Imagine the adrenaline pump that astronaut Neil Armstrong and his crew must have felt, preparing to hurdle through space with the intention of landing on the moon. And, imagine having to entrust your very life to the veracity of the extensive research done to prepare for such a historic journey.
“Research is creating new knowledge.”
– Neil Armstrong, Apollo 11 Astronaut
In the world of online advertising, we too, stand on a virtual precipice, waiting to launch into a new galaxy of possibilities, because of progress made in perfecting a robust attribution model. And we too are entirely dependant on the accuracy of research to make all the decisions necessary before the official launch of any marketing mission.
Mr. Armstrong knew a thing or two about preparing for the next frontier. His quote, “Research is creating new knowledge” can definitely be applied to online advertising.
Lift-off (in our industry) can only occur after a sequence of successful advertising & consumer interactions. It’s researching the particulars of those interactions, components, and costs that make an online ad campaign successful.
But research is only as good as the data at hand. What if all the communication and navigation/tracking systems between Cape Kennedy and Apollo 11, went dark for the majority of its mission? The spaceship and the lives of astronauts would undeniably be lost. Fortunately, in online media, lives aren’t at stake…but dollars, jobs, and livelihoods certainly are.
And if mission critical data in online advertising went dark for a majority of your next online marketing campaign–there is no doubt that you could be lost.
Houston, we have a problem: because that blackout is exactly what’s happening.
The inherent problem is this: if four Internet ads contribute to a transaction; today’s outdated systems allocate entire credit to the very last ad, completely ignoring the first three ads which actually drove the revenue.
No data for a majority of the mission. Today, outdated online ad tracking systems erroneously give 100% credit to the very last clicked or last viewed ad before a transaction.
Zero credit to revenue drivers, and 100% credit to the last ad placed. Scared?
For an Internet advertising industry spending $70 billion worldwide each year–this isn’t just any problem, it’s a $20 billion problem.
Now enter a robust attribution model. Attribution modeling done right takes an enormous amount of data, and reduces complexity into simplicity.
At a basic level, C3 assigns credit to Originators, Assists, and Converters within a transaction. An attribution model should capture every online media source from the top of the funnel where sales originate…down to the very bottom of the funnel. So in a $100 transaction, an Originator would receive a fraction of $100 attributed to them—and the Assist and Converter would also receive fractional credit of the $100 attributed respectively.
100% of revenue credit is attributed and split among Originators, Assists, and Converters–accounting for the actual drivers of revenue. Then revenue and respective costs from paid media sources converge in a single, elegant number in the attribution model: Attributed Revenue-to-Spend Ratio (ARSR™).
It’s a simple ratio any marketer can grasp: attributed revenue divided by corresponding spend. If you have a 4.0 ratio for a specific keyword, or specific Display campaign–you’re getting $4.00 in revenue for every dollar spent on that particular media source. Conversely, if you have an ARSR of 1.25 for a particular media buy—you’re getting $1.25 in revenue for every dollar spent there. You don’t have to be a rocket scientist.
For brands that don’t transact dollars on their site, they simply assign a revenue value for: a dealer zip code lookup, building a vehicle online, or scheduling an appointment online.
ARSR delivers knowledge ready to act on, versus information barely ready for analysis. The special sauce of the attribution model is the numerator of the ratio (attributed revenue). Media buyers easily identify media sources with high numbers to scale, and low numbers to cut or improve. Instead of taking weeks of analysis, it’s about an hour.
But does this new knowledge just keep your job, or get you promoted to new levels? In the longest running attribution study of its kind (2 yrs) the results are electrifying:
a) Seven-figures in profit from the advertiser’s now higher ROI ad spend
b) Display ROI improvement of 160%
c) Search ROI improvement of 98%
d) Accurate economic model to measure affiliate performance
Bottom line: millions of dollars in profit.
One small step for man….one giant leap online. We have lift-off.