While using a multi-channel marketing strategy may be a no-brainer, measuring its success can be a different story. Our friends at Target Marketing have devised a budget-friendly way to measure your multiple marketing channels so you can make informed decisions about the channels in your marketing mix.
Attribution analysis is the practice of tracking and measuring the marketing touchpoints that influence the customer’s buyer journey. Most marketers would agree that collecting the marketing data required for attribution from channels like social, direct mail, and search can be a daunting task. But getting it right can result in wiser ad spends, a better understanding of the customer experience, and dramatic increases in campaign performance. And it doesn’t have to require the fancy data platforms that so often require a fancy budget.
Match Your Markets
As you take inventory of your marketing channels, select a set of geographically similar markets matched in terms of size and demographics, but careful to avoid overlapping markets that will have competing data (i.e. New York City and Princeton, New Jersey). Your set should include a market for every channel you have, plus a control.
Test, Test, Test
Create a test matrix out of your data and arrange it so that one of your markets act as a control and the remaining markets eliminate one of your evaluated channels. In the example provided, all channels are slotted under the control cell, and one channel is eliminated per test market cell. Doing so will allow you to determine which channels are helping to lower the overall cost per response.
Your test should take as long as it gets you to achieve a reliable set of responses. As the author puts it, “with 250 to 300 responses in each column and each row, you can be 90 percent confident that your results won’t vary by more than 10 percent in a rollout scenario.”
Within your matrix, you can analyze your cost per response for each given market. The cells containing a lower cost per response than the control, per the example below, suggests that the channels eliminated from those marketers increased the average cost per response.
As you can see, eliminating direct mail, display, and mobile yielded lower costs per response than the control cell including all channels. If this were your data, you would conclude that these channels are actually raising your cost per lead, and you would seek to minimize the role these channels play in your integrated marketing mix.
This type of formula can also translate to revenue and profit; whether positive or negative, the numbers you get between the control profit and the profit aligned in each matched cell provides the incremental value of the channel that was omitted in that cell.
Be advised that the results aren’t 100% foolproof, thanks to external factors that may come into play and slightly mismatched markets. It’s also worth keeping in mind that while eliminating certain channels from your media mix might lower your cost per response, it can have an impact on your response volume, which also has implications for the profitability of your multi-channel marketing efforts.
Limitations aside, the insights produced by this matrix will speak volumes in terms of your multi-channel mix. Remember that making informed decisions on how to allocate your marketing dollars hinges on research, testing, and analysis.
Editor’s Note: This post was originally published in September 2016 and has been updated for greater clarity.