Tuesday, June 18, 2013

A quick review of digital ad attribution models

Marketers are constantly seeking for the highest ad campaign performance and where to receive the highest ROI on advertising spent. As brand shift advertising spends to digital and attribution is key performance metric for media channels.  The related questions are what target strategies work? Which ads are driving conversions? Is one channel more valuable than another?

Below I will review the popular attribution models with their associated strengths and weaknesses.

1. Full Funnel Attribution
This classic model assigns values throughout the different stages of a consumer's experience, providing function into the role that each ad plays.   Consider the following stages: awareness, interest, consideration, preference and purchase.  There are two weaknesses with this model. First not all stages are equally important, awareness and closing the sales deserve the most credit. Second, each ad may serve multiple purposes such as awareness, influence brand preference and driving the closing of the sales.

2. Last-Click Attribution
This simple model gives the last advertising medium before purchase all credits for the sale.  Search market prefers this attribution because it avoids confusion. On a high level, this may seem logical. However, on a closer review the model has flaws. Specifically, the model doesn't account for previous advertisement have motivated the consumer to purchase the product in advance of the last click. The model fails to account for the process long term product awareness and interest or the evaluation that consumers go through.

3. Post-View Attribution
This model credits the last advertising channel that shows ad to the consumer who makes a purchase. The strength of this model is enable marketers to measure if viewing the ad actually resulted in sale. The weakness of this model is the similar to "Last-Click" model, as it encourages media partners to widespread to take credit for the conversion, even though a consumer may not have seen the ad.

4. Equal Attribution
An extension to the post-view model is where equal value assigned to every single ad placement. Branding campaigns are typically more likely to utilize an equal attribution model.  The weakness of this approach is assumed the quality of ads is created equal.

5. Fractional Attribution
The most sophisticated model which measures fraction attribution which shows duplication is occurring between channels, which help brands remove repetitive media who are not adding value.  Research shows that first impression is more important than subsequent impressions. Thus if an ad provider can deliver low duplication and strong first impression, then the ad has a higher value because it initiates consumer's awareness and play a important role for the conversion.

In my opinion, fraction attribution is the best model available and as close as we can get to practice full marketing funnel attribution.

The complexity of attribution lies in companies' varied objectives and targeted audience. Consequently, attribution models will continue to evolve. Certainly, marketer’s idea will shape the future models of attribution and smart people will help to better measure attribution of ad channels.


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