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Posted on 02/02/2011 by Don Ryan

Solving the Issue of Cross-Channel Revenue Attribution

Recently, I participated in a dialogue with other members of the Forrester Customer Intelligence Community dealing with cross-channel revenue attribution. Although the original question had to do with what software tools are available to tackle this issue, there is much more to consider.

The Complexity of Cross-Channel Attribution
Attribution of business results to marketing activities has become increasingly complex as customers are being stimulated with advertising messages through multiple media channels and are also being encouraged to respond through multiple channels according to their own preferences. Without a simple, direct link from stimulus to response, the ability to attribute revenue or other business results accurately to their appropriate causes is highly problematic.

Even when the customer contact and response data are brought together, the task is formidable, especially when mass media is involved or if word of mouth or social networking is in the mix. While everyone acknowledges this problem, there isn’t a foolproof way to address it.

In many cases, firms simply ignore the problem and do their best to track the performance of each media activity independently. Others have tried multiple approaches, using research, test and control populations, and loyalty programs to form the missing link. Another approach, first popularized in the CPG industry, is marketing mix modeling.

Marketing Mix Modeling for Solving Cross-channel Attribution
For the past ten years or more, firms have been trying to apply mix modeling, a statistical methodology that infers causality from historical data, to apportion credit in driving business results to various sources. As mentioned earlier, this technique has been used extensively in the CPG industry due to its general lack of trackable media, although it is now being used more extensively among other industries.

In fact, at iKnowtion we've used mix modeling to help non-CPG firms with the issue of attribution. However, I’d be the first to tell you that the technique is not ideal. There are challenges with data aggregation, lack of historical information, shifting marketplace factors, and other issues that can confound this type of analysis. Nonetheless, despite its drawbacks it can be useful in certain circumstances, as long as the findings are interpreted appropriately.

If you are looking to solve your attribution issue, my advice would be to consider marketing mix modeling, but make sure you speak with some firms that have used it and who will give a straightforward and unbiased opinion.

For more information about how iKnowtion has solved for cross-channel attribution, just download our case, Media Effectiveness and Strategy Development or visit our website at www.iknowtion.com.
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Posted by on 02/02/2011 10:29 AM
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