Marketing Attribution Problematic

1. Marketing Attribution Problematic michel.bruley@teradata.com Extract from various presentations: RPM Direct, Kevin Hillstrom, Teradata Aster, … September 2012

2. Mail TM Quote TM Sale TV Marketing Channels and Attribution Print

3. Mail TM Quote TM Sale TV Marketing Channels and Attribution Print Search Aggregator Web Quote Web Sale Banner email

4. Mail TM Quote TM Sale TV Marketing Channels and Attribution Print Search Aggregator Web Quote Web Sale Banner email

5. Mail TM Quote TM Sale TV Marketing Channels and Attribution Print Search Aggregator Web Quote Web Sale Banner email

6. Marketing Channels and Attribution Putting Response in Correct “Bucket” Putting Sales in Correct “Bucket” Calculating Media Cost per Sale Spending Next Tactical Marketing Dollar Building Media Specific Targeting Models Making Strategic Business Decisions

7. Individual Customer Identification Numbers • Marketing Source Codes • Name and Address Match • Factor Analysis • Dynamic Time Series Regression • Proportionately “Factor” Leftovers into Marketing Channels Channel Attribution Methodology

8. What is a latent conversion

9. What’s wrong with Google Analytics? • ROI is attributed to the last (latent) referrer (Most recent keyword, ad, email, blog etc.) What’s wrong with most recent? • Shoppers initiate search using broad categories • Later narrow down to product names/IDs • Perhaps then narrow to store brand • Broad categories don’t get the credit they (may) deserve • The only exception is direct type-in • Google Analytics takes the blame, though many web analytics tools work the same in a default implementation

10. Attribution examples Quiz: An existing customer receives a catalog on September 1. On September 2, the customer uses Google to search for merchandise, visits your website, and purchases an item. What % of the order do you allocate to catalogs, to search, and to organic brand loyalty? Quiz: An existing customer receives a catalog on September 1, receives e-mail marketing campaigns on September 7 and September 9, and purchases on your website on September 10, buying merchandise featured in your catalog and merchandise available only online. What % of the order do you allocate to catalogs, e-mail, and to organic brand loyalty? Quiz: An existing customer receives a catalog on August 1, and receives 17 e-mail marketing messages between 8/1 and 10/1. On 10/4, the customer uses Google to search for merchandise, visits, and buys an item. What % of the order do you allocate to catalogs, to e-mail, to search, and to organic brand loyalty?

11. Test + Results = Attribution Rules The beautiful thing about catalog marketing and e-mail marketing is that you can test, you can see what happens to other channels when you do not mail a catalog, when you do not send an e-mail campaign! Sample 80,000 twelve-month buyers with a valid e-mail address. Group 1 = 20,000: Catalogs = Yes, E-Mail = Yes Group 2 = 20,000: Catalogs = Yes, E-Mail = No Group 3 = 20,000: Catalogs = No, E-Mail = Yes Group 4 = 20,000: Catalogs = No, E-Mail = No Execute for a month, quarter, season, or year! In a controlled experiment, the results of your test tell you what impact catalog marketing and e-mail marketing have on other channels (search, mobile, social, display ads, affiliates), so you can set up reasonable attribution rules!

12. Some Results We have four test panels in this test. We sent one catalog and nine e-mail campaigns during a one-month timeframe

13. What Is The Organic Percentage? The organic percentage is possibly the most important metric a direct marketer / catalog brand can track. It is the percentage of demand that will be generated if no marketing exists. What about our example? Take the $5.80 generated in the no catalogs / no e-mail test panel, and divide it by the $11.37 generated in the catalogs + e-mail test panel. The result is 51%.

14. A 51% Organic Percentage • We must execute catalog and e-mail mail/holdout test panels, in order to properly estimate what our organic percentage is. • When the organic percentage is < 20%, your matchback/allocation process is generally accurate. • When the organic percentage is > 40%, matchbacks and allocation programs become increasingly inaccurate. • Does The Organic Percentage Vary? • Some customers are “highly organic”, while other customers require “large amounts of marketing”. There are HUGE profit opportunities in knowing this difference! • Customers who mail orders to a company or use the telephone to order require advertising. • Customers who combine catalogs and online channels are a “hybrid”, requiring much less advertising. • Customers who order online or in stores are highly organic, you can reduce advertising!

15. Key Takeaways Have the courage to execute both catalog mail/holdout tests and e-mail mail/holdout tests. Test four panels, test for a quarter or season or year if you can. The results are going to be breathtaking!. Catalogs: In many cases, orders that would have happened anyway are attributed to catalogs, causing us to spend way too much money mailing catalogs. E-Mail: E-Mail is frequently cannibalized by catalogs. E-Mail frequently causes Search/Mobile orders to happen. Search: Search is often the outcome of catalog marketing or e-mail marketing. Social/Mobile: In the early stages of a channel, sales are frequently cannibalized from existing channels, or the existing channels cause the sale to happen in the new channel. Over time, new channels become “organic”, and do not require old-school channels in order to create sales on their own. Tests can validate this.

16. Multi-Channel Customer Analysis • Business Question(s): • Prior to new product additions? • Is there any identifiable pattern of behavior prior to account closure? • If so, what does this pattern look like?

17. Value of Aster Data for Digital Marketing Aster Data Analysis • Click-stream • # of visitors, visitor location, browser type • Last click analysis • Online behavior • Common interaction behaviors • Optimal paths through website • A/B testing • Where to place this button, link, etc. • Search Optimization • Mix of paid per click and organic • Which search terms drive traffic, behaviors • Advertising Optimization • Conversion • How to optimize advertising placement • Where are shopping carts abandoned & why • Marketing Attribution • What % credit to give each referring channel or campaign + Teradata Adds… • Multi-channel (online & offline) campaign analysis • Complete customer interaction history • Marketing return on investment • Attribution + cost of conversion + Aprimo Adds… • Campaign management • Take action to influence behaviors • Marketing Resource Management • Take action to optimize marketing spend

18. Attribution Using Aster

19. Aster nPath Identifies the “Last Mile” Prepares multi-structured data • Stitches rows together by customer in a time-ordered view Scans all records to produce a complete set of paths • No need to define patterns in advance • Fully parallelized for top performance using MapReduce where SQL falls down Summarize output for business exploration • Rank order the most popular paths and yet represent the long tail too • All interaction patterns evaluated in a single pass Aster MapReduce Platform Step 1: Pivot data via nPath SQL-MapReduce Step 2: Run nPath SQL-MapReduce Java Logic

20. Aster nPathexample: Account Closure

21. Marketing Strategy for Success Where should I increase my Marketing Spend to drive higher ROI? Multi-Touch Attribution • Go beyond “last click” and identify which ads and channels perform the best • Quantify which ads lead (attribute) to conversion • Calculate true ROI on a per ad basis • Run time-sensitive promotions by knowing which ads convert the fastest. Customer Journey Leading to Purchase on Online Store