Navigating The Marketing Measurement Maze: What’s The Right Solution For You
Here’s a scenario that is familiar to a lot of marketing professionals that we’ve spoken to in 2024:
- Lower confidence in marketing measurement and digital attribution because of the degradation of tracking abilities.
- Increasing pressure to prove the impact of marketing budgets.
- You have seen a ton of ads, posts, and emails from attribution and measurement businesses which are increasingly difficult to distinguish between.
Despite how it might feel, regardless of the size of your marketing budgets, it is possible to navigate the marketing measurement space, and get a better understanding of what is driving your performance. The key is understanding the available measurement methods and which is most appropriate for your business.
1. Attribution Models
Attribution models (for example, last click, first click, or multitouch attribution) give credit for conversions across multiple touchpoints in the customer journey. That can apply within ad platforms (e.g., Google Ads, Meta Ads, etc.) or within analytics tools like Google Analytics or paid-for tools like Triple Whale, Polar Analytics, or Roivenue.
For this to work, the platforms or analytics tools need to understand which touchpoints a customer has been exposed to, which is why it is particularly suited to digital tracking, especially for lead generation and transactable websites. Typically that’s achieved through tags, pixels, or API connectors.
Attribution models are also best for measuring performance marketing campaigns, where the conversion and revenue volume is the principle KPI, as opposed to those focused on market penetration or brand awareness.
Pros to Attribution Models
There are pros to attribution models, in particular that the set up requires little technical knowledge. There are free platforms (like Google Analytics), or paid for platforms which don’t cater just for enterprise size businesses.
Limitations to Attribution Models
But, there are significant limitations – for example, most analytics platforms don’t have access to view or impression data for ads, meaning social or upper funnel channels are significantly under-attributed. The implications of that are that budgets are being suboptimally set across channels, costing businesses revenue and profit.
Digital attribution platforms also only account for the impact of media, rather than any other marketing factors like pricing and promotion or competitor activity. They are unable to factor in external influencers such as the weather or consumer confidence.
Finally, many of the analytics tools which use attribution models are heavily reliant on tracking users via pixels which are susceptible to degradation as digital tracking continues to evolve.
So, if the following are true, it’s fine to rely on attribution as a start:
- You are using largely lower funnel performance marketing digital channels.
- You want to understand which digital touch points within a 7-90 day window drive sales and/or leads online.
- You are not trying to make broader marketing strategy decisions – for example, concerning pricing and promotions, or budget allocation on ATL channels.
- You understand the limitations of relying on attribution and are comfortable making decisions based on those limitations
But, if any of those are false, then you’ll want to consider attribution modelling in conjunction with econometrics.
2. Econometrics
Econometrics is a branch of economics that applies statistical methods to analyse economic data – those techniques can also historically been used for marketing measurement, known as marketing or media mix modelling.
Unfortunately, and unhelpfully, people can use the acronym MMM to mean either marketing mix modelling or media mix modelling, so it’s important to clarify exactly which technique is being discussed.
Econometrics is distinct from attribution modelling. Attribution models attempt to track the touchpoints on a customer journey, and aim to provide insights into the relative contributions of different marketing channels and touchpoints to conversion outcomes. Econometrics on the other hand takes a time series approach, applying statistical modelling techniques to historic periods of data to identify patterns between media and marketing activity and your KPI.
For both marketing and media mix modelling, the KPI can be anything that is meaningful to measure that can have a time-series of data attached to it – for example, sales volume or brand awareness.
Difference between Marketing Mix Modelling and Media Mix Modelling
The difference between marketing and media mix modelling comes down to which potential performance drivers they are taking into account. When organisations refer to media mix modelling, that will focus solely on the impact of media, and, if the data is available, can take into account both online and offline activity.
Marketing mix modelling will take these into account, plus any other potential performance drivers which have a time-series of data behind them, including pricing and promotions, competitor activity, weather, and retail distribution.
Sophistication of Marketing Mix Modelling and Media Mix Modelling
Marketing and media mix modelling require specialist analytical skills and tools to carry out effectively, and time needs to be spent in the collation of data and reviewing results. Historically this meant they are techniques solely available to enterprise size advertisers, and carried out annually rather than being “always on” like digital attribution models.
With access to increasingly sophisticated technological capabilities however, measurement specialists like Entropy MMM are pioneering new approaches to marketing mix modelling to democratise access to more impactful marketing insights. Get in touch here to find out more.
In summary, if you are running a straightforward set up of digital marketing channels, attribution modelling is likely to be a useful marketing measurement solution for you – but it is worth investigating paid for platforms which can have more robust solutions to missing media view data. That would provide a more holistic view of your digital media performance in social and upper funnel channels.
If you need a more sophisticated view of what’s driving your performance, due to running a number of upper funnel or offline marketing channels, or having complex dynamics driven by different sales channels, then marketing mix modelling will be the measurement solution for you. Get in touch with Entropy to learn about our marketing mix modelling services.
