WTF is fractional attribution?
Attribution is an increasingly hot topic among brand marketers. Just last week at the Digiday Retail Summit, marketers from Target called it one of their biggest challenges. Put simply, attribution is exactly what it means: How much of a customer’s decision can you attribute to a certain channel. But while there are many different methods of attribution — last-click, last-view — there is a growing part of the brand world that prefers “fractional attribution.” Here what they’re talking about.
Someone in a meeting said “fractional attribution,” and I furiously nodded my head in agreement. What did I just endorse?
Basically, it’s saying that driving someone to take an action is, well, complicated. Fractional attribution recognizes that your decision to buy a pair of boots from, say, NineWest.com may have been influenced by a variety of factors, not just the ad that popped up on Facebook that you ended up clicking (last-click attribution) or the last ad you saw that impacted your decision (last-view attribution).
Superb. So now marketers will really know what works.
Well, theoretically. The big idea behind fractional attribution, according to Peter Vandre, svp of the digital analytics practice at Merkle, is that it eliminates some of the biases that other attribution methods will have. Obviously, clicks on search ads or retargeted banners want as much credit as possible. But that doesn’t take into account ads that drove awareness and consideration.
Why are we even talking about this now?
Media is incredibly fragmented and, therefore, incredibly complicated. Marketers are reaching people in so many ways, online and offline, desktop and mobile. The model itself isn’t new, but with all the channels that are now available to brands, it’s becoming more and more important. “It’s all fragmented, because there is no place you learn anything about a brand anymore,” said Christine Bensen, head of media at iCrossing.
This sounds wonky.
It is, but it has far-reaching implications. Ultimately, attribution is the referee that decides which channels and media sellers win and which don’t. And the rise of programmatic advertising has made attribution more important than ever. It all comes down to budget allocations. If search gets the credit for the buy, then search also gets the budget. “Everyone wants proof, proof, proof,” said Bensen.
Sounds like it’ll cause some issues internally.
Bingo. The team that was previously the star because it was responsible for the channel that the “last click” model was favoring might suddenly find itself falling out of favor because fractional attribution is finding that other channels are really important too. And, oh by the way, their bonuses are tied to the sales they’re credited with driving. You can imagine how that will go over when attribution is spread across other areas. “This has huge effects on how departments are structured. And compensation,” said Vandre.
So everyone’s using this?
There is some debate about which type of marketer should use the model. On the retail side, the argument that you need to know what drove your sale makes a lot of sense because you’re driving a sale. So, the boots you bought — maybe $2 of the sale was because of a click, $0.30 because of an impression and $4 because of a sponsorship. So the sale was $6.30. But how do you use this for CPG? “That’s where things get weird,” said Bensen, who added that the model is very, very difficult to implement for industries where there isn’t a direct sale.
This is all very confusing. Do the people using it get it, at least?
Not really. Marketers are taking shortcuts in the name of fractional attribution. For example, Vandre said that in some cases, brands use “business logic and intuition” to assign weight to certain channels. So OK, search is getting too much credit, let’s put some credit to another channel. Or even: let’s just assign equal credit to everything. “That’s really stupid,” said Vandre. “Because it’s fractional, but isn’t actually using analytics to assign the fractionality.”
So this isn’t the final answer to Wanamaker’s dictum on half of his advertising being wasted?
Not quite. The reality is fractional attribution is not perfect. In many cases, there isn’t enough data available to actually guarantee accuracy. The other thing is that it’s hard to get buy-in for something that feels like a black box. “Before, you could write down in a few bullet points how you can get credit for what you do,” said Vandre. “Now you need a master’s degree in statistics and analytics.”
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