Direct Marketing Attribution: Passes, Catches and Dots
While speaking at DMA2010 Conference & Exhibition several weeks ago, I had a chance to meet dozens of direct marketers who were just starting to learn about attribution management. I tried to share some key direct marketing-specific truisms about attribution that would increase their understanding of the topic, as well as enable more informed decisions about pursuing it as a marketing optimization strategy.
This information fell into the following five areas:
1. Passing the Ball
Long ago, traditional direct mail marketers established the quantifiable marketing paradigm that today is at the core of many channels, from search marketing to DRTV. But inherent within direct marketers' mindsets has always been the drive to associate a conversion—and its revenue—with a single initiative that produced it. To calculate ROI, you simply divided the revenue produced by a campaign by its total cost.
But with attribution management, where sophisticated technology now enables marketers to see how certain channels give and receive assists in producing conversions from each other, credit is now shared among channels. In effect, each channel now acknowledges who passed it the ball that enabled it to shoot and score. The objective is for the entire team wins (overall ROI goes up) and not for any one player to score the most points. So the paradigm for direct marketing's ROI has shifted, and so must the mindset of individual channel marketers and their organizations as a whole.
2. Catching the Ball
This shift obviously has its flip-side. Direct marketers now have the opportunity to claim "assists" that their efforts and investments provide to conversions via other channels. Where a direct mail campaign previously might have driven a percentage of shoppers to convert online or in-store without the ability to recognize that direct mail was the catalyst, attribution now provides the ability to connect the dots between that campaign and all the other assists that lead to that conversion. It also monetarily quantifies the influence that each channel (and each assist) had on the eventual transaction. What this means to direct marketers is that they get to catch the ball as well—and get credit for some of their team's scoring.
So some of the credit (ROI) that direct marketers may relinquish when other channels provide assists to their conversions is recouped when it becomes apparent how much influence their campaigns have on conversions that take place elsewhere.
3. Connecting the Dots
It's obvious that unless direct marketers can connect the dots between individuals who receive their campaigns and those who convert elsewhere, attribution management cannot take place.
A way to do this via direct mail is to include an ID code on every mail piece that is unique to the individual as well as to the campaign. Within the direct mail offer should be a call to action that provides incentive for the recipient to provide that ID code when responding to the campaign; whether it be online, via phone, or in-store. The incentive could be an extended warranty, a discount, a product registration or Web-based management of accounts. When the recipient of the campaign responds through the company's website, the cookies associated with any previous online activity (searches, views of display ads, website visits, etc.) will be recognized and captured by the website—where the recipient will be prompted to enter her unique ID; thereby, connecting her online activity (recorded in the cookies) to the direct mail activity (designated by the ID). This enables attribution.
If the direct mail recipient responds by phone or in-store rather than online, an additional step must be taken to connect the dots. The inbound telesales rep or checkout clerk at the store can ask customers for their unique IDs using the same incentive posed on the piece,and record that ID as part of the transaction. The additional step must then be inserted into the process to drive that customer back to the website—perhaps via an email confirmation sent by the telesales rep requiring the recipient to click a "Confirm" button to get a warranty or discount or her product. Or perhaps the cash register receipt is printed with instructions to go online and enter the ID code to claim that value-add deliverable. In either case, the act of going back online will associate all her previously cookied online activities with the transaction associated with the unique ID from the original direct mail campaign.
4. No Dots, No Worries …
If connecting the dots in the manner just described isn't possible, there is still a method to give credit to the direct marketing channel for its influence on overall conversions.
When marketers do not have cookie-level data to connect transactions associated with their campaigns to their online activity, they can instead look at the delta between their organization's typical transaction activity and the activity over the time period immediately following direct mail pieces arriving in people's mailboxes. In an admittedly simplistic example, if the average daily conversion volume is 800 and it swells to 1,200 the day the direct mail campaign hits and tails off over five days until it's back to 800, attribution software can associate the delta between typical transaction levels and heightened transaction levels with the channel that produced them—and attribute credit for the resulting increased revenue accordingly.
In reality, attribution management software will look at dozens, if not hundreds, of criteria about the campaign and resulting performance in order to calculate direct mail's impact.
5. Finally, Use What You Know
As complex as attribution may seem to those who don't yet do it, when it is done correctly, it should be fairly simple. Companies that provide services in this area should have the burden of providing direct marketers with the exact same analytics—the same critical success metrics that they already used—but adjusted to take cross-channel influence into account. By doing this, marketers will continue to use what they already know to support their decisions—but will be doing so with much more accurate information that takes both "assists" and "catches" into account.