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Last-Click Conversions Are Getting Dropped from the Team

22 Nov 2018

Ever since the dawn of digital marketing, we marketing professionals have been romanticised by the idea of tracking everything their customers do online. In reality, however, we have been living in a one-dimensional world of conversion data.

For many years the default model for conversion tracking has been last-click attribution. For those not familiar with the terminology, last-click attribution would be like Steve Hansen keeping track of who of his team have scored tries during the season. While tracking conversions was revolutionary for marketers, the last-click model also created several problems.

The big players in online marketing, like Google and Facebook, are on a mission to move marketers away from last-click conversions. Their goal is to move advertisers towards using multi-touch, data-driven attribution tracking.

What’s the problem with last-click attribution?

Imagine you are watching a match between the All Blacks and the Wallabies. After a gruelling 80 minutes, neither side has managed to score. Right before the final hooter Rieko Ioane dives over in the corner, scoring a try and winning the match for his team.

If we applied the last-click model for attribution to this scenario, Rieko Ioane would clearly win man of the match. The rest of the team, however, would be dropped from the squad for not contributing to the scoreline.

While that sounds laughable it is comparable with what has been happening in the world of online marketing. Marketers, and indeed Kiwi businesses, have been measuring their marketing performance based on the “try scorers” of their marketing campaigns.

Campaigns that aren’t seen to generate conversions get cut from the marketing mix. The marketing budgets then get moved to channels that are more likely to generate last-click conversions. This practice can often benefit the business but the wins are usually short-lived.

Focusing on a single point in the sales funnel causes long-term problems. Over a longer period, when no focus is given to the touch points early on in the customer journey, the sales pipeline starts to dry up. Your potential customers end up engaging more with your competitors throughout the early stages of their sales journey. Eventually, when it comes time to buy, you are trying to approach them with a product or services they are unfamiliar with and a brand they have never heard of.

The industry as a whole suffers too, as the cost of certain advertising platforms become inflated beyond their real market value. This drives up the cost per acquisition and makes it more difficult to generate ROI through channels the company has come to rely on for sales.

So what’s the solution?

Every marketer's goal should be to move to a data-driven attribution model. Unlike standard rule-based attribution models, such as first-click or last-click conversions, data-driven attribution used machine-learning to build a custom model for your specific customer journey. This will paint a clearer picture of what role each touchpoint plays in driving conversions for your specific business.

Google currently offers data-driven attribution in its Google Analytics 360 platform. This system uses actual data from your Analytics account to generate a custom model for assigning conversion credit to your specific marketing touchpoints. Unfortunately, for the majority of Kiwi businesses, this is an enterprise level software with a hefty price tag.

The good news is Google announced in 2017 that they would be launching a free version of Google Attribution. This stripped down version will bring data-driven attribution to the masses. While the expected release date of 2018 sounded great at the time, we are already in the fourth quarter with no sign of the free version.

Facebook has also been hard at work building a data-driven conversion option. While this seems like it is going to be available to all advertisers, Facebook has indicated that currently their measurement is only an estimate and is still in development.

So while the future of conversion tracking looks bright the present day situation still offers challenges.

What should you be doing right now?

If you are like most Kiwi businesses and can’t afford Google 360 then there are a few things you can still be doing right now to improve your tracking and decision making.

The first thing to do is get familiar with the Model Comparison Tool in your Google Analytics account. While this still relies on rule-based attribution models it allows you to compare results under different criteria and build a better picture of where your conversions come from.

Also under Google Analytics are your Multi-Channel Funnels reports. Using the Top Conversion Paths and Assisted Conversions reports you can get a clearer picture of how your marketing channels support each other to generate conversions. These above reports rely on your Analytics goals and tracking code being set up correctly so you may have some house cleaning to do before you can start using them. Our free Google Analytics audits can check this for you.

If you are using Google Ads (previously AdWords) then you may see a data-driven attribution model already available under the conversion action settings. This option is locked for ad accounts that don’t have enough conversion data. For this model to become available, Google’s rule of thumb is that the account must have at least 15,000 clicks on Google Search campaigns and the conversion action must have at least 600 conversions within 30 days.

For most Kiwi businesses these criteria are not achievable. So if you fall under this group your best option is to set your attribution model to either the Time Decay or Position-based models. These spread the credit for the conversion over multiple clicks and mitigate some of the risk of relying on last-click attribution.

Like a bad line-out call, the last-click conversion model needs to be replaced with a better option. One that leads to a competitive advantage. Data-driven attribution will be the new play for educated marketing managers.