For as long as advertising has existed, businesses have struggled with connecting the dots between advertising dollars spent and the return on that investment. As technology has advanced, attribution models have developed and have become much more precise and workable. However, until recently, attribution was simply based on click through reports from vendors and CRM providers which are largely either biased or unreliable.
How many times have you discovered a salesperson sourcing a customer to a non-existent marketing campaign? Sadly, most attribution is unreliable and provides poor, unworkable data. Dealerships are thus unable to make accurate and informed decisions about how to optimize their advertising dollars.
Here’s the deal: There are several different types of attribution, all of which have their own logic.
When it comes to digital, up until now it’s been either the dealer or the vendor’s choice as to which method of attribution to adopt. However, as consumers are now influenced by multiple offline and online touchpoints, how are you supposed to know what – and how much – influence each marketing partner had in bringing that customer in and producing an actual sale?
If you ask your trade-in widget provider, anyone who converted and purchased a vehicle from your dealership would be credited to them. Credit application? Same thing. What about third-party listing sites? There are so many metrics involved – impressions, conversions, call-tracking numbers, etc. – that it is almost impossible for a dealer to, on their own, consolidate all this data and get a holistic picture as to how, what, when and where marketing partners bring customers into their dealerships.
Let’s look at historical attribution models:
First click attribution: This attribution model gives all the credit for the sale to the first trackable touchpoint that a consumer encountered. Keep in mind that, for the most part, this is all via digital tracking. This method totally invalidates any influence your television, radio or newspaper advertising may have had on the customer prior to them going online. And, is that first touchpoint strong enough that it invalidates every other marketing effort your dealership invests in? Does it really give you a true picture of what drove that customer to the sale?
Last click attribution: This attribution model is largely used simply because it’s the easiest and simplest method. A consumer clicks on a conversion method – trade-in, credit application, VDP, test drive offer, etc. – converts and then buys. It’s fairly simple to draw a line between a lead and a sale. And that’s what dealers like because it is easy to understand. Does it make it accurate? Was that trade-in tool the “thing” that influenced the consumer to visit your website and buy a car? Or were there more influencing factors along the way? If you ask the trade-in widget vendor, they helped you sell a car. And they certainly were part of the process. But should it really get 100% credit for the sale?
Time Decay: This attribution model takes into account both first and last click attribution, but also factors in the time between conversion and sale, to determine which vendor should be credited. Perhaps the customer was already in your CRM from a past interaction. Maybe they converted on a third-party site, but didn’t buy. Then, six months later converted again on a VDP or other touchpoint. Who do you give credit to? This attribution model gives credit to the most recent touchpoint/conversion and discounts all the others a consumer might have journeyed through.
Multi-touch attribution – Due to technology, we can now more accurately track and measure the multiple (and growing) influencing factors that contribute to an auto buyer’s journey from start to finish. You can even connect the dots between offline and online touchpoints. With multi-touch attribution, you can finally see how your marketing dollars truly influence your customers. Rather than relying on first or last click attribution to determine what’s effective, you can get a better picture of how your offline and online marketing works together to bring buyers to your doorstep.
In today’s digital culture, consumers are influenced by multiple sources. They read reviews of vehicle models and dealerships, search prices and bounce around from site to site like never before. As a result, the average number of dealerships visited before purchasing a vehicle is dwindling. It is more important than ever before to know how effective your marketing dollars are at bringing those prospects from the anonymous browser into your showroom. Through precise, more accurate measurement, you can optimize the advertising mediums and sources that DO contribute to the sale versus those that do not. No more guessing – now you can actually know.