and revenue. All you can do is guess - and use flawed models like last-click attribution.

Of course, that doesn't make measuring marketing ROI any less important. If you can even approximate the return on your marketing spend, you're well on your way to a strategy that better maximizes your resources.

You can take the old school route of spreadsheets that take into account marketing costs along with results that range from web clicks to conversions. You can even take it a step further to drill down conversion costs and revenue utiilizing an ROI calculator that calculates other important metrics like customer lifetime value (CTV), conversion ratios or cost per lead.

But even a dynamic calculator tool doesn't provide the full story--the real path of the buyers in their journey to converting on your site--if you don't account for marketing channels, activities and tactics that contribute to the conversion. And that's where we close the loop.

By looking to end last-click attribution, Google is seeking to help businesses of all sizes improve their ability to measure just how effective their resources are spent. The result will be more agile marketing to build targeted lead to customer conversions, happier sales teams and ultimately, marketing ROI with far less waste.

Pay attention now, because the end of last-click attribution (and its flawed measurement results) is coming.

Originally published June 23, 2017. Updated November 9, 2017.