San Francisco (July 31, 2013) – Kenshoo (www.Kenshoo.com), the global leader in premium digital marketing technology, today released a new study that finds marketers using multi-touch attribution models generate 12-30 percent more value from Facebook advertising compared to those using Last Ad or Last Click measurement techniques.
The research paper, “Quantifying the Impact of Multi-touch Attribution,” assesses the value of Facebook in the context of multi-channel advertising campaigns by comparing various attribution models to the still widely used Last Ad single-point measurement. According to the study, the Last Ad model undervalues Facebook advertising by 12-30 percent, compared to five industry-standard alternative attribution models: First Only, Prefer First, Divide Equally, Prefer Last and U-Shaped.
“Marketers relying on Last Ad attribution to optimize their campaigns could be making million-dollar decisions based on flawed data; so they can expect to achieve flawed results,” said Josh Dreller, director of marketing research at Skai. “Multi-touch techniques better reflect the reality of consumer behavior and enable marketers to improve budget allocation and campaign performance. Our study found the Last Ad model often discounted Facebook from conversions it helped drive, to the tune of being undervalued by as much as 30 percent.”
In order to determine the variance in value allocation, Skai analyzed the campaign performance data for their clients managing ads across multiple digital marketing channels during March, April and May of this year. The brands included in the study spanned a wide range of industries including retail, home improvement and financial services, with the total data set covering millions of clicks and direct online sales conversions. As not all marketers define conversions the same way, Skai used a Cost-Per-Acquisition (CPA) metric across all advertisers in the sample. CPA was calculated by aggregating all recorded conversions and dividing that number in the total media cost of the ads which drove them.
Each model studied found the Last Ad technique under-valued Facebook ads to a different extent:
- First Only: Facebook was undervalued 30 percent using the Last Ad model
- Prefer First: Facebook undervalued 20 percent using the Last Ad model
- Divide Equally: Facebook undervalued 16 percent using the Last Ad model
- Prefer Last: Facebook undervalued 12 percent using the Last Ad model
- U-Shaped: Facebook undervalued 15 percent using the Last Ad model
“As Facebook continues to become even more of an essential component of the marketing mix, it’s critical that all advertisers be aware of the costly oversight inherent in the Last Ad model,” added Dreller. “The use of multi-touch attribution helps to accurately quantify the value of Facebook ads within a cross-channel campaign and helps marketers optimize spend to boost ROI.”
About Skai
Skai is a digital marketing technology company that engineers premium solutions for search marketing, social media and online advertising. Brands, agencies and developers use Skai Search, Skai Social, Skai Local and Skai SmartPath to direct more than $25 billion in annual client sales revenue. The Skai platform delivers Infinite OptimizationTM through closed-loop targeting, universal integration, and dynamic attribution. Skai’s adaptive technology, proven algorithms, and unmatched scale power campaigns in more than 190 countries for nearly half of the Fortune 50 and all 10 top global ad agency networks. Skai clients include CareerBuilder, Expedia, Facebook, KAYAK, Havas Media, Hitwise, iREP, John Lewis, Resolution Media, Sears, Starcom MediaVest Group, Tesco, Travelocity, Walgreens, and Zappos. Skai has 16 international locations and is backed by Sequoia Capital, Arts Alliance and Tenaya Capital. Please visit www.Kenshoo.com for more information.
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