Brought to you by: The Trade Desk
It's tempting to credit a sale to the last thing a customer saw or heard before it happened, even though the reason is often far more complex. Even direct marketers with full access to their sales data aren't immune to this tendency, called the "last-click attribution" fallacy in digital marketing analytics.
But now Facebook's Atlas ad serving and analytics unit has some proof it can share from one of the biggest direct marketers – Guthy-Renker's Proactiv – that just because someone completed a sale after clicking a search ad, the search ad doesn't necessarily deserve all the credit.
In a study of 12,000 online Proactiv purchases tracked back to the first contact with online advertising, Atlas found that 16% of the online buyers clicked on search ads after first being served an online display ad.
The rest of the online sales came roughly equally from clicks on display ads (43%) and clicks from search ads (41%), said Erik Johnson, head of Atlas.
"I always suspected that increasing display advertising on a last-click basis undervalues its true impact on driving new customers," said Guthy-Renker CMO Jay Sung in a statement. "Now I know. And now I can make better choices about how to balance budgets across tactics."
Atlas tracked the digital "path to purchase" through anonymized monitoring of Facebook users' online activity. Such "people-based" tracking via mobile and digital provides coverage that cookie-based analytics can't, Mr. Johnson said.
Though Facebook wouldn't mind encouraging people to buy display ads, the story for Mr. Johnson is also about people using different kinds of display ads.
"One of our objectives is to improve the quality of marketing on the internet," Mr. Johnson said, by showing that an ad doesn't necessarily have to produce an immediate click or online sales conversion to work.
"If you know that people are going to see a display ad and then maybe not click at that particular moment but take that ad into context and then maybe in the future go search for something and click at that point, you might run a different type of ad," Mr. Johnson said. "Instead of making every display ad part of a click event, you might make it part of a longer process."
One thing Atlas didn't track is the impact of TV ads, which Proactiv buys a ton of – an estimated $114 million worth for the 52 weeks ended July 22, per iSpot.tv. Atlas can track the impact of online video advertising, though it didn't in this case, but offline TV is still off the table until people start logging into that using their Facebook identities.
But researchers who have studied cross-media impact say the "last-click" fallacy can extend beyond attributing every search click to search advertising. Media consultant Jon Mandel, who led the PrecisionDemand TV-targeting and analytics firm before it was sold to AOL last year, said the firm had seen in numerous cases that TV and even radio advertising often had a bigger impact on e-commerce sales than search or even digital display. Search, Mr. Mandel said, is often more of a "demand collector" than a demand generator.
Rex Briggs, CEO of analytics firm Marketing Evolution, noted the similarity of the Atlas-Proactiv findings to a study a decade ago for 1-800-Flowers found that 18% of online sales volume from search ads came from people who had been exposed to digital display ads first but didn't click on them. The rest of the sales volume from search ads were caused mostly by other offline media, such as TV, out of home and radio.
Research for other skincare brands has shown similar results, Mr. Briggs said. "An interesting question is how can we help marketers institutionalize this learning so they can move on to the next step of research questions, such as how to dynamically optimize TV and digital to increase the contribution to sales above the rates we saw a decade ago."