For those that can remember the days before online, it was a simple world with straightforward buyer journeys, single channel campaigns and a sale that ended either in a retail outlet or via a catalogue. Fast forward 15 years and the way we shop and consume media is unrecognisable. A buying journey now typically involves multiple channels, each with its own role to play in influencing or converting the sale and we now have access to vast amounts of customer data, whether that’s transactional or increasingly real time data, such as browsing data. Gone are the days of a linear acquisition funnel where consumers went through a predetermined customer journey with little diversion from the expected norm. This has been replaced with complex customer journeys involving a myriad of different channels and influencers. The result? A fundamental shift in the way we target, engage and convert customers.
This fragmentation of channels and the plethora of data that a buying journey now produces, has given us huge opportunities to target and speak with our customers but it has also created unprecedented challenges in terms of identifying the right blend of channels and having sufficient transparency to understand the impact of each channel and how it is contributing to the overall result. We are also seeing a shift in the role of different channels. Assumptions that we have previously taken for granted are being questioned - for example, direct mail (DM) was traditionally seen as a pure response channel, however, we are increasingly seeing that DM can have a role to play in influencing and amplifying campaigns. This scenario is being mirrored across many channels when combining as part of an integrated campaign.
So how has this channel fragmentation impacted on our marketing? Back in the early 20th century, successful retailer John Wanamaker famously said “half of my marketing budget is wasted but I don’t know which half”. 100 years on this still rings true for many brands who struggle to understand how individual channels influence a sale. The ongoing debate about last click analysis and artificially high attribution rates for SEO/PPC are testament to this. So how can brands ensure they achieve the perfect blend of channels and what can they do to identify how and whether channels are contributing positively to the response and ROI of a campaign?
We know that campaigns are no longer about single channels so it makes no sense to have siloed marketing teams each operating with their own budgets, objectives and campaigns. Forward thinking brands are increasingly beginning to structure their marketing around their customers with customer specialists sitting centrally, with a bird’s eye view over customer journeys and the integrated campaigns that are driving a customer to a sale. Creating a more joined up approach with customers at the centre provides a level of visibility and a holistic view that isn’t achievable with traditional channel-led structures.
Additionally, brands looking to get their channels working together also need to place data and data teams at the centre of activity. Data is increasingly a by-product of our customers’ actions and this granular level behavioural data can provide invaluable insight that can be used to drive campaigns. We still need to get to grips with big data and achieve the holy grail of marketing - the single customer view. Once we have this overview of our customers we are able to use insight gained in one channel to optimise another channel. With a customer journey being made up of so many touch points it is essential that we are able to cross channel boundaries when it comes to insight. Without that capability we will never truly deliver relevant, engaging, integrated campaigns.
So, you have created a team structure without channel barriers, you have developed the right database and you have the ability to extract value from your data, what next? Well it’s time to take a deep dive into campaign results. Understanding how and importantly why your campaigns are performing on a granular level is essential if you are serious about improving results and getting channels to work optimally. The most successful campaigns are rarely campaigns that stand still, they are often built on an ‘optimise and innovate’ approach with constant measurement and refinement driving constant improvements to the campaign. So what are the techniques for extracting this insight?
Attribution modelling provides an invaluable insight into customer journeys and allows you to see the impact of exposing them to different marketing activities. Essentially, attribution modelling allows you to isolate every channel in a campaign and ask the questions; is this delivering an uplift on response rates? is it having a positive effect on my ROI? This level of analysis is critical if you truly want to understand the role and impact of individual channels and ultimately find that perfect blend of channels that will give you optimal results. Once you break down the individual channels you can start to understand the sum of the parts and start to optimise holistically.
Of course there are other factors that contribute to the success of a campaign and it’s important to be able to measure the impact of these factors if brands are going to accurately plan and predict outcomes of future campaigns. Econometric Analysis is an essential tool in separating the effects of individual influences and quantifying their individual effects. Simply put it allows brands to isolate factors that have an impact on response and ROI and measure that impact. Econometric modelling allows us to cut through the different effects of price changes, promotions, seasonal differences, competitor activity and many more factors, providing a huge amount of transparency over results. Once again, this type of analysis can deliver insights that can be used to predict future outcomes and allow for improved planning.
It’s clear that the opportunities for optimising channel performance are vast and the rewards are large with increased response rates, reduced risks and improved ROI. Brands who have successfully achieved a holistic view of their campaigns by breaking down channel barriers and demanding greater transparency from their data are already reaping the rewards. At a time when marketing budgets are increasingly being scrutinised and boards are shining a spotlight on measurable results, it’s only a matter of time before everyone catches up.
By Alex Kirk, Managing Director of Medialab Group.
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