Attribution and ROI Measurement was presented by Steve Latham at Search Engine Strategies 2010. To request a soft-copy please reach out via Twitter, LinkedIn or Facebook.
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Attribution and ROI Measurement
1. Attribution and ROI Measurement!
What to Measure and How to Demonstrate Value
Steve Latham, Spur Interactive!
@stevelatham
steve@spurinteractive.com
http://blog.spurinteractive.com
2. A long time ago…
There were two types of advertisers
Brand marketers (ATL)
Strategic
Direct Response (BTL)
Tactical
Brand marketers bought display
Metrics: reach, frequency and cost per impression
Measured by: Ad Server
Assumed premium inventory = more qualified reach
Display
View-through was interesting but not important
Direct marketers bought PPC and 3rd party email
Metrics: Leads / Sales, Cost Per Click, Cost Per Action
Measure by: Site Analytics (crediting source of last click)
Search
Everyone knew the rules and everyone was happy
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Attribution and ROI Measurement
3. Today…
Digital goes through the line
Strategic and tactical
Awareness
(Display, Email, Social,
Branding and DR are merging
Mobile, Fat Tail Search)
Social spans all channels
Consideration
Integrated campaigns target all stages ! (Display, Mid-Tail
Search, Social)
of the funnel
Can’t win by harvesting demand (search)
Preference
Must create demand (display, social, mobile)
Search, Social
(Long-Tail
Email)
Focus on ROI is greater than ever
Action
Each investment must stand on its own
(Social,
Search,
Email)
Yet… metrics and tools are not sufficient
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Attribution and ROI Measurement
4. Marketing Conversation #1
How is our online
advertising working?
Great Boss!
Wonderful! How do
CTRs are up and CPCs are
the results look?
down! Length and depth of
engagement are increasing and
conversion rates are improving!
We’re also nominated for a
What the *#^@*! are you Webby!
talking about?
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Attribution and ROI Measurement
5. Marketing Conversation #2
How is our online
advertising working?
Great Boss!
Wonderful! How do
the results look?
We’re generating $7 in sales for
every $1 spent while increasing
brand awareness by 75%.
Can you handle a bigger
budget?
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Attribution and ROI Measurement
6. Challenges
We now know…
Awareness matters
Yet…while online is the
Clicks aren’t very important
most measurable medium,
8% of users contribute 80%
it’s often held to a much
Ads are effective without clicks
higher standard
Can’t give credit to the last click
Assists are just as important
ROI measurement is critical
Site analytics miss a lot
Cookie deletion & multiple devices
Tools are still lacking (and pricey)
Calculating online impact on
offline sales is hard!
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Attribution and ROI Measurement
7. The Solution (?)
There is no silver bullet
Roadmap for success:
1. Define specific objectives
2. Define campaign actions and metrics
3. Measure the right results
4. Translate results into value
5. Communicate results in terms CXOs understand (ROI)
Here’s how to do it with paid and earned media
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Attribution and ROI Measurement
8. 1. Define Specific Objectives
Objectives must be SMART
Specific: awareness, transactions and sales
Measureable actions: transactions and revenue
Attainable: 20% increase over last year
Relevant: tie directly to CXO’s objectives
Time-bound: will take place this month
Tips:
Think about them from CXO’s !
perspective (ROI)
Document them
Communicate them
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9. 2. Define Actions and Metrics
Campaign actions and metrics (e.g.)
Primary: registrations, sales
Secondary: goal pages,!
long visits, downloads, etc.
Online vs. Offline: coupons,!
survey results
Assign Value to Actions (e.g.)
Average sale = $1,500
Conversions = $150 (assuming 10% of conversions close)
Visitors = $3.00 (assuming 2% of visitors “engage”)
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10. 3. Measure the Right Results
Direct KPIs
Attributable results
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11. Direct KPIs
Basic Metrics
Engagement metrics
Impressions
Pages viewed per visit
Clicks
Time on site
Visits
Goal Pages
Page views
Registrations
Transactions
Social Media Metrics
Follows / Fans
Likes / Comments
Mentions
Viewing content
Sharing / Posting
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12. Attributing Credit: The New Imperative
Decision cycles are not linear
Users often make multiple before taking action
Most “conversions” take place after multiple touches, e.g.:
• 5-7 impressions precede a visit
• 2-3 visits precede an action
Credit usually attributed to last click
Design limitation of analytics platforms
Rewards Search
Punishes Display, Email and Social
The Goal:
Understand which touch points precede each action
Assign value to those touch points (“Attribution Analysis”)
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13. Sample Engagement Path
What we can measure via ad server and site analytics:
Impression Impression Impression Impression Visit Visit Visit / Action
Display Display E-Mail Display Paid Organic Direct Nav
Vendor #1 Vendor #2 3rd party Vendor #3 Search Search
Category term Brand / Geo
Day: 0
15
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The “direct nav” lead was preceded by 4 ads and 2 searches
- Without this insight – you may axe a smart media buy
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14. Attributing Credit: Paid Media
Step 1 - Recast Actions* by Source (*actions = visit, conversion etc.)
Quantify the number of touches that preceded each action
Assign value to each touch point (e.g. 7 impressions = 1 click)
Recast the number of touches and assign credit proportionally
See a more accurate picture of Display’s impact on results
Lift: 300+%
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Attribution and ROI Measurement
15. Attributing Credit: Paid Media (cont.)
Step 2 – Based on Recast Actions, calculate revised Cost Per
Action for each Source
Drop: 70%+
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Attribution and ROI Measurement
16. 4. Translate Results Into Value
To measure ROI, you first have to calculate the value
Determine how Actions Intent (offline purchase)
Action
Value
Site Visits
Indicates awareness
Goal Page Views
Indicates consideration
Long Visits
Indicates consideration
Conversions
Indicates preference
Forecast how Intent $$$
Some % of those who show Intent will buy
Do the math and apply across each set of actions
Use common sense to normalize results
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17. Engagement ROI Methodology
Project Normalize Divide by
Define Assign
Value for (average) Cost or
Metrics
Close Rates
each action
Values
investment
Such as:
Forecast:
Project Values:
Strengthen by:
Net it out:
• Impressions
For each Metric:
For each Metric:
• Eliminate • Return on
outliers
Spend (ROS)
• Visits
• What % will buy?
• Revenue
• Return on
• Returning Visitors
• What % will • Margin
Investment
influence a (ROI)
• Goal Page Views
purchase?
• NPV
• Conversions
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18. Engagement Funnel / ROI Model
AWARENESS
(Visits)
CONSIDERATION
(Long Visits, Goal
page views)
PREFERENCE
(Register)
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19. 5. Communicate Results
Effective Communication is a Must
Communicate results that matter
Communicate them in a way CXOs will understand
Use terms they use
Leads, Opportunities, Sales, Customers, Margin
ROS, ROI, NPV
Use Charts and Dashboards
But have supporting data
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Attribution and ROI Measurement
20. How We Should Measure Social Media ROI
In a perfect world, we would:
Connect the dots between results and social interactions
Within Twitter stream and on Facebook pages
Blog and related social mentions
ReTweets, Mentions, Likes, Favorites, Shared Content
Integrate social engagements into !
campaign reports
Attribute credit for social assists
Assign economic value
Calculate ROI
But… it’s far from a perfect world
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Attribution and ROI Measurement
22. The Reality
Few have the tools and capabilities to execute this level of
measurement and analysis
And as with paid media, you can’t measure everything
It’s impossible to connect every visit, conversion or purchase
back to a paid or social interaction
That said… there are ways to build a business case
Advertising Equivalency
Market testing
Social Engagement modeling
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Attribution and ROI Measurement
23. Advertising Equivalency Value (AEV)
Borrowing from playbook of PR firms…
Estimates value of earned media by comparing to the cost
of an advertisement
Size of the mention
Reach of the post
CPM grossed up for “editorial value”
Has some shortcomings:
It’s hard to gauge true reach
All mentions are not equal
• Sentiment / Tone
• Length / depth
• Credibility of the writer
When to use it:
When client is already used to this approach
When you have no other means
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Attribution and ROI Measurement
24. Market Testing
To isolate the impact of social media, construct a test
Define strategy for a test campaign:
Geographic market
Specific product, service or offer
Define the test and the control groups
Execute campaign and measure relative lift:
Site traffic: visitor geos, site sections, specific pages
Conversions, leads, sales, etc.
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Attribution and ROI Measurement
25. Incorporate Surveys into Market Testing
Ask customers if they have:
Been to your web site?
Been to your Facebook page?
Followed you on Twitter?
Compare results to control group
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26. Social Engagement Modeling
Goal: determine how Social Interactions drive sales (via WOM)
Action
Value
Multiplier
Referring Visits
Consideration
Very low
Fans/Followers
Loyalty
Low
Mentions/RTs/Faves/Likes
Preference
Medium
Prominent Blog Mentions
Preference
High
To forecast results, account for the impact of WOM
Incorporate a Multiplier in your Calculations
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27. Engagement Funnel / ROI Model
AWARENESS
(Visits)
CONSIDERATION
(Long Visits, Goal
page views)
PREFERENCE
(Register)
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28. In Closing…
The bar is being raised… we have to do better.
While there’s no panacea, you can build a solid business case
Employ this 5-step approach and your budgets will grow!
Let’s stay in touch!
Facebook.com/slatham
Twitter @spurinteractive
LinkedIn.com/in/stevelatham
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