How  to Figure Out Which Channel Deserves Credit  for Which Order

By Chantal Todé

Attribution Management: Getting Started is Easier Than You Think

While attribution management can be very complex, industry experts agree that if retailers start simply and test frequently, they’re better off than doing nothing at all. You may not end up with a perfect formula to determine how to credit a catalog for online orders, but you should get a good directional view of what’s going on. Here are some tips to get you started:

1. Ask your online marketing vendors to send you an audit of the orders for which they’re taking credit for each month, suggests Glenn Edelman, vice president of marketing at The Wine Enthusiast. “It’s pretty eye-opening initially to see where orders overlap,” he says.

2. Differentiate between branded and nonbranded search terms. Someone who types a retailer’s brand name into a search engine “is really walking through your front door,” says George Michie, CEO at Rimm-Kaufman Group. “Retailers should focus on figuring out which of their marketing efforts got these consumers to type in their name,” he continues. Also, because branded terms typically perform significantly better than nonbranded terms, averaging these two together can give you a misleading idea of how effective your paid search program is.

3. While there’s a lot of talk about trying to dig deeper than a customer’s last click when it comes to allocating orders, this is still a good place to start, insists Al Bessin, consulting partner at LENSER. “The last click is a good place to start to help you understand how consumers are finding you.” By combining this information with additional data about customers, including matching back orders to a catalog, retailers can come up with a workable model against which they can test, he adds.

4. Define terms such as first contact, last contact, acquisition and prospect before you get started. With first contact, for example, what window of time do you use to define it? A month? A year?

In its annual Christmas book released this fall, Neiman Marcus showcases the usual selection of over-the-top luxury gift items, such as a $250,000 houseboat for two. One of the more interesting developments regarding this year's catalog, however, is that for the first time it's also available on Apple's iPad. Using the wireless tablet, consumers can view the catalog, click on specific items to watch videos about featured gifts and/or place an order.

New marketing vehicles such as the iPad bring cross-channel retailers innovative ways to reach consumers. But they also complicate life, making it a challenge to get a clear picture of which marketing activities are driving the most traffic to a website. Without accurate information about which channels are performing best, multichannel retailers struggle with where to invest their marketing dollars and how to get the highest return on their investments.

The process of allocating orders in any channel to the advertising vehicle that caused them to happen is called attribution management. The idea has been around for a long time, and can also be called order allocation. Or, in the offline world, matchbacks. The need for better attribution management "has become more pressing as folks spend more money on paid search, display ads and retargeting," says George Michie, co-founder and CEO at search marketing firm Rimm-Kaufman Group. This is because inaccurate reporting can result in cross-channel retailers giving credit for a single order to both an offline and online vehicle.

Taking All  the Credit
"I think a lot of retailers know double counting is happening, but the challenge is how do they find the right solution to address the problem that doesn't cost $5 million and take years to develop," notes Al Bessin, consulting partner at direct marketing firm LENSER. Less-than-accurate reporting can result in management issues for some cross-channel retailers, with online and offline divisions each believing it deserves credit for driving the most orders — and therefore the bigger chunk of the marketing budget.

Bessin, Michie and other industry experts insist that while there's no perfect solution for allocating orders, retailers must attempt to gain a better view of their marketing activities if they want to improve conversion rates and ROI numbers. In some cases, the financial impact can be significant. Attribution management services provider ClearSaleing, for example, was able to help one client reduce its cost per action by an average of 43 percent, according to a recent report from Forrester. Another client reduced its ad spend by approximately $100,000, while increasing its conversion rate by 50 percent; and yet another saw savings of up to 20 percent per marketing channel.

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