Advertising platforms use touch attribution to measure effectiveness. For example, if a Facebook user sees your ad and then buys from you within X days, Facebook counts that ad as contributing to the purchase. That X becomes longer if the user also clicks on your ad. Other platforms have similar algorithms, but the parameters vary.
As your spend grows, and as you start using multiple platforms, this becomes inaccurate for two main reasons:
The problem manifests itself in platforms reporting attributed sales much higher than Google Analytics, sometimes higher than your actual total sales. See our Introduction to Attribution for more details.
Our system uses marketing mix modelling (MMM) to attribute sales, new customers, and other outcomes to advertising. This method does not attribute individual sales or customers, but works by correlating segments of advertising with desired outcomes and reporting in aggregate. For example, it can calculate how many new customers you acquired thanks to Facebook advertiaing, without detailing who specifically they were.
This method detects cause-and-effect link between the inputs and outcomes, is privacy-compliant, and does not rely on 3-d party cookies that are being phased out. It also reports on incremental value, e.g., how much extra sales can you get for additional spend.
InContekst can analyse and report on any combination of metrics for marketing inputs and outcomes. The most frequently used combination is amount spent for marketing inputs and sales revenue for outcome is gross profit. In this case, the effectiveness metric is return-on-marketing-investment (ROMI). Other metrics include cost-per-sale (CPS), cost-per-customer-acquisition (CAC), conversion rate from impressions or clicks to sales.
You can evaluate performance by any parts (segments) of your campaigns. Typically, such segments are defined by:
To get free access to the system and see how the calculation works for yourself, please contact us. We are working to make it as easy to use as possible, but certain aspects of MMM require explanation and support.
MMM also requires planning and data preparation. Use our data preparation framework as a guide.