With nearly nine in 10 retailers having increased their marketing budgets in 2018, according to RetailMeNot, merchants are strongly motivated to ensure the money is being spent effectively. But with the oversaturation of available data points changing how retailers view the shopper journey, the a question that should be on every retailer’s mind is: Am I measuring this spend accurately?
The RetailMeNot survey indicates that the top three ways brands measure the success of offers and promotions include:
- Increasing sales revenue (56%);
- Driving new customer growth (55%); and
- Increasing brand awareness and brand perceptions (50%).
EBay, Verizon Share Attribution Success Stories At Shop.org
Revenue and overall growth are obvious indicators of a retailer’s success across the board, but understanding and calculating attribution across channels is a major puzzle piece necessary for marketers to track their campaigns. In a session at Shop.org in Las Vegas, Tony Flanery-Rye, Senior Director of Growth Analytics for eBay, and Andrea Wasserman, VP of Retail experience at Verizon, gave a deep-dive look into their marketing spend and attribution strategies.
EBay’s attribution strategies still depend on the product sold and the length of the typical sales cycle, said Flanery-Rye. He noted that there is still no definitive answer as to whether the company should move entirely away from “last-touch attribution,” which credits the last channel to present an advertisement to a converting customer for the sale, to “multi-touch attribution,” which credits various channels throughout the customer journey for sales conversions.
“What I would advise people to do is to decide, what do we sell?” Flanery-Rye said. “What do our customers do? If I do some research here, how many of them are actually making lots of stops along the way, and how many are just coming once? You then have to make the tradeoff decision between wanting the extravagance and overhead to get a multi-touch campaign going, because it’s a lot of work and it’s hard to interpret.”
It’s true that attribution can appear throughout the retail enterprise, whether it’s in the store, online or at home. Verizon is using multiple tools to figure out where to place attributions correctly. The company uses customer surveys to gather Net Promoter Score (NPS) data on service interactions, and even rolled out a “Smart Setup” where customers can enter a store, purchase a new device (either an upgrade or brand new) and then go back home while the contacts and settings gets transferred to the new device.
“Certainly there are quantitative elements there, and also some qualitative insight, into how customers are feeling as they engage with us across channels” Wasserman said. “We’re looking at what the initial behavior was, whether it was a purchase or the beginning of an order. What does it look like as people do, or choose not to, follow the experience all the way through? There’s certainly a lot of information that we can learn from that.”
Overstock.com Takes Incrementality Approach To Attribution
Attending this session took me back to RTP’s Retail Innovation Conference in May, specifically the session titled: Controlling And Measuring What Matters In Digital Advertising. In this “fireside chat,” Nariman Noursalehi, VP of Marketing and Customer Acquisition at Overstock.com, revealed the benefits his company saw from modernizing its approach to measuring advertising ROI, particularly by focusing on incrementality.
Overstock spends approximately $50 million annually on Facebook, with the retailer generating 6.5X incremental ROI via digital advertising through A/B tests performed on the platform, said Noursalehi.
“Until you can tie ROI to an actual incremental value, I think it’s just a number,” said Noursalehi during the conference. The larger point here is that a campaign’s ROI total doesn’t mean as much for a retailer if it still includes customers that convert regardless of whether they even saw an ad.
All these cases show me that the old ways of attributing a transaction are only going to continue to drift away — especially as more retailers sell through more channels, expand product lines, create more content offerings and gather a larger social following. In this new environment, retailers will have to test and measure their campaigns more thoroughly than ever before.