Algorithmic Attribution - Steve Latham | Encore Media Metrics

Chicago • November 4–7, 2013 • #SESCHI @SESConf

Mul$-‐touch A,ribu$on A Deeper Dive for Digital Marketers Steve Latham Encore Media Metrics Found and ceo

Copyrighted material may not be shared. © Encore Media Metrics 2013

Chicago | November 4–7, 2013 | #SESCHI | @SESConf

@stevelatham Copyrighted material may not be shared. © Encore Media Metrics 2013

Agenda q  Introducing Algorithmic Attribution q  Review reports q  Where we are today q  Implications for marketers

(btw these slides are posted http://Attribution101.com )



Defining “Attribution” Two approaches to Attribution modeling:

q  Fixed: first, last, U-shaped, time decay, user-based §  Pros: relatively easy, very low cost §  Cons: subject to bias, treats all impressions and clicks the same

q  Algorithmic: using data science* to allocate fractional credit §  Pros: more accurate insights è better results over time §  Cons: cost and complexity *algorithmic: using machine learning and statistical (probability-based) algorithms to allocate fractional credit across assist impressions and clicks



Conversion)Path)Analysis Engagement)Overview Sources)of)Visits)within)Conversion)Paths)========>IMPs Visits Display Direct0Nav Nat.0Search Paid0Search Referring

All Converters (100%) 5.2 3.0 0.5 0.4 0.8 0.5 0.7 Relative Contribution 54.2% 45.8% 18.0% 14.0% 26.7% 18.0% 23.0%

Cluster 4 (45%) 1.5 2.8 0.8 0.0 0.1 0.0 1.8 Cluster 6 (21%) 4.7 3.8 0.2 0.6 0.8 1.5 0.6 Cluster 3 (15%) 6.1 4.0 1.5 0.2 1.8 0.3 0.2 Cluster 8 (13%) 3.9 4.8 0.0 1.2 2.0 0.1 1.3

Conversion Path Analysis

Conversion Path analysis shows: q  Converters were exposed to 5.2 display ads q  Converters visited 3.0 times before taking action q  Paid and natural search comprise 45% of clicks in path



Channel Attribution

The impact can be dramatic (last-click vs. attributable) •  Display: 30-60% drop in CPA is typical •  PPC: 10-25% drop in CPA is typical



Keyword Clicks ConvertingClicks

AssistClicks

acme5university 14,435 295 696acme 2,146 62 147acme5universities5new5york 906 24 31online5courses 831 2 7acme5learning 802 11 13online5university 320 4 2online5university5courses 278 4 3acme5learning5new5york 265 5 6adelaide5university 208 1 0study5online 196 1 4online5study 180 4 3distance5education 170 0 2online5learning 163 1 1short5courses5online 158 0 1online5university5new5york 146 3 2university5courses 105 0 3university 99 1 5distance5education5victoria 95 0 1charles5sturt5university 84 1 2acme.edu.au 79 2 3courses 77 0 4online5uni 75 0 2correspondence5courses 72 1 4www.acme.edu.au 72 6 5online5learning5new5york 71 1 0uni5online 71 0 1university5online 70 1 4acme5uni5new5york 64 2 1online5courses5melbourne 64 0 1

ActionsInfluenced Spend Cost5Per

Click(CPC)CPA5(LastClick)

CPA(Attrib.)

CPA5(%Change) Rating Role

534 $5,517 $0.38 $18.70 $10.34 .45% Winner Contributor112 $693 $0.32 $11.17 $6.16 .45% Winner Contributor33 $364 $0.40 $15.18 $10.98 .28% Winner Contributor5 $3,805 $4.58 $1902.41 $839.67 .56% Laggard Contributor

15 $373 $0.46 $33.89 $25.32 .25% Winner Contributor4 $479 $1.50 $119.86 $112.50 .6% Challenger Closer5 $881 $3.17 $220.22 $188.95 .14% Challenger Closer7 $104 $0.39 $20.74 $15.41 .26% Winner Contributor1 $162 $0.78 $161.96 $187.15 16% Challenger Closer2 $877 $4.47 $876.69 $355.56 .59% Laggard Contributor5 $739 $4.11 $184.84 $158.60 .14% Challenger Closer1 $611 $3.60 $0.00 $764.08 NA Laggard Closer1 $446 $2.74 $445.97 $352.41 .21% Laggard Closer0 $536 $3.39 $0.00 $1340.44 NA Laggard Closer3 $212 $1.45 $70.72 $62.47 .12% Winner Closer1 $183 $1.75 $0.00 $152.68 NA Challenger Closer3 $249 $2.51 $248.65 $86.77 .65% Winner Contributor0 $149 $1.57 $0.00 $372.03 NA Laggard Closer2 $153 $1.82 $153.28 $92.03 .40% Challenger Contributor3 $17 $0.21 $8.49 $5.79 .32% Winner Contributor2 $166 $2.16 $0.00 $103.82 NA Challenger Closer1 $96 $1.28 $0.00 $120.17 NA Challenger Closer2 $276 $3.84 $276.20 $112.02 .59% Challenger Contributor7 $22 $0.30 $3.61 $3.01 .17% Winner Closer1 $122 $1.71 $121.70 $140.63 16% Challenger Closer0 $84 $1.18 $0.00 $209.69 NA Challenger Closer2 $75 $1.07 $75.24 $30.51 .59% Winner Contributor2 $29 $0.45 $14.33 $13.45 .6% Winner Closer0 $424 $6.62 $0.00 $1059.79 NA Laggard Closer

Keyword Attribution •  Last-click rewards Low-funnel terms (brand) •  Last-click penalizes Upper-funnel terms (endemic, category, etc.)



Keyword Clicks ConvertingClicks

AssistClicks

acme5university 14,435 295 696acme 2,146 62 147acme5universities5new5york 906 24 31online5courses 831 2 7acme5learning 802 11 13online5university 320 4 2online5university5courses 278 4 3acme5learning5new5york 265 5 6adelaide5university 208 1 0study5online 196 1 4online5study 180 4 3distance5education 170 0 2online5learning 163 1 1short5courses5online 158 0 1online5university5new5york 146 3 2university5courses 105 0 3university 99 1 5distance5education5victoria 95 0 1charles5sturt5university 84 1 2acme.edu.au 79 2 3courses 77 0 4online5uni 75 0 2correspondence5courses 72 1 4www.acme.edu.au 72 6 5online5learning5new5york 71 1 0uni5online 71 0 1university5online 70 1 4acme5uni5new5york 64 2 1online5courses5melbourne 64 0 1

ActionsInfluenced Spend Cost5Per

Click(CPC)CPA5(LastClick)

CPA(Attrib.)

CPA5(%Change) Rating Role

534 $5,517 $0.38 $18.70 $10.34 .45% Winner Contributor112 $693 $0.32 $11.17 $6.16 .45% Winner Contributor33 $364 $0.40 $15.18 $10.98 .28% Winner Contributor5 $3,805 $4.58 $1902.41 $839.67 .56% Laggard Contributor

15 $373 $0.46 $33.89 $25.32 .25% Winner Contributor4 $479 $1.50 $119.86 $112.50 .6% Challenger Closer5 $881 $3.17 $220.22 $188.95 .14% Challenger Closer7 $104 $0.39 $20.74 $15.41 .26% Winner Contributor1 $162 $0.78 $161.96 $187.15 16% Challenger Closer2 $877 $4.47 $876.69 $355.56 .59% Laggard Contributor5 $739 $4.11 $184.84 $158.60 .14% Challenger Closer1 $611 $3.60 $0.00 $764.08 NA Laggard Closer1 $446 $2.74 $445.97 $352.41 .21% Laggard Closer0 $536 $3.39 $0.00 $1340.44 NA Laggard Closer3 $212 $1.45 $70.72 $62.47 .12% Winner Closer1 $183 $1.75 $0.00 $152.68 NA Challenger Closer3 $249 $2.51 $248.65 $86.77 .65% Winner Contributor0 $149 $1.57 $0.00 $372.03 NA Laggard Closer2 $153 $1.82 $153.28 $92.03 .40% Challenger Contributor3 $17 $0.21 $8.49 $5.79 .32% Winner Contributor2 $166 $2.16 $0.00 $103.82 NA Challenger Closer1 $96 $1.28 $0.00 $120.17 NA Challenger Closer2 $276 $3.84 $276.20 $112.02 .59% Challenger Contributor7 $22 $0.30 $3.61 $3.01 .17% Winner Closer1 $122 $1.71 $121.70 $140.63 16% Challenger Closer0 $84 $1.18 $0.00 $209.69 NA Challenger Closer2 $75 $1.07 $75.24 $30.51 .59% Winner Contributor2 $29 $0.45 $14.33 $13.45 .6% Winner Closer0 $424 $6.62 $0.00 $1059.79 NA Laggard Closer

Keyword Attribution •  Measuring attributed Actions and CPA •  Understanding role (contributor vs. closer)



Optimize within each channel –  Display

•  Pause under-performing ads (Laggards) •  Re-allocate budget to Winners within each category •  Reduce duplicate reach •  Reduce wasted frequency

–  Search: •  Adjust bids and budget for top performers (attributed) •  Prioritize SEO based on highest ROI keywords

Optimize budget across channels –  Allocate based on attributed performance –  Inform more rational budget allocations 2,657&

4,640&

19,732&

7,551&

1,683&&

4,452&&

16,228&&

12,217&&

0

5,000

10,000

15,000

20,000

25,000

Direct Nav Search Referrals Display

Ac#ons'By'Channel'

Last Click Attributed &$58&&

&$36&&

$0

$10

$20

$30

$40

$50

$60

$70

Display

Cost'per'Ac#on'

Last Click Attributed

Takeaway:By Re-allocating budget to Winners and capping Frequency, ROS should improve by at least 41%

Predictive Analysis

Vendors Spend % ofBudget ROS Revenue Proforma

% BudgetProforma

ROSProformaRevenue Impact

Leaders $58,841 39% $9.03 $531,100 62% $9.03 $853,059 $321,960

Challengers $57,876 38% $3.26 $188,638 38% $3.91 $226,365 $37,728

Laggards $35,670 23% $1.34 $47,674 0% n/a $0 ($47,674)

Total $152,386 100% $5.04 $767,411 100% $7.08 $1,079,424 $312,013

Relative Improvement 41%Incremental Revenue $312,013

How Insights are Applied



Where We Are in the Adoption Curve

Using Geoffrey Moore’s model from Crossing the Chasm… –  2008-2011 Innovators –  2012-2013 Early Adopters –  2014-2015 Early Majority –  2015- ? Late Majority



Why This Matters to You q  Attribution is (finally) a priority §  Display media is growing share (largely from offline budget) §  Relationship between Display and Search is very clear §  Silos giving way to integrated planning and execution

q  How you respond will impact relationship with your clients §  Transparency and openness will prevail §  Be proactive, strategic and supportive



Takeaways 1. It’s Time to Revisit how we Measure Media

–  Take a holistic (and realistic) view –  Position yourself as a thought leader, not a laggard

2. Don’t Fear Attribution. Embrace it! –  Search (done correctly) should have the lowest CPA –  Search works best as part of an integrated approach

3. Some organizations may need to Walk before they Run –  Start with fixed weight attribution models –  Migrate to algorithmic when ready to take the next step



For More on Attribution

•  POV: ”Which Approach is Best?” (Adotas): http://bit.ly/L1eLty •  Crossing the Chasm: the year of Attribution (Econsultancy):

http://bit.ly/CrossingAttChasm •  Demystifying Attribution (Adotas): http://bit.ly/L1eLty •  PhD Targeting & First Grade Metrics (iMedia): http://bit.ly/tyjrWk •  Five Forces Driving Attribution (MediaPost): http://bitly.com/iyOLpT •  Video: “Explaining Attribution” (via @creatorbase) http://bit.ly/nyakk6



Contact Info

Encore Media Metrics Steve Latham, Founder and CEO 1633 Broadway, 5th Floor New York, NY 10019 W: 646.820.1006 http://EncoreMetrics.com

[email protected] @SteveLatham @EncoreMetrics http://Attribution101.com



About the Presenter Steve Latham is the founder and CEO of Encore Media Metricshttp://encoremetrics.com which helps marketers optimize spend through better analytics. Serving leading brands and agencies around the globe, Encore’s on-demand solution enables clients to achieve deeper insights into campaign performance while lowering the cost and complexity of online measurement. Steve is an accomplished speaker and thought leader, speaking frequently at industry events including Ad-Tech, OMMA Global, Search Engine Strategies, IAB Mixx, eMetrics Summit and others. Steve’s articles have been published by Adotas, MediaPost, Online Media Daily, iMedia Connection, Marketing News and Bizjournals.com. Steve has been quoted in B2B Magazine, PR Week, Fortune and CNN.com. Steve received an MBA from Harvard Business School and a BBA from the University of Oklahoma. You can read Steve’s blog at http://Attribution101.com

http://twitter.com/stevelatham www.linkedin.com/in/stevelatham

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