My new column is live in The Drum:
Digital attribution is dead! Les Binet tells us why marketers need econometrics in 2023
The Drum columnist Samuel Scott recently fell down a rabbit hole and into the world of econometrics with effectiveness expert Les Binet. Here he explains what marketers need to know as digital attribution degrades.
What is better – information that is cheap and wrong or information that is expensive and accurate? Soon, marketers may have to decide.
Some months ago at my day job as head of marketing at the IT mapping software company Faddom, we saw a decline in organic search engine traffic. I could not figure out why. There was no evidence of a Google penalty, it wasn’t an SEO issue.
So I decided to look into some statistical correlations. On a hunch, I made a list of many potential variables that might have affected the traffic – no matter how far-fetched – and plotted their changes against the changes in organic traffic and the numbers of Google searches and clicks for our brand name over the same several months.
One theory was that a decrease in our Google Ads spend might be a secret search engine ranking factor. Another was that spending less on Google Ads resulted in fewer people seeing our brand name, becoming interested in us and then searching for the company. But we found that there was an 11% correlation between Google Ads spend and people searching for our brand name and clicking to our website. There was a 6% correlation between Google Ads spend and total organic website traffic. So those were clearly not the issues.
Instead, there was a 96% correlation between the number of cold sales emails that our business development team would send out and the number of Google searches for our brand name and resulting website clicks. Put simply, we inferred that people would receive an email, wonder who Faddom is, search Google for the name and visit our website.
Now here’s the issue. Google Analytics logged those visits as organic search engine traffic because they did indeed come from the search engine’s unpaid results. But in such specific cases, the cold emails – not SEO – should get the credit. The decline in organic traffic had almost surely come from the team temporarily sending fewer emails.
What can readers learn from my day job headaches?
First, marketers should remember that so-called ’outbound’ and ’interruptive’ marcom can be extremely effective – no matter what nonsense HubSpot has told the industry for the past 15 years to sell its own ’inbound’ marketing software. Second, I remembered the story as yet another example of how analytics dashboards, digital attribution and the entire online world can be misleading at best or completely wrong at worst.
In fact, it will likely be one of the biggest problems that marketers will face in 2023 as we see the planned death of third-party cookies, 43% of people now using adblockers that also stop scripts such as Google Analytics from running and the iOS 14 update that stopped ad tracking on Apple devices.
Econometrics – also known as marketing mix modeling (MMM) – might be a solution. After all, the attribution-based online marketing world that many have known for the past two decades is rapidly disappearing.