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Evidence-Based Marketing

Connecting Marketing to Business Outcomes

Posted by Matt Redlon on Jul 1, 2019

The Mobile Marketing Association (MMA) sponsors the Marketing Attribution Think Tank. In addition to having a great acronym, "MATT" is backed by major marketers including Johnson & Johnson, Unilever, Nestle, Procter & Gamble Co., T-Mobile, J.P. Morgan Chase, American Express, Mastercard, Bank of America, Samsung, Hilton, 1-800-Flowers, and more. The modest goal of the group is to "rethink the world of marketing measurement and attribution, and give marketers better measurements, tools, and confidence in connecting marketing to business outcomes."

The last portion of this mission statement is what really caught my eye: "connecting marketing to business outcomes". The fact traditional brand advertisers are embracing this connection speaks to a growing desire to hold agencies, vendors, and internal marketing resources accountable for what really matters to the organization: top and bottom line growth.

The State of Multi-Touch Attribution (MTA)

MATT initially focused on multi-touch attribution, as "many marketers believe it to be the Holy Grail to fixing marketing measurement." If you are unfamiliar with MTA, Clario produced a quick video entitled What is Revenue Attribution which should help with the general concept. A few key observations from an initial research study conducted by MATT:

  • 75% of respondent marketers said they are or will be using MTA within 18 months
  • respondents currently using MTA solutions were;
    • struggling with transparency and validation of MTA methodology
    • "somewhat satisfied" with their provider, but very few were strong advocates
    • selective about where they use MTA and not convinced net impact is positive
    • very interested in understanding how to leverage MTA to improve productivity
  • respondents not currently using MTA amplify all the concerns above

These observations are consistent with my own in talking to hundreds of marketers. Over the years, I've boiled the resolution to these struggles down to two key factors.

MTA vendors must educate their customers, implement with transparency, and continuously improve to build trust.

There's no question an attribution solution incorporating a bottom-up (MTA) approach provides a superior framework for measuring the relative performance of marketing programs and optimizing future spend. The challenge: MTA vendors are failing to honestly educate their clients on the tradeoffs, complexities, and limitations of the various approaches to attribution, preferring instead to oversell "plug-n-play" tools. For their part, marketers want to believe the vendor stories – they want the easy button. This lack of intellectual honesty among both parties results in expectation shortfalls and a breakdown in trust. At the heart of this breakdown is a key limitation of pure MTA solutions: gaps in customer-level data are widespread.

Like most MTA solutions, Clario gives preference to customer-identifiable interactions. However, data gaps frequently occur due to variability in each client's:

  • marketing (e.g. offline, traditional media) and order channels (e.g. retail)
  • internal systems and procedures (e.g. data capture and storage decisions)
  • adtech/martech stacks and premium services selections (e.g. storage window for non-purchase web sessions)

These gaps are magnified in solutions based solely on preconfigured, systematic integrations. Add to these issues the growing challenge of cross channel/device person-level identity and stakeholders quickly lose confidence in the accuracy of their MTA solution, resulting in limited stakeholder adoption.

To address these issues, Clario:

  • uses a team of data integrators and scientists to bring together data from all of the marketer's unique sources in whatever format available
  • fills bottom-up data gaps using top-down models, incorporating learnings from existing vendors (e.g. marketing/media mix modelers) when appropriate
  • partners with our clients and their vendors in a long-term commitment to minimize these gaps
  • systematically tests the accuracy of the underlying machine learning attribution models in partnership with our client

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When trust exists, holistic integration leads to holistic action.

When the marketer and vendor partner honestly and transparently to learn, test/validate, and continuously improve, trust is established and acceptance and adoption greatly increases. This addresses the MATT survey's first three major issues (transparency, validation and selective use), but what about the final two (leveraging MTA to increase productivity and ensuring a net positive impact)?

The single greatest obstacle to acting on attribution is the failure of MTA solutions to holistically integrate the marketing programs which drove the purchases, to the characteristics of the purchases themselves (product, financials, etc.), and to the customer's characteristics the moment before they made the purchase. CDPs and DMPs promise actionability via holistic integration, but frequently fail to build it upon a trusted, continuously improving foundation of MTA. If the marketer's primary tools for action are marketing programs, shouldn't the foundation of future action be the robustly measured past, and predicted future success, of those programs?

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At the intersection of this customer, purchase, and attributed marketing data lies customer lifetime value (CLV), a measure of the profitability of a customer (or group of customers) over various future time periods. If you are unfamiliar with CLV, we wrote an insight post entitled Calculating, Predicting, and Acting on Customer Value which may help. CLV empowers the marketer to evaluate the worthiness and appropriate magnitude of investment in a customer group. The real magic is when these elements are stitched together (as they are in Clario) to richly explain a desired strategic behavior, such as acquisition, retention, or reactivation, and to provide explicit tactical direction on how to increase the frequency of occurrence of these behaviors (e.g. which customers to target, with what product and promotions, via which marketing channels, campaigns, and even creative).

Empowered with this strategic and tactical roadmap for action, MTA's promise of increased productivity and net positive impact can finally be realized, truly connecting marketing to business outcomes.

Matt Redlon

Written by Matt Redlon

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