Using Science to Optimize Marketing Spend

ROI LAVAN, VP PRODUCT PRESENTING

TODAY: #ATDconf

•  What is Attribution

•  Why MTA?

•  Framework- Measure, Attribute, Optimize

•  Optimizing using MTA

•  Summary

Agenda

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•  Founded in 2009 In Los Angeles •  Israeli branch opened in 2011 •  Backed by Bessemer •  Notable customers- QVC, JC Penney, Gap •  Declared Leader by Forrester in the last MTA Wave •  Acquired by AOL in 2014 for $101M

But first, about us

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•  The process of assigning true value to each of the customer’s touchpoints on the path to conversion

What is attribution?

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Real customer example- which channel is “closing the deal”

Why should you care?

25%$

5%$18%$

45%$

0%$

14%$ 8%$

23%$ 25%$13%$

30%$

5%$

29%$

17%$ 51%$35%$

12%$

2%$

15%$38%$

30%$ 29%$

15%$

27%$

26%$

46%$29%$

40%$34%$ 31%$

96%$49%$

25%$

28%$ 28%$

53%$

23%$

51%$

17%$30%$

4%$13%$ 12%$

2%$

22%$29%$

18%$ 18%$ 20%$ 19%$ 19%$8%$

0%$

10%$

20%$

30%$

40%$

50%$

60%$

70%$

80%$

90%$

100%$

affiliate$

coupon$

cse$

direct$

display$

email$

emailresponsysus$

organic$brand$

organic$nonbrand$

other$

ppc$brand$

ppc$content$

ppc$nonbrand$

%$Only$ %$Introducer$ %$Influencer$ %$Closer$

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Real customer example- how is my mobile campaign performing?

Why should you care?

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MULTIPLE CHANNELS •  Last click doesn’t apply anymore •  Measuring View-Through accurately

MULTIPLE DEVICES •  Customer journey is more important than ever

TON OF DATA •  More accurate and granular data requires different tools

So, Why MTA?

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Who does “Attribution”?

YOU are doing

attribution

And YOU are doing attribution

AND YOU are doing attribution

Everyone’s doing attribution!! #ATDconf

FIRST TOUCH LAST TOUCH EVEN

RULE-BASED TIME DECAY ALGORITHMIC

Attribution models

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•  Track all offline and online media

•  Track online & offline sales •  Integrate spend data

PC, MOBILE, SOCIAL, TV, RADIO, CATALOG

MEASURE

USER LEVEL

$17

DISPLAY

$33

VIDEO SOCIAL EMAIL RETAIL

$8 $42

•  Algorithm assigns $ value to each touch-point

•  Top down & bottom up

•  Update frequently

•  Level of granularity

$100

ATTRIBUTE

•  Optimize media spend factoring diminishing

returns

•  Scenario planner for “what if” mix analysis

•  Integrate into buying tools

OPTIMAL SPEND

BUYING TOOLS

OPTIMIZE

Suggested Framework

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MEASURE

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USER-LEVEL MATCHING

Customer Data (PII)

Direct mail, catalog

AGGREGATE LEVEL DATA

TV, radio

Offline media exposure

Convertro ID

MAP OFF-LINE IMPRESSIONS TO A SINGLE USER TRACK IMMEDIATE EFFECT AND TOTAL EFFECT OF OFFLINE MEDIA

Convertro ID

Data onboarders like LiveRamp

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OFFLINE AND ONLINE SALES MAP TO CONVERTRO USER IDS

ALL SALES USER-LEVEL, MARKETING MEASUREMENT

E-COMMERCE

SALES IN-STORE

SALES

DIGITAL

DIRECT

OFFLINE

UNIQUE USER IDS

MARKETING TOUCHPOINTS

MEASURE ALL SALES

Data sources like NCS Data onboarders like

LiveRamp #ATDconf

ATTRIBUTE

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Purchase Probability

3%

12%

9%

Lift

9%

6%

CONSUMER CHOICE MODEL

$100 $25 $15

$35 $150

$200

$15 $10

PREDICT PURCHASE PROBABLILITY & LIFT

TV

Dis

play

Em

ail

Sea

rch

Soc

ial

Vide

o

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ALGORITHM MODEL ENHANCEMENTS

SEQUENCE

•  Attribute events preceding sale to assess their predictive value

•  Addresses “new” vs. “repeat” purchases

•  Handles multiple steps in conversion funnel

FREQUENCY

•  Analyzes frequency of touch-points vs. just indicators

DIMINISHING RETURNS

•  Allows touch-points to exhibit various forms of non-linear effects like diminishing returns

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BASE / LIFT

TIME DECAY

•  Measures true incremental lift of paid and unpaid marketing on sales relative to base probability

•  Brand Equity - How much revenue would I get if I shut off all marketing spend?

•  What is the combined impact of frequency & recency

•  Estimate period over which “impressions” and “clicks” by channel/tactic decay over time

ALGORITHM MODEL ENHANCEMENTS

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Implement the rule: •  If it seems performing on most rule-based models, it’s probably

a good channel

But what if I can’t afford it?

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TOTAL EFFECT IMMEDIATE EFFECT

COMBINE ALGORITHMS FOR ADVANCED TV ATTRIBUTION

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IMMEDIATE EFFECT

Spot airs Spot airs

•  Measure leads by minute around spot •  Detect peaks close to an airing and attribute leads •  Sensitive to spot frequency •  Assign leads at DMA level

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IMMEDIATE EFFECT- Cont •  Select leads from brand marketing channels •  Mobile is more predictable (less volume)

0"25"50"75"

100"125"150"175"200"225"250"275"300"

0" 10" 20" 30" 40" 50" 60" 70" 80" 90"

Desktop(Traffic(by(Channel(

PPC"Brand" Organic" Direct"

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TOTAL EFFECT- CORRELATE SPEND AND CONVERSIONS •  Leverages the strong correlation between spend and leads/conversions •  Models the number of leads and conversions by day •  Captures elasticity of the spend •  Captures local events (weather, seasonality) at the time/region level

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TOTAL EFFECT- BY REGION

•  Calculate effect of local spend within its region

•  How does national spend effects each local region

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DOLLAR SHAVE CLUB (CUSTOMER) ü  Started with a Youtube video ü  (The founder is the actor) ü  Video

MEASURE ü  Across digital, TV and Radio ü  Use actual air time of commercials (“post-logs”) ü  Tactical level- which shows, which programs, what times should

air?

RESULTS ü  Reduce cost per acquisition by 48% ü  Same budget, more conversions

RESULTS CASE STUDY

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OPTIMIZE

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TURN INSIGHTS INTO ACTION

BID TOOLS DSPS

IMPROVE PERFORMANCE AUTOMATICALLY

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OPTIMIZE CHANNELS TOP-DOWN

ppc brand display

social network paid cse

ppc nonbrand organic nonbrand

print social network

radio other

retargeting email

direct affiliate

organic brand

$(200,000.00) $(100,000.00) $- $100,000.00 $200,000.00 $300,000.00 $400,000.00

Revenue Delta Between Algorithmic and Last Click

SHIFT MONEY AWAY FROM NON-PERFORMING CHANNELS

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OPTIMIZE GRANULAR-LEVEL SHIFT MONEY AWAY FROM NON-PERFORMING AFFILIATES

7129936

next jump inc.

working advantage

7603626

dealnews.com

retailmenot.com

groupon, inc.

ebates

cartera commerce

goodshop

shopathome.com

$(30,000.00) $(20,000.00) $(10,000.00) $- $10,000.00 $20,000.00 $30,000.00

Revenue Delta Between Algorithmic and Last Click

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PLAN CAMPAIGN TIMING UNDERSTAND THE IMPACT OF AN E MAIL CAMPAIGN

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 65 67 70 72 75 77 83 86 88

Accumulated % of Conversions (In Days)

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MEASURE ü  Be Holistic – Track online offline touch-points & events ü  Avoid attribution solutions that rely on 3rd party cookies ü  Leverage a User ID to track cross-device

ATTRIBUTE ü  Use a true algorithmic attribution model ü  Validate that your attribution model is accurate against your data ü  Attribution data is useless without cost (need CPA & ROI)

OPTIMIZE ü  Ensure you receive actionable data and scenario planning tools ü  Feed attribution data into programmatic buying tools

SUMMARY WHAT WE PREACH

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