In the grand sport of baseball, a game-winning home run garners roaring applause. However, crediting the victory solely to that last player would be shortsighted, ignoring the combined efforts of the pitcher, the infielders, and everyone who got on base. The same principle applies in the realm of marketing where traditional attribution models have been the go-to method for gauging return on investment (ROI). These models, however, are like praising the last hitter for the entire game. The future lies in a more sophisticated model: Marketing Impact Modeling.
Out with the Old: Traditional Attribution Models
Attribution models such as last-click, multi-touch, and media mix modeling have served as the standard measures for marketing ROI. Yet, each has inherent shortcomings.
- Last-click attribution gives all credit to the final touchpoint before a sale. Using our baseball analogy, it’s like giving the entire credit for a win to the player who scored the final run, disregarding the efforts of the rest of the team.
- Multi-touch attribution attempts to spread the credit across multiple touchpoints. It’s a bit like acknowledging the batter, the runner, and the coach in our game. However, it still struggles with the proper weighting of each touchpoint and is primarily restricted to digital channels.
- Media mix modeling uses aggregate data to understand the impact of various marketing efforts, akin to looking at a team’s performance over a season. Yet, it fails to incorporate real-time data and struggles to account for individual customer paths.
Each of these models has played its part in advancing our understanding of marketing ROI, but they falter in today’s complex, multi-channel marketing landscape.
In with the New: Marketing Impact Modeling
Just as baseball analytics has evolved to appreciate complex strategies, marketing measurement now champions the more sophisticated Bayesian models. Named after Thomas Bayes, these models use probability to predict outcomes, updating those predictions as more data becomes available.
For instance, in baseball, a player’s batting average is not fixed but updates over time, reflecting their performance across many games. Similarly, Bayesian models adjust over time, allowing marketers to refine their predictions and strategies based on cumulative data.
With ChannelMix, marketers can measure the impact of both online and offline channels. An outdoor billboard or a radio advertisement’s effects—traditionally challenging to quantify—can now be measured by observing changes in customer behavior after exposure. For instance, a sudden increase in website traffic or in-store visits after launching a billboard campaign indicates its impact.
These models also account for external factors, such as market trends or seasonal influences—much like how a baseball player’s performance can vary with different pitchers or stadiums.
From Theory to Practice: Bayesian Models in Action
Companies are already reaping the benefits of this shift towards marketing impact modeling.
A ChannelMix financial services client experienced success in their first month of using the tool. By implementing the recommendations found in the platform, they increased leads by 27% by following the guidance to move majority of the paid social spend into paid search (all while keeping a flat budget)
Grand Slam: The Future of Marketing ROI
The shift from traditional attribution to marketing impact models is akin to the evolution of baseball from a game of gut instincts to one guided by data analytics. It provides a more comprehensive, flexible, and accurate approach to measure marketing ROI.
Just like the team that uses every player’s strengths to win the game, marketers can now leverage the full suite of their channels, both online and offline, to understand and enhance their marketing impact. By continuously updating predictions as new data comes in, they can better adjust their strategies in real time, mirroring the dynamic nature of consumer behavior.
In this era of interconnectedness, it’s time to retire outdated attribution models that only give us a piece of the puzzle. Embracing marketing impact allows us to see the bigger picture and understand the intertwined effects of all marketing efforts.
Just as every baseball team aims for the grand slam, so too should marketers strive for the highest ROI. With ChannelMix leading the way, marketers are well-equipped to hit it out of the park, driving meaningful engagements and boosting business growth in the ever-evolving marketing landscape.