Australia's financial industry might be stuffed full of bean counters. But their marketers aren't applying maths to attribution. That means they are wasting money. Not a good look for banks, or their chief marketers.
They could take a look at how hoteliers, retailers and travel companies are working out which parts of the chain lead to a purchase and focus their efforts accordingly, Aaron Goldman, global CMO of Kenshoo told AdNews.
The firm's technology runs the numbers on which part of the chain led to a purchase or a booking – or other meaningful action by consumers. "It's the glue ... it connects the dots between the different channels" so that brands and businesses can see the full picture of where their business is coming from, and how it arrived at a transaction, said Goldman.
With more channels, screens and content than ever, the challenge for brands is to break through the clutter and connect with customers. Then they have to manage it at scale and work out what is working and what is not. Then they have to work out what is coming next and sort the wheat from the chaff.
Goldman said that's where the firm's platform comes in, which combines search, social and local (local commerce takes two thirds of online ad spend, he notes). For example, if a retailer plugs its inventory into the system, Kenshoo is notified, the ad automatically generated and traffic driven. It can then analyse where the customer came from, and what helped drive them to a purchase. That means the brand can "handle all of that in one place – via search, Twitter, Facebook etcetera, and then manage it", said Goldman.
Locally, he said more companies are managing that process in-house rather than leaving agencies to do the work. "As digital becomes more mature there are more people with knowledge, so it is no longer monopolised by agencies. More brands are [taking digital] in-house. It's a trend we're seeing accelerate here and globally."
The Accor Hotels group is one such firm, The Iconic is another, and they can attribute value to the ads that played a role in the purchase decision and weight their marketing spend accordingly.
The key element for marketers is to understand attribution. That's what part of the platform does. "It looks at each ad in any path to conversion, looks upstream at all the clicks that lead to it and ascribes value. Then it makes allocation decisions and updates bids based on value. So if we see a Facebook ad had a part to play, we can increase the bid rather than the last click."
For retail and service sectors reliant on bookings, that's relatively straightforward, said Goldman. For financial services it is more challenging, because of the time taken and the processes – on and offline – involved in the purchase decision. But that's no excuse to be paying the wrong amounts to companies in the digital chain that help drive customers into a financial product, Goldman suggests.
"Because it is a long-term process it is harder to connect the dots. But in some ways they need this solution more than anyone. But because there is more room for error when things go offline, they are slower to embrace it."
In terms of overall trends in Australia, he said that "sophisticated marketers" are moving from cost per acquisition models (CPA) to return on investment (ROI). They are looking for the valuable customers.
"We're definitely seeing more marketers shifting to that model. For example if you are in travel, a cruise has a different margin contribution, followed by a flight, followed by a car. Retail, are they buying boots or a pair of socks? As marketers take these things into account they can get more intelligent about how they drive the most profitable traffic and conversions rather than traffic per se."
He said that the industry has begun to pull away from last-click attribution, something that has long dogged channels such as Facebook, and is now beginning to put its money in the right places.
That's something the financial services sector would advise.
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