We love last click attribution. There, we said it.
Last click attribution is the digital analytics practice of giving 100% revenue attribution to the last channel (SEO, Email, Google Ads, etc) a customer clicked on before purchasing. As you can imagine, your lower funnel channels get a ton of revenue credit like email and brand PPC, and your upper funnel channels get very little revenue credit, like Facebook ads and a big chunk of SEO.
We love last click attribution because… well, we’re masochists, I guess you’d say. We love putting ourselves in uncomfortable situations and seeing what we’re made of. And last click attribution does exactly that. “Ooooo, those Facebook ads got a measly .2 return on ad spend… so you lost 80 cents for every dollar? Tell us more!” As we enthusiastically rub our hands together like we’re opening a beautifully wrapped gift. The masochists in us immediately start analyzing traffic quality, the landing page performance, and the audience-message resonance to see what can be finely tuned to get it from a 20% return to a 50% or 100% or more. Those are all fantastic tactical decisions we can make off last click attribution.
Hold one sec, though: What every digital marketer and executive absolutely should NOT do, based on last click attribution? Make strategic decisions about your marketing mix. Decisions like cutting a channel from your marketing mix, decisions about doubling down on a channel that seems to be working great, and decisions about the overall marketing spend and where to place it. But we keepers of the marketing budget go ahead and do it, don’t we? We can count on one hand the number of marketing leaders we’ve worked with who aren’t making this same mistake.
The Mistake Last Click Has Us Making
You see, you have channels that do a fantastic job of converting highly interested prospects TODAY. And you have some channels that do a fantastic job of finding your next new highly interested prospect that ultimately converts down the road. The former we call “bottom of funnel” channels, and the latter we call “top of funnel” channels. Both are critical to building a healthy D2C channel for a brand.
Buuuut, so many brands get stuck only investing bottom of funnel channels because on a last-click basis, that’s what appears to be making all the profits. If you’re always pushing your digital team to spend more in brand PPC, retargeting ads, or to send more emails, you might be in this boat.
The reality, though, is that these channels dry up if you don’t constantly fuel them with potential new prospects using top of funnel channels. But on a last click basis, these top of funnel channels look like they are racking up marketing spend with very few dollars. Here’s an example from a weekly scorecard of a client of ours and their last-click performance on Facebook Ads, a top of funnel channel for them:
Aaack! We’re losing $2 for every order we get! Last click attribution would guide us toward turning this channel off…
If we were to make decisions based on this snapshot alone, we would turn this channel off in a heartbeat! But at what cost? A deeper look shows us it’s actually fueling the overall marketing funnel, and building the brand. When we look at things holistically, it’s a different story:
Facebook ads are behind the scenes working toward overall strong revenue and profitability performance. The blend of all channels working together is getting us a net profit of $2 for every order.
How to Make Better Strategic Decisions About Your Marketing Mix
So how do you do better? There are some incredible, but very expensive, tools out there that will give you proper multi-touch attribution and a holistic view of how your channels are doing. These are fantastic for eCommerce companies doing $10+ million in annual revenue.
But the simpler solution?
Two things:
Every platform has a tracking pixel you can put on your order confirmation page. Place it, and that platform will tell you how many conversions it assisted in driving, without regard for any other channel’s role in the consumer’s path to purchase. If it doesn’t track revenue alongside the number of conversions, just multiply your AOV x Conversions to get the estimated revenue that channel is contributing. Greater than your ad spend? Great! It’s an important and viable channel to keep and optimize.
Our recommendation: Take a portfolio approach to measuring your marketing performance.
Portfolio Approach
Think of your marketing channels like an investment portfolio. You’re going to have some losers, you’re going to have some winners, and overall, the result is a growing investment portfolio. With your marketing channels, you’re going to have some that look like they don’t perform on last-click, you’re going to have some that really perform well on last-click and overall the entire marketing mix is a healthy, profitable mix that grows your brand consistently and steadily.
What’s happening behind the scenes is that the bottom of funnel channels are raking in such a high ROAS that it’s giving ground cover to the top of funnel channels so the brand can keep investing in building the brand. This doesn’t happen by accident.
Actionable Steps to Take:
Work with the finance team to determine the ROAS that is break-even. Factor in all costs – COGS, overhead, marketing budget. In our experience it’s usually, not always, around the 300% ROAS mark for brands selling direct to consumers.
Optimize your bottom of funnel channels to get at least a ROAS double your break-even
Optimize your middle of funnel channels to get around your break-even ROAS
Allow your top of funnel channels to get between a 50-100% ROAS (or better)
Adjust how much of your overall budget you invest in each area of the funnel so your overall ROAS comes in where you need it to, which usually depends on whether your brand is a start-up or well-established brand.
Want to have us do an audit of your marketing mix? Schedule a complimentary, sales-pitch-free, 30-minute strategy session with us:
