Attribution Meets Machine Learning: What You Need To Know
- Written by Chris Nixon, CaliberMind
- Published in Demanding Views
Three questions encompass everything a c-suite or board wants to know when it checks in with its marketing organization:
- How are we performing?
- How much is it costing us?
- Is it getting better or worse?
Sounds simple, right? You might be shaking your head right now, having full knowledge of the scramble and stress associated with coming to that table with clear-cut answers to those questions.
But doesn’t the B2B attribution technology out there give us everything we need to do this simply? If multi-touch attribution allows us to calculate the value of our marketing efforts, why are we still scrambling?
The answer is that traditional attribution models aren’t cutting it.
Chain-Based Attribution utilizes AI, machine learning and natural language processing — we are amidst the rise of the machines, after all. It works backward from closed-won/closed-lost opportunities, analyzing the complete chain of events to compute the contribution of each marketing channel to revenue.
That’s the simple explanation. Before I get into the complex one, let’s touch on why we’re in need of Attribution 3.0 in the first place.
Multi-Touch Attribution Hasn’t Delivered On Its Promise
Before you jump all over this, hear me out.
When early B2B attribution vendors introduced the concept of multi-touch attribution (MTA), it was game-changing. It brought about a major shift in how we think about customer engagement, and we haven’t looked back.
So how do we think about it? MTA ushered in a new method that called for assigning value to touch points across the customer journey. Once those values were assigned and you watched a few customers move through the buying journey, you could look across that in relation to the efforts you’ve created (calls, events, content, etc.) and say, “Hey! Nine out of 10 of our customers watched this demo,” and conclude that said demo must be super great.
Where MTA fails us is in its complexity and in its inherent bias.
Data culled from MTA quickly becomes siloed and complex to manage. Our tech stacks can’t digest and display the information in a way that is meaningful to our business.
But more detrimental is MTA’s misguided approach and the inherent bias that proves counterproductive to determining the actual truth around which of our marketing efforts are most valuable.
You see, we’ve been a channel-focused bunch — a worldview stemming from the early digital days where we were all just trying to figure out, very broadly, how to use various channels in the most advantageous ways. That evolved into a tech stack of solutions catering specifically to individual channels.
So, we divided up a chain of touchpoints and arbitrarily assigned each a value to determine which channel, program or campaign should get “credit,” and then shoehorned that multi-channel data into single-channel reports, tools and execution.
See the bias there? We decide the value of each thing. Before we even put a thing out there to be found and digested, we say, “This is big. We worked really hard on this event/white paper/email, and it really aligns with our customer journey. So, let’s make this count for a lot if someone touches it — especially if it’s the first touch.”
It’s a backward approach that will obtain you biased information about what your customers care about.
A New And Improved Approach To Attribution
Chain-Based Attribution is built on top of a model Markov rooted in probability and statistics. Instead of reporting on “credit,” as in a traditional MTA approach, it actually reports on contribution to revenue (or pipeline). And instead of being output-based (looking at clicks and downloads), CBA is outcome-based (looking at engagements tied to revenue). The model observes what your accounts do before converting, and what they do when they don’t convert, to measure what’s important.
Another really cool aspect of CBA and the Markov model is The Removal Effect. If you were to remove a channel or campaign, what would that effect be on your revenue outcome? Imagine being able to understand the revenue impact of a large event with a built-in report that takes one minute to generate.
CBA also attributes both marketing and sales touchpoints for full-funnel visibility, from anonymous to closed-won and beyond.
Oh, and it’s smart. Because CBA utilizes machine learning, with more data, your models continue to refine and improve over time.
CBA lets you predict your sales opportunity conversion with a much higher level of accuracy than any other attribution model. It’s the stuff marketing dreams are made of.
Chris Nixon is the VP of Marketing at CaliberMind and the host of the Revenue Marketing Report. Chris is a seasoned B2B SaaS marketing executive, leader and strategist. He’s an expert on progressive demand generation and account-based strategies. You can follow Chris on LinkedIn and Twitter.