Attribution Management 101

September 7, 2012Go Sugihara, CEO, ATARA, LLC

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Introduction

Go Sugihara• Born March 1969 in Hiroshima• Grew up in Oregon (yay!)• KDDI, Intel(Intel Inside Marketing Program),

Yahoo!(Overture), Google, ATARA• Specialize in marketing automation systems development and

attribution management, paid search consulting• Published two books:

– Paid Search: Professional’s Logic– Attribution: A Complete New Way to Consider Ad Effectiveness

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Agenda

• Attribution Management 101• Case Study• Current Business/Challenges

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ATTRIBUTION 101

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Conventional Online Ad Campaign and Analytics

Campaign Goal= CV(Conversion)= Online Purchase

Paid Search

Organic Search

Banner Ads

Affiliate Ads

10 CVs with $1000 = $100 CPA

20 CVs with $0 = $0 CPA

5 CVs with $2000 = $400 CPA

8 CVs with $1200 = $150 CPA

Your target CPA(Cost Per Acquisition) = $120

Great. More budget!

Really great. Keep using.

Not good. Reduce budget or cease campaign.

Not good. Reduce budget or cease campaign.

Media and Tactics

Online Ad Campaign

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What Does Actual User Purchase Behavior Look Like?

Goal= CV(Conversion )= Online Purchase

Paid Search

Only last tactic that was clicked gets attributed credit

Assists do not get attributed credit

Organic Search

Banner Ads

Banner Ads

Paid SearchOrganic Search

Shouldn’t these “assists” get credited?

Affiliate Ads

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There are Similar Things in the World of Sports

Player C

<Goal>

In Soccer, Assist is actually an unofficial stats not counted by FIFA, but is counted mainly by numerous soccer-related media.

Player APlayer B

Soccer

Player APlayer B

Hockey

Goal! Goal!

<Double Assist><Goal> <Assist>

In Hockey, the Art Ross Trophy is awardedto NHL player who leads the league inscoring points at the end of the regular season.Scoring Points = # of Goals + # of Assists

Record Record

Assists are considered to be valuable

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So What is Attribution Management?

A simple definition of “Attribution” (in the marketing world)

= Giving credit where credit is due

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Background: Why Attribution Management Started• Media fragmentation is making it difficult for marketers to see what is happening

– Need to visualize in integrated, holistic fashion

• Economic situation– Management needs to see hard evidence to approve budget

• Return is maxed out with paid search

• Re-boost of display advertising through DSP/Ad Exchange eco-system– But still need proof that display advertising really works

• Social media is gaining momentum, but is it really working?

• TV and print? PC and Mobile? Marketing is getting more and more difficult to make the right decision

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3 Commonly Used Phrases

• Attribution AnalysisAn analysis on how much contribution to conversion each of the marketing tactics had using recorded data (conversion path data)

• Attribution ModelingSelecting or designing the analytical model most likely to output the correct contribution results. Depends greatly on business model, industry, product/service lifecycle, etc.

• Attribution ManagementBased on attribution analysis, a practice to optimize and gain maximum return by re-allocating budget or changing media portfolio

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Essential Significance of Attribution Management

• In order to stimulate consumer attitude change, which is the purpose of advertising, attribution management is a practice used by companies to restructure marketing activities by obtaining holistic view of the entire consumer purchase behavioral trend which is becoming ever-so-complicated and fragmented

In this difficult time for marketers, it is very important to be able to visualize what is going on holistically,so that you have a better chance of making the right marketing decisions

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How is it Actually Done?

Select/implement tools

Accumulate conversion path

data

Run analysisRun simulation on

re-allocated budget

Evaluate simulation results

Execute campaign w/new media

plan

Attribution Management Processes

Select/Design Models

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Tools and Conversion Path Data

• Conversion path data:– is a string of data that can recorded using browser cookies– browser cookies enables clicks(views) that had direct/indirect relation

to conversion to be connected, creating a path-to-conversion data– can be recorded up to 10-100+ historical tactics that lead to conversion

Tools/Solutions Providers CV Path Data

View-Thru Modeling/Analysis

Web analytics Adobe, Google OK OK OK

Ad Effectiveness Measurement LockOn, Bebit, Cyber Agent OK OK No

3PAS DFA, MediaMind, Fringe81, DAC OK Yes OK

Attribution Analytics Market Share, VisualIQ, C3 Metrics, Adometry

Yes Yes Yes

Campaign Management Tools Ignition One, Marin Software, Kenshoo, Adobe

Yes Yes OK

CV2012/9/5 13:00

ID: 123

Paid SearchKeyword: aaa

2012/9/5 12:00ID: 123

Ad Network ACreative: zzz

2012/9/4 9:00ID: 123

Organic SearchKeyword: ccc

2012/9/3 23:00ID: 123

Ad Network BCreative: yyy

2012/9/1 14:00ID: 123

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Models

• Equal weight distribution modelEqually divide conversion credit to each tactics

• Hypothesis weight distribution modelDivide conversion credit based on hypothesis or strategy. For instance, if introduction or growth stage in product life cycle, weigh more on first clicks, if in maturity stage, weigh more on last clicks

• Statistical weight distribution modelStatistically calculate contribution and correlation of each tactics in temporal sequence. Econometrics approach

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Equal Weight Distribution Model

100%

50%

30%

First Middle Last

１／３

１／３

１／３

Equal Weight Distribution Model

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Hypothesis Weight Distribution Model – First Heavy

100%

50%

First Middle

Last

１／２

１／４

１／４

First Heavy Attribution Model

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Hypothesis Weight Distribution Model – Last Heavy

100%

50%

First Middle Last

１／２

１／４

１／４

Last Heavy Attribution Model

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Last Click Attribution Model

100%

50%

First Middle Last

１００％

０ ０

Last Click Attribution Model

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Statistical Weight Distribution Model

Ad Spend

CV

(a)

(b)

(c)

Tactics (a) increase in ad spend relates to increase in # of conversions

Tactics (b) increase in ad spend inversely relates to # of conversions

Tactics (c) increase in ad spend will relate to # of conversions but when surpassed certain point it will decrease

Methodology is to consider the above characteristics of each tactics and come up with the optimal combination of maximum conversion to total ad spend

　 # of CV = invariable + a×AD1 + b×AD2 + c×AD3 + d×AD4

Factor of each of the variables in regression equation = advertising elasticity = Attribution score

“Where’s the optimal point in the line for the combination to get the most bang for your buck”

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Attribution Analysis Steps

Use a model and score each tactic

= Attribution Scoring

Apply cost to the score and calculate

Attribution CPA

Sort Attribution CPA by better

efficiency = Attribution Rank

Score it Calculate “new” CPA taking into account “assists”

Rank it

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Very Simple Example of Attribution Analysis

CV

Paid SearchPremium Banner Ad

Ad Network Banner Ad

First Middle Last

Attribution Score 1/3 1/3 1/3

Cost $100 $200 $300

Attribution Rank #3#2# １

Attribution CPA $900$600$300

Attribution 0 0 1

(Equal Distribution)

CPA $300n/an/a

Considered to nothave any effectiveness

You could say that the 2 banner ads tactics have better ad effectiveness than paid search

Past

Now

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Example of Budget Re-Allocation (paid search example)• Output attribution CPA by each individual keywords (even if there are 1 million keywords!)• Given that the keywords have little margin for optimization (for instance, ranked #1 and

have tried changing creative), using your target CPA, decide on what to continue using and what not

• For those that does not meet the target CPA, shift them to other efficient media

No Clicks

Attribution CPA is less than target CPA

Attribution CPA is more than target CPA

Attribution Score is 0(no direct/indirect attribution)

Attribution CPA is less than target CPA

Attribution CPA is more than target CPA

No Last Click Effectiveness

Clicks

Impression

No Impression

Last Click Effectiveness

Paid Search

Continue

Continue

Re-allocate to Banner

Re-allocate to Banner

Re-allocate to Banner

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CASE STUDY

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Case Study: xxxx

• One of very top online xxxxx site• Monthly online marketing budget is approx. 65 million Yen

– Paid Search 60 mil Yen– Banner Ads 5 million Yen (includes premium ads, ad networks, retargeting,

content targeting)• Target CPA

– Paid Search 6700 Yen– Banner Ads 12000 Yen

• Issues– Paid search is effective and efficient with good CPA but has no room for

optimization– However, clients needs to increase conversions– Banner ads does not seem to be efficient but can it be better used?

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Attribution Analysis Result

• Banner Ads CPA turns out to be 12000 Yen >>> 6000 Yen– It means that it might be working and there’s opportunities

Tactics Cost # of CV Attribution Score Last Click CPA Attribution CPA

Paid Search 60 mil Yen 9000 16000 6666 Yen 3750 Yen

Banner Ads 5 mil Yen 420 830 11904 Yen 6024 Yen

Premium 1.5 mil Yen 50 250 30000 Yen 6000 Yen

Ad Network（ Google-CT ） 1.5 mil Yen 170 155 8823 Yen 9677 Yen

Ad Network（ Google-RM ） 1.5 mil Yen 180 400 8333 Yen 3750 Yen

Ad Network（ Yahoo-IM ） 0.5 mil Yen 20 25 25000 Yen 20000 Yen

Total 65 mil Yen 9420 16830 6900 3862 Yen

Target CPA 6700 Yen

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Re-allocation of Budget

Attribution CPA

KW1 KW2 KW3 KW4 KW5 KW6 KW7 KW8 KW9 KW10

High efficiency

Low efficiency

6700 Yen

Not efficientRe-allocate budget to

Banner Ads

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Re-allocation of Budget

• No change to total budget• Shifted 30 mil Yen from paid search to banner ads

65 mil YenBanner Ads ：

0.5 mil Yen

Paid Search:60 mil Yen

Banner Ads:35 mil Yen

Paid Search:30 mil Yen

30 mil Yen increase

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Conversion Simulation

• Simulation Result– +5500-1500 CVs = 4000 CVs increase possible

# of CVs

-1500 from decreasing paid search budget

+5500 If 30 mil Yen is shifted to Banner Ads, 5500 CVs will likely be generated

9450

Current Simulated

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Actual

• Client decided to shift budget but less than 30 mil Yen (risk)• In a month, # of CVs increase accelerated to be close to simulation

– Reason for slow start (hypothesis): effect of banner ads takes some time• Client was very happy and now we are supporting them in next phase

# of CVs

実施後 1 ヶ月

Simulation line

Past actual

Actual line afterattribution management

1 month after attribution management

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CURRENT BUSINESS/CHALLENGES

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Current State and Future

実施後 1 ヶ月

Early Adopters

Time

Innovators1st GenerationOnline

Click-based

2nd GenerationOnline

Click+ViewThru

3rd GenerationOnline+OfflineEconometric

Cookie-less trackingMobile integrationPredictive analytics

Marketing Automation

Late MajorityEarly Majority

Level

Hig

hLo

w

No doubt it’s going to be more data-driven and sophisticated

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Challenges

• Internal Silo-ed programs and execution team– Many advertisers have silo-ed team function and they want to protect their own budget– C-level commitment and leadership and holistic decision making is necessary

• Agency governance– When there’s multiple agencies, project management can be difficult

• People– Data scientist shortage

• McKinsey ”The US faces a shortage of 140K - 190K people with analytical and managerial expertise and 1.5 million managers/analysts with the skills to make decisions based on the study of big data”

– Not just number cruncher, someone who really understands marketing and tactics in operational/planning level

Pretty much the same challenges as IMC

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