Before You Adopt an Omnichannel Strategy, Get the Attribution Recognition Right
As consumers spend more more time online across different devices, marketers need to develop strategies to reach them across as many touchpoints as possible. And though many marketers want to develop an omnichannel strategy, they lack an ability to measure which pieces of their campaigns drive the best results.
Despite the leaps and bounds digital advertising has made with the use of data, and its claim as the most measurable medium, it still lags behind traditional tactics like direct mail in measuring ROI.
For brands to adopt omnichannel—and for digital to finally grab that “most measurable” crown—there needs to be a greater investment in understanding how to properly attribute recognition to the digital channel when it helps drive campaign goals. The responsibility doesn’t fall solely on brands, either; vendors must play a role, too.
The Largest Direct Marketing Expenditure
Direct mail is still one of the largest direct marketing expenditures, with hundreds of millions of dollars invested, part of which covers technology and analytics that measure the success and justify the spend. The natural extension for these direct marketers is digital, which opens up worthwhile multitouch opportunities. US consumers used 3.3 Internet-connected devices on average last year.
Meanwhile, many consumers view laptops and smartphones as “partner devices” and will switch between the two to gather more information, according to research by Millward Brown
The Investment Gap
Brands that invest hundreds of millions annually in direct mail may dip their toes in the water of digital with relatively small investments of $10 million or so (and even those investments are sometimes spread out over multiple years).
It’s difficult for these brands to prove quantitatively they need to be online. Brands that have been using sophisticated data and segmentation tools for decades need to show that transferring marketing dollars to digital brings a return.
Brands that still invest heavily in direct mail and print have come to rely on the depth of ROI data they have. This is one key reason why they haven’t taken a chance on digital.
Those marketers may have detailed information about their offline targets; information may include their names, where they live, as well as estimated household income, disposable income, and often, behavioral attributes. Most marketers assume digital only offers segmentation based on demographics and perceived interests, which means many marketers don’t fully grasp what’s possible in digital and the kind of capabilities they can actually use.
Some marketers simply go about the extension from offline to online all wrong. It is often not enough for brands or agencies to “transfer” their segments by building online segments from a mere Word document that describes the offline segments.
All the robust data that went into creating the offline segments (i.e., actual transactional data, household-level demographics, household-level financial capacity data, etc.) can be completely lost, so while the brand is now better directed and reporting on these digital segments, there’s no visibility into whether these are the right online segments with the exception that they “look” the same.
A Closed-Loop System
Effective direct omnichannel marketing delivers repeat messaging to the same consumer and takes them through the conversion loop. The same person typically has to see the same message across multiple channels for it to be effective. There’s a buzzword a lot of marketers have heard—closed-loop attribution—that’s designed to help them understand which pieces of their omnichannels efforts are advancing their intended goals.
A closed-loop system can help marketers predict results. In turn, they gain the confidence they are lacking. For example, a travel company may know that if it invests $25 million in traditional direct marketing, the company can predict X number of reservations, which generates $X in revenue. The company needs to know that if it extends its budget across channels, it can see how spending $X in direct mail yielded a certain result, compared to the $Y it spent on mobile, and can then fine-tune its spending for maximum ROI.
Measurement Takes Time
Justified as the need to prove ROI upfront may be, marketers also need to make a leap of faith into omnichannel with the knowledge that the level of measurement they desire will take some time. The systems they use to attribute and measure their direct mail advertising were not built in a day, and further investment in digital measurement is necessary to move things forward.
There’s also an onus on the vendors trying to fulfill the need for attribution. If vendors expect marketers to invest in omnichannel solutions, they need to raise the bar on their side, too. Digital is widely touted as the most-measurable medium, but the truth is that it isn’t quite there yet. There is unrealized potential, but the most effective solutions will take into account the kind of metrics that offline marketers rely on.
Data onboarding, cookie matching, and email reverse appends are all smaller tactics that form a closed-loop solution. By breaking attribution down into smaller chunks and showing traditional offline direct marketers how each piece works with their existing systems and allows them to predict results, an omnichannel solution can be most effective.
There is a give and take at play here, and for both sides to be successful, they need to encourage each other to grow mutually. Marketers have to be comfortable they will get the data and metrics that they can base all their campaign decisions on. And vendors, for all their claims, need to start providing this comfort and justifying further investment.
Previously published by MarketingProfs.
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