Marketing Attribution – Worth the Effort?

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Challenge: Considering the Challenges of Marketing Attribution, How Deep Should You Go?

Marketing attribution is a hot topic. You need to know which programs are worth the effort and expense and marketing must demonstrate its contribution to revenue. In fact, both marketing and sales must both carefully plan and measure their unique contributions to more accurately predict revenue.

However, Sergio Maldonado’s recent guest post on Scott Brinker’s Chief Martec blog raised some very important questions about the veracity of marketing attribution. The article challenging various aspects of marketing attribution is timely and worth a careful read. It also caused me to re-evaluate my ongoing efforts to focus on attribution.

The journey starts with developing a standardized way to tag Leads, Contacts and Opportunities to marketing campaigns, followed by a methodology to differentiate sales from marketing contribution (as well as sourced versus influenced). Adding various program costs and labor investment to the formula provides a more complete picture. However, this tells just part of the story as it analyzes attribution from first ‘form conversion’ to closed deal, without consideration for pre-conversion activities.

Tracking and attributing the activity of all stakeholders before form conversion is more difficult. Furthermore, attribution-to-revenue calculations only provide results for Contacts associated with a closed-won Opportunity, whereas other Leads and Contacts not associated often influence the deal. Therefore, this methodology ignores Leads and Contacts that influence but are not associated with the opportunity as well as all awareness phase marketing touchpoints that positively affected the opportunity.

By focusing only on campaigns with direct attribution, marketing may erroneously optimize for those programs only – at the expense of awareness and early stage funnel activities where attribution is much more difficult. The resulting focus on ‘directly attributable campaigns’ that occur at or after the first form conversion can easily result in a decreased ‘share of voice’ and ignore important early stage touch points. Often, sales prospects are unaware they have a problem or they’re unfamiliar with solutions better suited to their challenge. Awareness programs focusing on the earliest stages of the sales cycle are key to growing sales in the long run.

So if strict adherence to attribution metrics will lead to sub-optimal marketing resource allocation, should marketing invest time and resources in it? Unequivocally yes. At the highest level, Lord Kelvin was right when he said, “When you can measure what you are speaking about, and express it in numbers, you know something about it.” The attribution process is not at fault here (though it can and will certainly improve), rather the issue is how this data is used to make marketing investment decisions. Even though early stage program investments are not measurable in the same way that later stage programs are, they remain an important part of the marketing mix. Therefore, it is incumbent upon the marketing team to explain and defend these ‘awareness’ investments for the long-term health of the organization. The marketing team should also look for important correlations to justify these programs (correlations of direct/organic traffic with various programs, for instance).

In my opinion, marketing must continue to pursue attribution while keeping in mind the limitations of the current systems. Marketing investments should be made recognizing that the team cannot measure all aspects of the marketing mix, and more importantly, additional attribution effort investments should be made with an eye on overall effectiveness. While imperfect, I am reminded of the saying, ‘Even one candle sheds a lot of light in a dark room.’ Without attribution, marketing has no guidance about future investments.  But at the same time, marketing programs with impacts that are difficult to measure must not be ignored.

[Important note: Management should also look at the costs and benefits of the attribution process itself to ensure it is worth the effort. Tracking every last ounce of attribution adds significantly in terms of labor and cost, and at some point, these programs reach diminishing marginal returns. How a marketing team should optimize its spend on marketing attribution is a discussion for another time.]

Lesson: Spending time and resources on marketing attribution is critical, but it is just as crucial to realize program and system limitations to make truly optimized investment decisions.

 

Want to Improve Your Program Effectiveness by 10x?

Challenge: Companies promote their products and services via direct marketing, advertising, events and more – but still can’t achieve the impact they need. How about a 10x boost?

We are all bombarded with messages every day – online, offline and even when we are on the sidelines.  Therefore buyers have been desensitized to vendors claims – faster, better, cheaper and will even make you more attractive! First off – we make every attempt to ignore ads thrust at us: we skip ads with our DVR, we try to ignore banner ads on websites and we page quickly past print ads. When we want ‘real’ or ‘untainted’ advice, we look for online reviews by other users.  Amazon’s use of product reviews has completely transformed the buying process. We reach out to our social networks to find feedback from customers just like us. What is the value of a positive review? Huge. Just check out all the controversy about Yelp recommendations – because the reviews matter.

Depending on the study, analysts report that 70% or more of the purchase process is made before the buyer visits the vendor’s website. The dramatic rise of social media use by companies further explains this trend as they try to reach up further into the buying cycle. There are an increasing number of social groups for B2B as well.  Certainly LinkedIn has many groups targeted at various professions.  PracticeFusion and Spiceworks are focused social communities serving medical IT professionals. These are communities where professionals can get answers to their questions and read reviews of products.

In the end, any vendor claim is just that – a claim.  However a claim made by an actual user is trusted and valued.  Hence, in my math, vendor claims are worth one point and user claims are worth ten points.  While not scientific, I think we would all agree that real user feedback is the real deal.  So how do you facilitate and support these reviews, comments and posts?  You need customer advocates – customers who love your company and product so much that they are willing to spend time telling others.  The experience of using your product must be so compelling that they want to raise their own reputation by talking about it. The customer service and other support you provide around your product must surprise and exceed your customer expectations. Your customers need to think –  ‘Wow, that was great!’

So how do you give your customers this goose-bump moment? You need to open your company and your product up to your buyers by doing some or any of the following:

  • Give them free product or other recognition in return for product feedback
  • Be honest and humble when they give you candid feedback
  • Listen and respond to their input; more importantly update your product with their feedback
  • Show them you care – by giving them first access to your next product
  • When you stumble, acknowledge it and correct it
  • Make your product dramatically better than anything they have seen before

In sum, give them reasons to be so excited about your product or company that they want to share their experience. Help them reinforce their status as mavens in the community by giving them something new to share with the community.  Show your lead customers the respect they deserve.

Lesson: You post about your product – 1 point.  Your customer posts about your product – 10 points.  Find ways to create groups of advocates who will support and amplify your efforts.

Branding vs Lead Gen – Can’t we just get along?

Creating an Umbrella for both Branding and Lead Gen

Challenge: Corporate brand guidelines can often stifle tactical lead generation

Every company lives by driving revenue.  In the case of B2B technology companies, marketing ensures revenue results by driving the quality and quantity of the prospects in the pipeline in order for the sales organization to reach its sales targets.  Marketing provides the fuel with which the sales organization can meet and exceed business plan targets.

Many times brand guidelines can be seen (or enforced) in a way that limits pipeline creation.  This can take the form of narrowly interpreting brand principles that stifle advertising innovation or can limit more tactical/direct messaging that drives advertising response rates.  That said, the marketer needs to protect the brand and ensure that every outbound message reinforces key tenets and principles. Color palettes and visual IDs are frequently not the issue here. 

A formal messaging ladder that encompasses key product differentiation is what can really drive alignment.  Messaging needs to be detailed enough to enable the prospect to understand capabilities and differentiation while being consistent with higher level brand promises.  This can be challenging for large organizations with wide product portfolios,  where the messaging ladder also needs to be updated (sometimes frequently) to support the product portfolio.  There needs to be a clear set of messages that marketers can use to create and execute programs – while remaining brand compliant.  In the ideal scenario, the marketing group clearly understands the messaging platform and all creative is developed from the ground up in a way that is consistent with the overall brand. 

Scenarios where brand trumps demand generation must be avoided, and brand guidelines should be broad enough to support product and solution messaging that drive awareness, interest and consideration.  The purpose of the brand guidelines is to leverage messages over the long run and not limit pipeline in the short run. Brand should serve the needs of pipeline creation – while ensuring consistency of overall message, voice and visual structures and constructs. 

I am reminded about a time many years ago when my kids were little and they asked me what I did at work.  What is ‘marketing’ after all?  My answer at the time was, “marketing helps sales people sell.”  Focusing on brand purity at the expense of pipeline development seems to be putting the cart before the horse.  So brand guidelines need to provide a framework where demand generation can survive, grow and become increasingly effective.     

Lesson: Brand guidelines should serve product marketing and demand generation – not the other way around.

Freemium and Frictionless

Challenge:  While companies are chasing freemium and frictionless sales motions, they are missing the main point.

It’s clear that the freemium sales model, where prospects can download products for free, has taken off.  Successful companies like Dropbox are clear winners, but will this work for enterprise B2B marketers?  Well Box, Zendesk, Atlassian, Splunk and others prove that it certainly can.  It’s obviously a marketing model that works.  Prospects try a free version and upgrade to a more robust, paid version easily and seamlessly. This breathes life into ‘see-try-buy’ or frictionless sales models.  So is that all we need?  Freemium sales model is our salvation?

The challenge is that you can’t automate or accelerate a bad experience.  What is important to deliver is a positive and engaging customer experience, and it must be enticing very quickly.  Your prospect must be able to easily understand how to use your product and find it engaging right away.  If they need training or other have requirements to meet, you may be setting yourself up for disaster.  Your prospects will freely download your application only to be confused and wander off – not upgrading to the paid version.  In this outcome, you have just proven why yours is not the right solution.  Even if you convert a small portion of users, you’re building up a base of prospects who now ‘know’ that your solution is not the right one.

So you need to consider a few things as you pursue a freemium strategy.  First, do you have a process where your prospects will be highly successful in their free trial of your product?  If the product is not immediately intuitive and usable, can you provide supporting materials to make their usage successful?  Then, do you have a process either inside the product or as a separate communication path to help them explore your product and ensure a successful outcome?  Finally, what is your process to monitor usage and outcomes from your trial/free users?  How will you know if the process is working?  To quote Stephen Covey, “Start with the end in mind,” or in this case, start with a plan to measure success.  This may be tracking trial usage, getting usage surveys, measuring conversion rates and more.

Strangely enough, your path down a freemium model may start with improving or adding components to the product itself.  A more fool-proof usage process will drive greater success.   Constant learning and adjustment will yield great results and hopefully drive that hockey-stick growth curve we all seek.

Lesson: Charity starts at home.  Give a hard look at your product before chasing a freemium model.

Money for Nothing and Leads for Free

Challenge: Turn your customers into your best lead generators.   

Salespeople have very short memories.  Certainly the old adage, “what have you done for me lately” springs to mind.  Unfortunately, lead generation programs often have diminishing marginal returns – meaning that as you look to drive more leads, often the conversion rate to sales will drop.  So just driving more leads will not necessarily drive profitable growth.  So what is a marketer to do?

No one can better advocate for you than your customers.  Leveraging your customers to speak to your prospects is an ideal way to drive new leads.  Current customers understand the challenges prospective customers face and exactly how your solution can address their needs.  The materials coming from your company are ‘discounted’ in terms of their value.  Prospects come to your website for data sheets, demonstrations, solutions and even customer case studies and videos.  However, even case studies sometimes feel ‘produced’ by your organization.  Prospective customers are looking for ‘the real story’ about your organization, and they’d rather get it from other customers.  But how can you systematically gather the details about your current customers in terms of their deployment, usage and benefits?  You need information like industry, geography, use case, competitive comparisons, deployment, integration, value realized and other key dimensions related to your outbound and inbound marketing. 

Gathering data is the first step, and encouraging specific groups of customers to take certain actions on your behalf is the second step.  Both are challenging tasks, especially the latter because these customers are busy and have many other things to do BEFORE helping you!  The solution – make it fun and competitive.  There is a new social media tool that encourages your customers to become advocates – it is called Influitive (www.influitive.com).  This tool uses gamification to make it fun AND easy to be an advocate for your company.  The concept of gamification (gam(e) +‎ -ification) is hot (http://gamification.org/) in B2B marketing.  With Influitive, you create challenges for your customers and reward them with points as they meet those challenges.  For instance, you might reward them for Liking you on Facebook, re-tweeting one of your posts, commenting on a blog post, serving as a customer reference, taking a customer reference sales call, or any number of other actions.  Your customers can use these points for value added items like training, time with executive staff, access to a product roadmap presentation, company apparel or any number of other items.  You’re limited only by your creativity!

The result?  You’re able to create your own competitive environment for customer advocates to earn points by advocating for your company and its solutions.  You turn your best and most loyal customers into an extension of your marketing team.  They can take natural steps and actions that fit within their interest and ability.  This product is currently in beta – so stay tuned to see more developments.

Lesson: Leverage your most valuable asset – your customers – to drive new prospects!

CPC Part 6 – Alternate Search Engines – Can Anyone Compete with Google?

Challenge: Should I consider the time and effort involved to run a separate PPC campaign alongside of Google?
Lesson: Google is king – in terms of volume and quality. Marchex is one of the only other PPC programs we have been able to successful run alongside Google.

Challenge: Should I consider the time and effort involved to run a separate PPC campaign alongside of Google?

Running a PPC program takes time and effort to structure, optimize, manage, etc…  Is it worth the time to run with smaller search engines like Bing, Yahoo, Marchex, Business.com and others?  Of course, the answer is – it depends. Here is a quick list of many B2B search engines.

Google makes it relatively easy to export your program so you can import into another search engine.  In fact, other search engines may be motivated enough for your business to take this export and build your campaign for you.  In some cases I have seen some who are willing to even replicate the changes to the program over time.

However, even with this assistance, you need to test the search engine to see the comparative cost per lead and revenue generated.  You may find that despite a duplicated program, the source of traffic from other engines decreases the quality of leads acquired.  The only way to know for certain is to run a test.  Based on my experience with B2B enterprise IT products, I have not yet been successful with Yahoo or MSN/Bing.  While I tried several experiments and ongoing optimization, I could not ramp the quantity of the program as well as the quality of the programs I had run with Google to make this worth the effort.  On the other hand, I have been able to run successful programs with Marchex.  While not the same scale as my Google campaigns, the quality and volume justified their ongoing investment.

There are new search engines and innovations happening all the time.  So keep your eyes open.  I would also be open to hearing your experience!

Lesson:  Google is king – in terms of volume and quality.  Marchex is one of the only other PPC programs we have been able to successful run alongside Google.

Special thanks to Lindsey Walsh for her assistance with this post.  You can contact Lindsey at: contact@searchengineppc.com.

CPC Part 5 – PPC Closed Loop Reporting – The Holy Grail

Challenge: I think my PPC program is performing well – but how do I prove it?
Lesson: The true proof of any marketing campaign is comparing program costs to revenues (ideally gross margin). Closed loop PPC revenue reporting is possible with a bit of effort and analysis and will guide your future decisions.

Challenge: I think my PPC program is performing well – but how do I prove it?

In a previous blog, we talked about tracking metrics like CPC and CPL.  These are good measures as you get started, however the real payoff is in driving revenue.  Given the relatively simple integrations between search engines like Google and SFA systems like Salesforce.com, you can track leads driven by PPC into SFA and through to a closed sale. 

Basic closed loop reporting is pretty simple and can be done by combining cost data from AdWords with sales progression shown in your SFA program.  If you are tracking Ad Group and Keyword sources, you can then run reports on closed revenue by these fields.  Generally, I have found, that tracking down to an Ad Group level is sufficient level of detail given that your PPC campaign has relatively small ad groups.  Even starting at the Campaign level can provide satisfactory results when starting out.  This can immediately give you visibility into which areas are driving revenue and which are not.  You can then use this information to guide your future optimization and bids in your PPC engines.

That said, what is best is to compare you spend to the revenue generated on an ad group basis.  This requires the integration of spend data by ad group with the revenue data by ad group from your SFA program.  You need to work out time periods and have similar naming structures in both sets of data to effectively build this integration.  While not exactly simple, this can be done via Excel and matched on a weekly basis.  The resulting reports will directly show ad group spend compared to revenue.  The remaining challenge is to account for the average sales cycle – since your spend today may not pay off in sales for weeks or months.  To the degree that your sales cycle is longer than 2-3 months, you may also need to consider a means to time shift your PPC spend to more closely match your PPC revenue.

Sales cycle time adds further complications in that changes you make to optimize your ad groups today will not show the full impact until these new leads have a chance to run through your average sales cycle time.  It takes significant discipline to wait this long to evaluate the impact of these changes.  Being impatient, my preference is to identify early indicators of future revenue.  This can be the lead rating or status of these leads.  If you see a spike in the Junk or Unqualified lead rating after a change is made, you can be somewhat sure that revenue will likely drop in the future from that ad group since the conversion rate to qualified lead has immediately dropped.  While not perfect, this allows you to make faster assessments of your ad group optimization efforts.

You may be surprised at what you find.  In the past, we have found that some campaigns looked great on a cost per lead basis. However, later it was discovered that these leads were not closing in terms of revenue. At this level of analysis you may find that your sales team is not well trained on how to position a certain product or that the product itself does not compete well in the marketplace.  So you may be generating quality leads but there are other issues in the sales funnel that are preventing this ad group from being a real success in terms of revenue. 

Lesson:  The true proof of any marketing campaign is comparing program costs to revenues (ideally gross margin).  Closed loop PPC revenue reporting is possible with a bit of effort and analysis and will guide your future decisions.

CPC Part 4 – Are You Getting Your PPC Money’s Worth?

Challenge: How do you evaluate the effectiveness of your pay per click spending?
Lesson: If you don’t measure, any road will take you there. Decide on which metrics are important to your organization and measure them weekly. Over time you will optimize your metrics and reporting which will, in turn, optimize your PPC program.

Challenge: How do you evaluate the effectiveness of your pay per click spending?

So you have your PPC program running, optimized and well designed landing pages.  Are you doing as well as you could?  What metrics should you use to evaluate your program?  You should evaluate your program at several levels.  

First, there are a few metrics built into your PPC program that can be useful – these are cost per click (CPC) and cost per lead (CPL).  CPC gives you a good idea of your traffic costs in order to compare to other opportunities.  That only gets you so far, as lead generation campaigns have to produce leads to be effective.  Thus, CPL is an important metric in any B2B search marketing campaign.  You can measure CPL directly in AdWords by placing their conversion tracking codes on your post-registration form pages.  You want to compare your CPL to other marketing programs you are running.  How does this compare to your direct mail campaign or your lunch and learn program?  In the end, PPC is only one area out of many marketing programs where you need to balance your overall marketing spend.

The next level of analysis is looking at revenue generated from your program.  The great news is that most SFA programs like Salesforce.com and others provide great ways to track results using Campaigns and tracking fields. You can pass key variables to your SFA system like: search term, keyword, Ad Group, or campaign so you can then report on how well a given ad group, key word or campaign is performing in terms of lead qualification or revenue generated.  With relatively simple SFA structures and usage, you can track the progress of these lead throughout the sales process.  Here is a really useful guide to setting up AdWords conversion tracking.

Typically I have found that leads generated by PPC programs are frequently the first step in the sales process where other programs like webinars help to qualify and move these prospects along.  The good news is that the leads coming from PPC into your SFA systems will frequently be net new leads and therefore you can then trace lifetime of this lead throughout the sales process.

What is required is the ability to integrate all future activity into this lead record.  This may require a marketing automation system like Eloqua, Marketo, Aprimo or others.  See more on this in other blog….

Lesson:  If you don’t measure, any road will take you there.  Decide on which metrics are important to your organization and measure them weekly.  Over time you will optimize your metrics and reporting which will, in turn, optimize your PPC program.

Special thanks to Lindsey Walsh for her assistance with this post.  You can contact Lindsey at: contact@searchengineppc.com.