in Perspectives

Marketing attribution in practice – How fit are German marketers?

By Paco Panconcelli, Managing Director Quantcast Germany

The online world is growing daily and with it the number of potential advertising media. In Germany alone, DENIC counted roughly 16 million .de-domains in November 2015. So how can marketers identify the best advertising environments for them from this immense number and assess the success of individual measures and advertising partners? With the help of marketing attribution. This technique provides valuable insights into what channels have the greatest influence on advertising success and shows how advertising budgets can be deployed in an economically efficient manner.

So what is the status of marketing attribution in the German market? To answer this question, we surveyed more than 200 German marketing decision markers. More than a quarter of respondents (27%) do not currently use any attribution model to evaluate the success of digital campaigns and another 29% employ simple single-touch models such as first touch or last touch. My personal experience gleaned from conversations with customers and agencies is that these numbers are much higher in practice. I believe there is an urgent need for action in this respect; having reached the same conclusion, more and more advertisers are taking a closer look at marketing attribution.

Single-touch models are easy to implement, but their usefulness is limited. Under this simple view of cause and effect, advertisers ignore all touch points in the customer journey except the first or the last. Consequently, their advertising partners focus on these touch points in order to gain credit. The result is sub-optimal budget allocation.

Therefore, we recommend the use of a multi-touch model, which ideally allows for a split-funnel view and distinguishes between prospecting and retargeting activities. These two targeting disciplines pursue different goals. The goal of prospecting is to win new customers or generate fresh traffic, in order to fill the top funnel, while the goal of retargeting is to promote a conversion by an already known user, who is found in the lower funnel.

Unfortunately, our practical experience has taught us that campaign objectives, performance indicators, and attribution models are not always optimally coordinated. In most cases, additional objectives (often not stated) influence the success analysis besides the primary stated goal toward which a campaign is optimized. The click-through rate is the predominant performance indicator for measuring the success of advertising campaigns, including both performance campaigns and branding campaigns. However, other indicators such as the number of new customers (40% branding/ 49% performance), reach (37% branding/ 27% performance) and website traffic (26% branding/ 23% performance) also carry weight.

The results show that advertisers in the German digital market are still highly focused on click rates, although this focus is not appropriate for the majority of campaigns, encourages fraudulent behavior, and distorts budget allocation. Performance indicators such as views (the measurement of which for purposes of attribution is somewhat more complex) are still not applied often enough. For example, an analysis conducted by the ad server Sizmek found that views also make a critical contribution to successful conversions.

My conclusion: Just as many roads lead to Rome, the same can be said of marketing attribution. Determining exactly what technique to employ is complex and depends on the specific objectives and demands of each campaign. Nonetheless, it is worthwhile to study this topic carefully because attribution delivers valuable insights into the factors influencing a certain campaign or advertisement and can help assure economically efficient budget allocation. It would seem that more and more marketing decision makers are reaching the same conclusion!