Attribution
Earlier this week, Samuel Scott, long-time columnist at The Drum, wrote a piece in which Les Binet (a widely regarded expert in econometrics/media mix modeling) suggested that trying to measure anything via digital attribution was a fool’s errand.
Binet, of course, has a vested interest in pushing MMM. In the piece, though, he did have a quote that stood out to us:
“Attribution modeling overestimates the ROI from direct response communications and underestimates the ROI from brand communications,” Binet said. “If you just follow the attribution data, you end up just doing short-term stuff. You never build a brand, you don’t grow the customer base, you don’t grow the base level of demand. And it’s a recipe for disaster in business.”
This is, roughly, the point we were trying to make in our Omni newsletter from December:
Except we’re struggling with one thing: many brands starting this journey to ubiquity through distribution are not yet trying to reach ubiquity through awareness. The marketing dollars are going to demand capture. Facebook ads are used to capture DTC sales, sampling is used to capture retail sales, etc.
There seems to be less mass reach efforts, even as many in the space are talking about reaching the masses.
As Scott’s column (and countless Twitter threads) underscores, we’ve become hooked on the lure of “performance” marketing as the growth driver for brands, but have yet to stop and consider whether that belief is anything more than lore.
This is not to say that performance dollars aren’t worthwhile. Or that the channels they’re used on don’t work.
But there were two datapoints last year that make you wonder just how much growth is tied to “performance” spend versus the more simple, straightforward fact that we put ads in front of people.
Common Thread Collective’s Steve Rekuc found that customer acquisition costs are tightly correlated to consumer confidence and not iOS 14.5 changes.
Jeremiah Prummer, founder of KnoCommerce, shared a LinkedIn post four months ago that showed more than 40% of customers who answered post-purchase surveys said they first heard of the brand more than one month before purchase. Almost 10% of customers first heard of the brand at least 12 months ago.
So, if targeting didn’t really impact acquisition costs and almost half of all customers take more than a month to buy, maybe those performance dollars don’t always work in the way we think they do.
Attribution, it seems, will remain a flash-point topic for much of the CPG and DTC world. Such is life in a post-ATT world. But changing attribution tools—an ever popular topic among Twitter—or even attribution models may be the right solution to the wrong problem.
If that’s the case, what do we do about it?