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Attribution Management 101

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Very basic stuff on Attribution Management. Definition, process, modeling, simulation, etc.

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Attribution Management 101

  1. 1. Attribution Management 101 September 7, 2012 Go Sugihara, CEO, ATARA, LLC
  2. 2. IntroductionGo Sugihara• Born March 1969 in Hiroshima• Grew up in Oregon (yay!)• KDDI, Intel(Intel Inside Marketing Program), Yahoo!(Overture), Google, ATARA• Specialize in marketing automation systems development and attribution management, paid search consulting• Published two books: – Paid Search: Professional’s Logic – Attribution: A Complete New Way to Consider Ad Effectiveness 2
  3. 3. Agenda• Attribution Management 101• Case Study• Current Business/Challenges 3
  4. 4. ATTRIBUTION 101 4
  5. 5. Conventional Online Ad Campaign and Analytics Online Ad Campaign Media and Tactics Your target CPA(Cost Per Acquisition) = $120 10 CVs with $1000 = $100 CPA Great. More budget! Paid Search 20 CVs with $0 = $0 CPA Really great. Keep using. Organic Search Campaign Goal = CV(Conversion) = Online Purchase Not good. Reduce budget 5 CVs with $2000 = $400 CPA or cease campaign. Banner Ads Not good. Reduce budget 8 CVs with $1200 = $150 CPA or cease campaign. Affiliate Ads 5
  6. 6. What Does Actual User Purchase Behavior Look Like?Banner Ads Paid Search Organic Search Organic Search Only last tactic that was Banner Ads clicked gets attributed credit Affiliate Ads Paid Search Goal Assists do not get attributed credit = CV(Conversion ) = Online Purchase Shouldn’t these “assists” get credited? 6
  7. 7. There are Similar Things in the World of Sports Soccer Hockey Goal! Goal! Player A Player B Player C Player A Player BRecord <Goal> <Assist> Record <Goal> <Double Assist>In Soccer, Assist is actually an unofficial stats In Hockey, the Art Ross Trophy is awardednot counted by FIFA, but is counted mainly to NHL player who leads the league inby numerous soccer-related media. scoring points at the end of the regular season. Scoring Points = # of Goals + # of Assists Assists are considered to be valuable 7
  8. 8. So What is Attribution Management?A simple definition of “Attribution” (in the marketing world) = Giving credit where credit is due 8
  9. 9. Background: Why Attribution Management Started• Media fragmentation is making it difficult for marketers to see what is happening – Need to visualize in integrated, holistic fashion• Economic situation – Management needs to see hard evidence to approve budget• Return is maxed out with paid search• Re-boost of display advertising through DSP/Ad Exchange eco-system – But still need proof that display advertising really works• Social media is gaining momentum, but is it really working?• TV and print? PC and Mobile? Marketing is getting more and more difficult to make the right decision 9
  10. 10. 3 Commonly Used Phrases• Attribution AnalysisAn analysis on how much contribution to conversion each of themarketing tactics had using recorded data (conversion path data)• Attribution ModelingSelecting or designing the analytical model most likely to output thecorrect contribution results. Depends greatly on business model,industry, product/service lifecycle, etc.• Attribution ManagementBased on attribution analysis, a practice to optimize and gainmaximum return by re-allocating budget or changing media portfolio 10
  11. 11. Essential Significance of Attribution Management• In order to stimulate consumer attitude change, which is the purpose of advertising, attribution management is a practice used by companies to restructure marketing activities by obtaining holistic view of the entire consumer purchase behavioral trend which is becoming ever-so-complicated and fragmented In this difficult time for marketers, it is very important to be able to visualize what is going on holistically, so that you have a better chance of making the right marketing decisions 11
  12. 12. How is it Actually Done? Attribution Management Processes Accumulate Select/implement Select/Design conversion path tools Models data Run simulation on Evaluate Run analysis re-allocated simulation results budget Execute campaign w/new media plan 12
  13. 13. Tools and Conversion Path Data• Conversion path data: – is a string of data that can recorded using browser cookies – browser cookies enables clicks(views) that had direct/indirect relation to conversion to be connected, creating a path-to-conversion data – can be recorded up to 10-100+ historical tactics that lead to conversion Paid Search Ad Network A Organic Search Ad Network B CV Keyword: aaa Creative: zzz Keyword: ccc Creative: yyy 2012/9/5 13:00 2012/9/5 12:00 2012/9/4 9:00 2012/9/3 23:00 2012/9/1 14:00 ID: 123 ID: 123 ID: 123 ID: 123 ID: 123 Tools/Solutions Providers CV Path View- Modeling/ Data Thru Analysis Web analytics Adobe, Google OK OK OK Ad Effectiveness Measurement LockOn, Bebit, Cyber Agent OK OK No 3PAS DFA, MediaMind, Fringe81, DAC OK Yes OK Attribution Analytics Market Share, VisualIQ, C3 Metrics, Yes Yes Yes Adometry Campaign Management Tools Ignition One, Marin Software, Yes Yes OK Kenshoo, Adobe 13
  14. 14. Models• Equal weight distribution modelEqually divide conversion credit to each tactics• Hypothesis weight distribution modelDivide conversion credit based on hypothesis or strategy. For instance,if introduction or growth stage in product life cycle, weigh more onfirst clicks, if in maturity stage, weigh more on last clicks• Statistical weight distribution modelStatistically calculate contribution and correlation of each tactics intemporal sequence. Econometrics approach 14
  15. 15. Equal Weight Distribution Model Equal Weight Distribution Model 100% 50% 1/ 1/ 1/ 30% 3 3 3 First Middle Last 15
  16. 16. Hypothesis Weight Distribution Model – First Heavy First Heavy 100% Attribution Model 1/ 50% 2 1/ 1/ 4 4 First Middle Last 16
  17. 17. Hypothesis Weight Distribution Model – Last Heavy Last Heavy 100% Attribution Model 1/ 50% 2 1/ 1/ 4 4 First Middle Last 17
  18. 18. Last Click Attribution Model Last Click Attribution Model 100% 10 0% 50% 0 0 First Middle Last 18
  19. 19. Statistical Weight Distribution Model Tactics (a) increase in ad spend relates to increase in # of conversionsCV (a) Tactics (b) increase in ad spend inversely relates to # of conversions (b) Tactics (c) increase in ad spend will relate to # of conversions but when surpassed certain point it will decrease (c) Methodology is to consider the above characteristics of each tactics and come up with the optimal combination of maximum Ad Spend conversion to total ad spend # of CV = invariable + a×AD1 + b×AD2 + c×AD3 + d×AD4 Factor of each of the variables in regression equation = advertising elasticity = Attribution score “Where’s the optimal point in the line for the combination to get the most bang for your buck” 19
  20. 20. Attribution Analysis Steps Use a model and Apply cost to the Sort Attribution score each tactic score and CPA by better = Attribution calculate efficiency = Scoring Attribution CPA Attribution Rank Score it Calculate “new” Rank it CPA taking into account “assists” 20
  21. 21. Very Simple Example of Attribution Analysis Premium Ad Network Banner Ad Banner Ad Paid Search CV Considered to not have any effectiveness First Middle Last Cost $100 $200 $300Past Attribution 0 0 1 CPA n/a n/a $300 Attribution Score 1/3 1/3 1/3 (Equal Distribution)Now Attribution CPA $300 $600 $900 Attribution Rank #1 #2 #3 You could say that the 2 banner ads tactics have better ad effectiveness than paid search 21
  22. 22. Example of Budget Re-Allocation (paid search example) • Output attribution CPA by each individual keywords (even if there are 1 million keywords!) • Given that the keywords have little margin for optimization (for instance, ranked #1 and have tried changing creative), using your target CPA, decide on what to continue using and what not • For those that does not meet the target CPA, shift them to other efficient media Attribution CPA is less Continue than target CPA Last Click Effectiveness Attribution CPA is more Re-allocate to Banner than target CPA Clicks Attribution CPA is less Continue than target CPA Impression No Last Click Attribution CPA is more Re-allocate to Banner Effectiveness than target CPA Attribution Score is 0 Re-allocate to BannerPaid Search No Clicks (no direct/indirect attribution) No Impression 22
  23. 23. CASE STUDY 23
  24. 24. Case Study: xxxx• One of very top online xxxxx site• Monthly online marketing budget is approx. 65 million Yen – Paid Search 60 mil Yen – Banner Ads 5 million Yen (includes premium ads, ad networks, retargeting, content targeting)• Target CPA – Paid Search 6700 Yen – Banner Ads 12000 Yen• Issues – Paid search is effective and efficient with good CPA but has no room for optimization – However, clients needs to increase conversions – Banner ads does not seem to be efficient but can it be better used? 24
  25. 25. Attribution Analysis Result Target CPA 6700 Yen Tactics Cost # of CV Attribution Score Last Click CPA Attribution CPAPaid Search 60 mil Yen 9000 16000 6666 Yen 3750 YenBanner Ads 5 mil Yen 420 830 11904 Yen 6024 Yen Premium 1.5 mil Yen 50 250 30000 Yen 6000 Yen Ad Network 1.5 mil Yen 170 155 8823 Yen 9677 Yen (Google-CT) Ad Network 1.5 mil Yen 180 400 8333 Yen 3750 Yen (Google-RM) Ad Network 0.5 mil Yen 20 25 25000 Yen 20000 Yen (Yahoo-IM) Total 65 mil Yen 9420 16830 6900 3862 Yen• Banner Ads CPA turns out to be 12000 Yen >>> 6000 Yen – It means that it might be working and there’s opportunities 25
  26. 26. Re-allocation of BudgetAttribution CPA Re-allocate Not efficient budget to Banner Ads 6700 Yen High Low efficiency efficiency KW1 KW2 KW3 KW4 KW5 KW6 KW7 KW8 KW9 KW10 26
  27. 27. Re-allocation of Budget65 mil Yen Banner Ads:0.5 mil Yen 30 mil Yen increase Banner Ads: 35 mil Yen Paid Search: 60 mil Yen Paid Search: 30 mil Yen • No change to total budget • Shifted 30 mil Yen from paid search to banner ads 27
  28. 28. Conversion Simulation Current Simulated# of CVs +5500 If 30 mil Yen is shifted to Banner Ads, 5500 CVs will likely be generated 9450 -1500 from decreasing paid search budget • Simulation Result – +5500-1500 CVs = 4000 CVs increase possible 28
  29. 29. Actual # of CVs Simulation line Actual line after attribution management Past actual 1 month after実施後1ヶ月 management attribution• Client decided to shift budget but less than 30 mil Yen (risk)• In a month, # of CVs increase accelerated to be close to simulation – Reason for slow start (hypothesis): effect of banner ads takes some time• Client was very happy and now we are supporting them in next phase 29
  31. 31. Current State and FutureLevelHigh Cookie-less tracking Mobile integration Predictive analytics Marketing Automation 3rd Generation Online+Offline 2nd Generation No doubt it’s going to be Econometric Online more data-driven and 1st Generation Innovators Click+ViewThru sophisticated Online Early Adopters Click-based Early Majority Late MajorityLow 実施後1ヶ月 Time 31
  32. 32. Challenges• Internal Silo-ed programs and execution team – Many advertisers have silo-ed team function and they want to protect their own budget – C-level commitment and leadership and holistic decision making is necessary• Agency governance – When there’s multiple agencies, project management can be difficult• People – Data scientist shortage • McKinsey ”The US faces a shortage of 140K - 190K people with analytical and managerial expertise and 1.5 million managers/analysts with the skills to make decisions based on the study of big data” – Not just number cruncher, someone who really understands marketing and tactics in operational/planning level Pretty much the same challenges as IMC 32
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