Why Multi-Touch Attribution Adoption Will Change More Than You May Think

June 29, 2017 — by Laura Carrier    

Most people know that last-touch attribution is flawed. Yet it remains the leading gauge for channel performance. This ignores the fact that giving the last ad viewed credit for a sale or desired action is like giving the MVP award in a basketball game to the person who scores the final basket.

But last-touch has remained viable because it’s better than nothing. The alternative — multi-touch attribution — historically has been hard to implement.

It’s still hard, but organizations are making great strides toward making MTA a standard. In 2017, most top-tier marketers are working on fully implementing MTA. When they do have this completely up and running (and here I mean as more than just as a reporting mechanism), this will usher in profound changes for both digital marketers and for the organizations they service in terms.

Spending will change

The first change we’ll see is increased growth in programmatic spending. Consumers are spending more and more time online researching and purchasing. As a result, digital marketing spending, specifically programmatic, will continue to rise — eMarketer expects programmatic display spending to jump about 28% this year. MTA will help marketers better understand which forms of digital media are contributing to brand health, to an incremental sale or other desired customer behaviors.

Equally importantly, MTA will illuminate what the value is of each of those marketing channel contributions. Programmatic as both a cost-efficient and customer-focused method of marketing will continue to grow as incremental performance and percent of contribution become more refined.

MTA will also prompt less spending for channels which overly benefit from last-click attribution models, specifically social media and search. Though both are very important in the customer journey, they have overly benefited from last click measurement, for many reasons.

One reason is “Tab Distraction.” For example, let’s say you’re in Chrome and you have several tabs open. (Quick: How many do you have open right now? A lot, right?) So you’re at J. Crew’s website and about to buy something, but then you decide to visit Facebook before completing the purchase (because you get distracted by another tab). When you open the page, you are very likely to see a J. Crew retargeting ad. You then go back to continue completing your purchase on J. Crew. Even though it didn’t help make the sale in this case, Facebook will get credit for this sale on last touch models. It will also get future marketing spend as a result of this (distorting both that customer’s true behavior and media relationship).

Because most marketers who use last touch models are also still using clicks as the indicator of engagement for all digital channels, those channels where customers do actually click as the biggest sign of engagement are also the beneficiaries of last click models, meaning more budgets are dedicated to them than should be.

Not surprisingly, the channels where clicks are a strong indicator of engagement are search and social. Once marketers grok the fact that customers engage with them differently on different digital channels and understand which of those engagements correlate to improved brand health and return on ad spend, then marketing budgets will right-size. Of course, search and social are important channels in the customer conversation, and we are still in the period where customers are increasing their use of both. But once fully implemented, I believe MTA will show that many clients are overspending on channels where clicks are the predominant indicator of customer engagement.

Organizations will change

Additionally, MTA will herald significant changes to the planning and activation processes that generate marketing plans and performance measurement frameworks. Most organizations have separate siloed marketing channel teams i.e. email, social, search, display, etc. That means each of those teams is goaled based on their particular channel’s reported performance.

Without MTA, each team claims credit for as many of the sales as their channel contributed to, but they claim credit for 100% of that sale, so total sales credit claimed adds up to much more than 100% when each team’s “performance” is added together. Once implemented, MTA will continue to give credit to each channel which deserves credit, but will assign partial, not full credit. This is not a minor change in terms of reported sales by team.

In the case of retail, the industry average is seven marketing touchpoints before a conversion, so MTA will apportion each of those seven marketing touchpoints with (for instance) 1/7th of the credit that they were claiming prior to MTA. This means that marketing, finance, HR, merchants and all related teams will need to work together to goal marketing against new benchmarks. That will require new processes for media planning, channel performance measurement frameworks, and new frameworks for defining and rating employee reviews and goals.

There are many reasons that MTA is difficult for organizations to implement — technology constraints, data connections, internal skill sets, required process changes, costs. Even though LTA is flawed, it is The Way It’s Always Been Done and that’s hard to fight. But strategic organizations have realized that the rewards of MTA are big enough to overcome both this inertia and the other significant obstacles. Right now the main barrier to full implementation is still siloed data, so smart marketers are spending 2017 getting their data house in order to make way for full MTA implementation. And when they do, we are going to see that increased understanding of complete customer behaviors will lead to correction in the marketing spend for click-based channels and significant organizational changes.