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2010 was a year in which I personally got a lot smarter about Web analytics and tracking. My biggest epiphany was around the importance of multi-channel, multi-click attribution. Attribution, in a nutshell, is the process of stitching together the enter click path a user takes on the way to a conversion. This includes multi-channel (they might have clicked a banner ad, then Facebook, then a PPC ad on Google) as well as multi-click (did they click on five AdWords keywords before converting?).
Today, most advertisers ignore attribution entirely, instead focusing on “last click attribution”, i.e., the very last click gets 100% of the credit. If you think about this for more than a few seconds, it’s a pretty ridiculous way to measure performance. While there are definitely conversions that come from just the last click, depending on the complexity of the purchase, anywhere from 20% to 80% or 90% of the conversions are likely to have been influenced by clicks prior to the last one.
And if you don’t give these upstream clicks any credit, you may end up cutting your marketing budget on the very clicks that started the funnel that eventually resulted in a sale. Moreover, you are likely to give too much credit to the end of the funnel. While you might not expect an SEM guy to say this, the truth is that this usually means that SEM is being over-valued if you don’t set up proper attribution!
Most advertisers don’t bother with attribution because they either a) don’t know it exists or b) think it’s too hard to properly set up. Awareness increased and complexity decreased in 2010, and I’m confident that these trends will continue in 2011. There are already two strong 3rd party companies providing attribution management (Convertro and ClearSaleing) and – you didn’t hear it from me – Google will be slowly integrating multi-channel, multi-click attribution into Analytics in 2011. Now that Google is no longer just a search business (with the acquisition of DoubleClick’s display business, as well as YouTube), there’s now more of an incentive for Google to give credit beyond the last click.
Setting up proper attribution is smart for two reasons: first, it gives you more accurate measurement of your marketing budget. This allows you to make smart decisions about display, Facebook, video, mobile, and all the other trends I’ve been talking about in this document. Second, it gives you a huge competitive advantage over all of your competitors who aren’t doing it. Let them over-spend for last-click keywords while you invest in a wider funnel of sales!
Another area of tracking that saw a lot of, pardon the pun, traction in 2010 was phone tracking. Phone tracking, as the name implies, allows you to attribute a phone call back to the exact keyword that drove the call. This is usually done by dynamically serving a different phone number on a landing page for every keyword that drives a click. There are at least a half dozen companies that offer this service to advertisers (ClickPath, CallSource, VoiceStar, Mongoose Metrics, IfByPhone). And not to be left out of the fray, Google is also toying with a variation of phone tracking, allowing AdWords advertisers to insert a unique phone number right into their ad text and tracking this back to the campaign (not as granular as the keyword-level tracking provided by the 3rd parties, but this could change).
Phone tracking is important for two reasons. First, stating the obvious, if your company closes a lot of your business via phone conversations, you need to figure out what’s making the phones ring! Second, by adding phone tracking into the mix, you may discover that certain keywords that you thought were duds are actually incredible performers. We’ve implemented phone tracking for a few clients and the data is often surprising.
The last tracking trend of 2010 – the “do not track” furor – was not a good one, at least from an advertiser perspective. A series of articles in The Wall Street Journal (sadly, written by a college classmate of mine) attacked cookie tracking, retargeting, and the sale of aggregated third party data, as an incredible invasion of consumer privacy. Consumer advocates and the FTC started to get involved and there has been talk about creating a “do not track” list similar to the “do not call” list that prevents telemarketers from calling you.
If consumers really acted en masse to block cookies and tracking, it would be a serious blow to online advertising. Our ability as online marketers to properly allocate budgets is entirely dependent on proper tracking. Without it, we are left with an offline-like world, where we must use surveys, focus groups, and intuition to determine who should see what ad, when, and why. My sense is that there is no need to panic about this at the moment. Most likely, we’ll see the big online giants like Google, eBay, and Amazon come together to suggest standards that address consumer concerns but still allow a reasonable level of measurement.