Delivering New Customers to Advertisers

According to ComScore’s “When Money Moves to Digital, Where Should It Go” report issued in September, retargeting efforts yield an average 726% lift in site visitation within four weeks of ad exposure.  While these numbers are impressive in demonstrating the power of retargeting, they tell only the last chapter of the story.

A recent study by DataXu found that “last click attribution ignored 97 percent of spend driving conversions,” and “often results in over-spending in search and re-targeting, and under-spending in display that drives demand creation.”

Another study by Media Contacts found that “a typical-search-before-purchase journey can involve up to 60 or more clicks over several sessions, sometimes starting as far back as 3 months, depending on the product’s purchase cycle.”

In other words, pure click to conversion is not the only way marketers should evaluate ROI. They should also look at how technologies that are focused on finding new customers and prospects are impacting the success of their campaigns.

Even Google agrees with this logic. Avinash Kaushik, analytics evangelist at Google, discussed attribution in his recent keynote speech at Search Engine Strategies. He said the ‘least worst’ attribution model he’s come across is what he described as a ‘decay’ model, in which the last click is attributed with the majority of credit, and each touch point prior to that is assigned a progressively reduced portion.  At the same conference, Mike Chertudi of Omniture estimated that 90% of companies are double or triple counting conversions as a result of poor attribution modeling.

For most marketers, winning new customers is just as important as driving the lifetime value of existing ones. The challenge lays in parsing out the right level of influence each consumer touch point has on a conversion. At Media6Degrees, we created Social Targeting to help marketers find new customers based on the social connections of their existing customers. Using last-click attribution to measure a Social Targeting campaign will not give advertisers the entire story of what really led to a conversion.

For example, let’s assume we target an ad to a consumer who has never been to marketer X’s site and is therefore not being retargeted. She may visit marketer X’s site immediately after seeing our ad or within a given window of time. In either case, after she visits marketer X’s site, she becomes part of the retargeting pool of numerous other vendors. I would argue that the retargeting component of this example is the easy work and should be attributed less credit than the ad that drove the initial visit.

Clearly in this example, last-click fails to take into account the full value of any campaign focused on finding new customers. Once a new customer is converted, their lifetime value can be enormous. As an example, let’s assume a campaign generates an order for $100 at a CPA of $50. This may be a respectable ROI, exceeding the marketer’s current objective. But if that person is a brand new customer, the future value to the marketer can be far greater over time as that person makes repeat purchases.

The entire industry appears to be shifting towards more intelligent and sophisticated attribution models. Numerous solutions already exist to help understand the timeline of a campaign and the path to conversion. DoubleClick has standard reports. Clearsaling has developed a suite of tools for marketers looking to go even deeper in understanding the drivers of conversion. This is an important step for our industry to take as we continue to prove out the power of digital advertising.