A Markov graph illustrating probabilities of individuals interacting with certain channels proceeding to another channel or to a conversion, as output from Windsor.Ai Attribution Insights for a Switzerland-based company. Facebook and Google are significant in leading to a conversion, with Admeira and Tamedia relevant but not nearly as influential.
Here at Windsor.ai, we are proud of our ongoing work with many successful advertising teams across a number of industries. Using multi-channel attribution models, we ensure quality measurement and optimization of marketing performances. We pride our attribution models on their rational basis in data as well as complete transparency in how their insights are made. As we work as independent contractors, we provide frank, professional reports about your business’s marketing expenditures.
Our Attributions Insights product analyzes the full customer journey. Its algorithms evaluate your touchpoints and budget, and optimize based on cost-effectiveness and results.
Examples from the Swiss experience
In our media-saturated world, companies work with a variety of different advertising platforms and channels to target their potential clientbase. These vary from print, online, television, outdoor advertising, and much more.
Our organization works in markets across the world. But with our headquarters in Switzerland, and our founders from Switzerland, we take a special interest in the marketing environment in the Helvetian Confederation. Those interested in broadening their company’s international presence would be wise to take Switzerland into account, with its strong purchasing power and diversified economy. Not to mention our country’s beauty!
Zurich, the home of Windsor.ai’s global headquarters. Source: Davide Restivo, CC-BY-SA 2.0.
In Switzerland, there are two major, “traditional” media companies. Tamedia, which has been around since 1893, and Admeira, a joint venture between SwissCom, SRG, and Ringier. As such, those interested in targeting the Swiss consumer market will likely find themselves considering marketing channels controlled by Tamedia or Admeira.
Nonetheless, the global online advertising market is effectively a duopoly dominated by Facebook and Google. And their control is only growing. According to Fortune, total online ad spending in the United States that went to Facebook-or-Google-controlled channels increased from 72% in 2015 to 77% in 2016. 99% of the growth in total spending on online advertising went to those two multinationals. Google, Facebook, and YouTube (a fellow Alphabet Inc. subsidiary, along with Google) domains also make up the most popular websites for residents of Switzerland.
These two giants have a massive presence in the Internet usage of people in Switzerland and across the world. They harvest so much information about us that they have targeted marketing down to a science.
For a Switzerland-based client, we used our Attributions Insights solution to plot out the effectiveness of their existing marketing channels (which included Google, Admeira, and Tamedia) using a Markov graph. This calculates the probability of a transition of a consumer’s attention from one marketing channel to another channel, to a conversion to a sale, or to a failed conversion. We prefer Markov models for attribution modelling, as they avoid a number of significant biases that other models provide.
What did we find?
Admeira remains a strong channel for our client. For several customer journeys, it is an early channel that leads to further engagement before a conversion. But when looking at the total importance in the funnel, Admeira is outclassed by Google-controlled channels.
Taking into account all the touchpoints in a journey, the Marketing Return on Investment (MROI) of Google is typically double that of Admeira.
Showcasing the importance of Google in the Markov chain. A variety of attribution models show Google’s AdWords as over five times more influential than Admeira.
How about Tamedia?
Looking at the Markov attribution model (which was most favourable to Admeira) the MROI of Google’s AdWords is over thirty times that of Tamedia channels. Looking only at last click attribution Tamedia would be effectively irrelevant and not worth any investment at all.
With a Markov attribution model, the ROI of Google remains ten times that of Tamedia. Looking only at last-click attribution, Tamedia would not even register.
What about the efficiency of customer journeys with Admeira involved?
A typical customer journey for a converted Admeira visitor would be:
Admeira -> Admeira -> Admeira -> Admeira -> conversion
So we have four Admeira touchpoints before a conversion. This is not very efficient, as four channels, instead of one or two, are implicated in an Admeira-involved conversion.
What can and should an advertiser do?
Understand the customer journey.
How do your clients get from initial interest to purchasing what your company has to offer? Answering this question lets you see which marketing channels lead directly to conversion, and which ones are involved in slower conversion paths
Use modern attribution modelling for cost-effective marketing decisions.
Once you know your customers’ journeys, and have assessed the costs of each marketing channel, whichever ones have a higher ROI should be allocated greater marketing resources. Channels with lower conversion rates should have their investments decreased, or possibly eliminated.
This is the best way to see where the budget is effectively spent, resulting in significantly improved outcomes.
Traditional media faces ongoing challenges in our information age.
With a social media, search, and streaming video duopoly becoming ever more influential, eating up marketing dollars as they offer exquisitely-targeted advertising solutions, traditional media channels are struggling in the 21st century. Nonetheless, the shifting media landscape is something they are aware of; Admeira, Tamedia, and many others have been diversifying their offerings to expand the channels available to marketing teams.
Here at Windsor.ai, we hope that alternative marketing channels prove valuable to businesses, as duopoly power poses risks to the long-term health of any industry.
Make sure that your marketing spend is cost-effective. Contact us to get your marketing ROI optimized.