What’s the value of attribution?
Marketing influences 100% of all new logo revenue for B2B companies. I might go so far as to say all revenue, not just new business.
It’s a bold claim, I know, but for my money I can’t think of a single example of when a company would make a purchase, however insignificant, without visiting the vendor’s website first. Assuming that’s true, one could argue that every single purchase, and therefore every single dollar or pound or euro is influenced by marketing. Taking it a step further, if 100% of the revenue pipeline is influenced by marketing, what’s the value of attribution models at all? They’re typically hard to build, difficult to manage, and without keen attention to detail, can oftentimes be misleading. So why do we as marketers spend so much time pursuing this elusive and treacherous metric?
One answer is that it is very gratifying to be able to prove marketing is contributing real revenue to the pipeline. The second is that it brings a level of precision to a subjective exercise, increasing our confidence in the data because it is so specific. Intrinsically, it just feels good to be able to say that this webinar contributed $2455 to the overall deal. What’s not to love about that?
While I am not disparaging the value of attribution, nor am I suggesting it should be abandoned, I am saying there are limits to the lengths you should go to attribute marketing activity to revenue as the risks of false precision and diminishing returns become more pronounced. Let me explain.
Let’s start with the risk of false precision. Delivering a specific value for any individual tactic relies on the model used to calculate it. There are multiple examples of these models, first touch, last touch, W, U, linear, just to name a few, and they all are built on subjective logic. Where the emphasis is placed during the customer journey is a matter of opinion. I laud those software companies that provide many different models, some will even allow you to manipulate the underlying logic of each model, because they are providing a multi-faceted look at the pipeline. But there’s no getting around the fact that the calculations are based on estimates, assumptions, or guesses. Once you accept that, it becomes harder to argue that any individual tactic is responsible for a specific dollar amount of any particular deal. In the aggregate, perhaps, but even that is a risky proposition as the underlying subjectivity still remains.
Additionally, building, monitoring, and maintaining multiple attribution systems/models is a significant investment in time and energy. In a world of constrained resource, every minute you spend trying to attribute value to specific tactics has an opportunity cost. Could the team be generating additional programs or tactics, versioning existing ones to drive greater engagement, or building a personalized nurture stream that could deliver greater value than squeezing out the last few dollars of tactical attribution? Need to find the right balance.
With all of that, should marketers be spending any time on attribution at all? The answer is a resounding yes. But it needs to be done intelligently, with an eye towards overall effectiveness. A good rule of thumb is to pursue quantifiable attribution only as far as you plan to make investment decisions. For example, if you are going to optimize your digital investment across multiple platforms, it is important to quantify each channel’s contribution to leads, opportunities, and ultimately revenue through attribution. LinkedIN may deliver a higher ROI than Facebook, and your attribution model needs to be able to delineate between those two channels. Alternatively, if you hope to optimize different creative versions on the same platform, your attribution model needs to accommodate that level of detail.
Every high-performing demand engine is built on knowing what’s delivering value. Channel optimization and maximizing marketing’s ROI relies 100% on knowing what programs, channels, and tactics are generating revenue. Attribution accuracy is the fuel that powers this improvement but beware the risks of relying too heavily on specific amounts or chasing your own tail. A modern attribution engine, paired with a healthy dose of common sense, can provide that quantification of marketing’s value that you seek, and help you accelerate top line revenue growth for everyone’s benefit.