Marketers are being urged to look beyond last click modelling and run trials to establish their most effective channel mix in driving incremental sales
16 December 2021
By Sean Hargrave
All marketers espouse a growth mindset. They talk about looking for opportunities to gain incremental reach and sales, and yet very few regularly challenge their accepted marketing mix.
The notion of incrementality is widely adopted, but the intellectual rigour of challenging how campaigns are planned and executed to see if they deliver new growth is often missing. It may be that executives are too busy with day-to-day operations, or perhaps campaigns are still performing at what they see as an acceptable level.
However, successful marketers need to overcome this inertia and have the intellectual curiosity to ask a very simple question: is my budget truly being optimised towards earning incremental sales?
The fundamental question that always needs to be applied is whether a visitor to your site was going to visit anyway, and was a purchaser that was going to convert regardless of the last click that took them there. The commitment to ask this and get a true picture of incremental sales is vital if brands are going to focus their budget on winning new customers, rather than funnelling money into channels that did far less to earn a conversion than a last-click model might suggest.
Sponsored by Meta
By Albert Abello Lozano, head of automation, Treatwell
Test to impress:
How brands are uncovering surprising insights about where their sales come from
Indeed, Gabriella Munro, marketing science partner at Meta – owner of platforms including Facebook, Instagram and WhatsApp – believes that when brands start to ask questions around incremental sales, they will often find they are too fixated on giving credit to the channel that provided the last click. This is unhelpful for the marketing team because it can give an inflated view of a channel’s worth, which leads to further investment.
This prevents marketers from getting a clearer picture of other channels that may have played a major role in a purchase, meaning the overlooked channels get less budget than they should. The result, Munro points out, is marketers can spend too much on rewarding a channel which, at least some of the time, delivers sales they were going to receive anyway.
“A lot of brands are stuck in a habit of relying on heavily funding favoured channels because that’s what they’ve always done and that’s what appears to be working when they look at last-click attribution,” she says.
“It’s particularly true of paid search. It can often earn a click from someone who has already been made aware of the brand through another channel and might well have been going on to engage with them anyway. But people will often click the advertising link at the top of the search results, and that gives the brand a false impression of how successful PPC can be. When Meta has looked at this, we found last click attribution undervalues Facebook by around 47%.”
At the heart of this potential undervaluing, Munro believes there is a fundamental difference in how people use social media compared to other channels. It is a channel where “products find people” rather than the other way around. Often, people are second-screening or travelling when consuming social media, and so are sometimes not in a position to transact right there and then. That can mean PPC, in particular, gets the full credit when they later go on to search for an item or a brand they wanted to connect with, and click on an advertising link to make a purchase they were likely to make anyway.
The solution is for brands to challenge accepted thinking and carry out cross-channel experiments, according to Ludvig Hedlund, client partner at Meta. This empowers teams to get a better idea of whether their current budget allocation is delivering the most optimised campaigns or whether a variation in budget allocation might deliver better outcomes more cost effectively.
“The only way you can find out if you have the optimal budget mix is to carry out experiments,” he says.
“Brands need to get out of their last-click attribution modelling mindset and challenge assumptions by running trials where they vary budget allocations or channel strategy and see what the results are. It’s not enough to do this just once, it has to be done regularly because market conditions change, particularly around seasonality.”
Challenging last-click modelling
For brands wondering where to start, Munro offers a simple tip to never get stuck in a ‘rabbit hole’ of experimentation with no pre-set goal in mind. The key is to start off by setting parameters to an experiment so a marketer can ask a specific question regarding how altering budget allocation in each channel affects overall outcomes. It is also important to look at different sources of information, rather than just keep on looking at a last-click attribution tool that only gives you the very end of a customer journey, not the beginning or middle.
“You need to start out with experiments by asking very clear questions of how channels are working together and how you can test to see the impact of putting more budget into one channel than another,” she says.
“To do this, it’s important to get away from a mindset where marketers always have the same source of truth that is never questioned. That is why we, in addition to our platform specific lift tools, also offer free, open-source solutions for geo experimentation and marketing mix modelling, to allow brands to either work with us or use their own analysts to find out what happens when you look beyond last click and start shifting budget allocations to where they can deliver better efficiency.”
Experiment with marketing mixes
A case in point is online store JD Williams. It wanted to reach women in the UK more cost-effectively and so ran a cross-publisher conversion lift study to compare paid search to Facebook advertising. It found retargeting members of its core audience who had visited its site led to incremental orders that were two and a half times more cost-effective than PPC. It also found winning new customers was three and half times more cost-effective.
Siân Worthington, head of paid social and display at N Brown Group, which owns JD Williams, says the test allowed it “to confidently adapt our strategy and drive growth across the full marketing mix”.
Experimentation might show your brand already has the right budget allocation across channels. Alternatively, it may find that budget needs to be reallocated to power up channels that deliver more optimised campaigns.
Either way, a marketing team will never know if there is room for improvement until it starts to ask whether campaigns are driving incremental sales or simply over-rewarding channels for delivering customers they would have won anyway. Once the issue is raised, and the value of last-click attribution is questioned, brands can start on a journey to discover if they are fully optimised, or if there is an undervalued channel in the mix that could deliver incremental sales more efficiently. ■
Find out more about GeofLift and the Robyn automated marketing mix modelling open-source code.
Brands optimising their channel mixes