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  • 1. Google Confidential and Proprietary 1Google Confidential and Proprietary 1 Attribution Modeling and Big Data Andrew Covato June 21, 2013

2. Google Confidential and Proprietary 2Google Confidential and Proprietary 2 Whats on the menu for today? Who am I? Marketing 101: The Basics Marketing 201: Digital Marketing Whet your appetite for attribution Conclusion: Digital marketing today = finance in the 1980s 3. Google Confidential and Proprietary 3Google Confidential and Proprietary 3 Who am I? (i.e. am I at least somewhat credible?) 4. Google Confidential and Proprietary 4Google Confidential and Proprietary 4 Ready to go? Let the fun begin! 5. Google Confidential and Proprietary 5Google Confidential and Proprietary 5 The Basics Marketing 101 6. Google Confidential and Proprietary 6Google Confidential and Proprietary 6 Half the money I spend on advertising is wasted; the trouble is I dont know which half. --John Wanamaker: Retailer, business man, innovator, advertising genius 7. Google Confidential and Proprietary 7Google Confidential and Proprietary 7 The question marketing execs are seeking to answer is 8. Google Confidential and Proprietary 8Google Confidential and Proprietary 8 What is the dollar value of sales generated by each of my marketing initiatives? 9. Google Confidential and Proprietary 9Google Confidential and Proprietary 9 Traditional offline marketing and advertising is impossible to track at an un-aggregate level 10. Google Confidential and Proprietary 10Google Confidential and Proprietary 10 MARKETING MIX MODELING but in the 1960s, big CPG firms developed a framework for measuring marketing ROI 11. Google Confidential and Proprietary 11Google Confidential and Proprietary 11 The Basic Principles of Traditional Marketing Mix Modeling (MMM) Inputs Controls Response Examples often other metrics or dimensions included Incremental Sales Volume 12. Google Confidential and Proprietary 12Google Confidential and Proprietary 12 MMM is great for describing macro behaviours, but sales attribution to specific channels is dubious at bestespecially with new advertising technology 13. Google Confidential and Proprietary 13Google Confidential and Proprietary 13 Digital Marketing Marketing 201 14. Google Confidential and Proprietary 14Google Confidential and Proprietary 14 What is this funnel you speak of? 15. Google Confidential and Proprietary 15Google Confidential and Proprietary 15 16. Google Confidential and Proprietary 16Google Confidential and Proprietary 16 Digital marketing allows advertisements to align with a specific persons instantaneous intent This makes ads hyper- contextual 17. Google Confidential and Proprietary 17Google Confidential and Proprietary 17 18. Google Confidential and Proprietary 18Google Confidential and Proprietary 18 There are many more dimensions by which to accurately target an audience at various stages in the funnel 19. Google Confidential and Proprietary 19Google Confidential and Proprietary 19 Ads (and advertising dollars) can be tailored across a variety of such dimensions 20. Google Confidential and Proprietary 20Google Confidential and Proprietary 20 Taking bite-sized nibbles from a buffet of complexity Whet your appetite for attribution 21. Google Confidential and Proprietary 21Google Confidential and Proprietary 21 Remember what we are trying to quantify (ROI by marketing channel)now lets set up the problem 22. Google Confidential and Proprietary 22Google Confidential and Proprietary 22 23. Google Confidential and Proprietary 23Google Confidential and Proprietary 23 Today, many marketers employ last-click, first- click, or other weighting schemes to value their channels 24. Google Confidential and Proprietary 24Google Confidential and Proprietary 24 But assigning weights will not show you the true value of each channelthe weights need to be derived using the data! 25. Google Confidential and Proprietary 25Google Confidential and Proprietary 25 Some things can complicate this 26. Google Confidential and Proprietary 26Google Confidential and Proprietary 26 Probability of conversion is path-dependent People are in various stages of awareness when they interact with an ad Lots of exogenous variables (e.g. competitors response to marketing) 27. Google Confidential and Proprietary 27Google Confidential and Proprietary 27 Technology is a further complicationyou need very detailed data to create a proper attribution model! 28. Google Confidential and Proprietary 28Google Confidential and Proprietary 28 For each user, we need a time- stamped record of each interaction with each advertisement 29. Google Confidential and Proprietary 29Google Confidential and Proprietary 29 We also need environmental data (some sort of competitive index) 30. Google Confidential and Proprietary 30Google Confidential and Proprietary 30 Oh, and we need to develop a model to project the users instantaneous awareness state 31. Google Confidential and Proprietary 31Google Confidential and Proprietary 31 If you have all this, however you wield great power (and responsibility) 32. Google Confidential and Proprietary 32Google Confidential and Proprietary 32 While respecting privacy, you can: Calculate, in real-time, each users instantaneous probability of converting Determine the best creative to show a user at 20% conversion probability to bump her up to 80% Understand how upper-funnel ads impact sales farther down the funnel Ultimately calculate a dead- accurate ROAS for each digital channel! 33. Google Confidential and Proprietary 33Google Confidential and Proprietary 33 How? Lets get technical We can use a high-order Markov model to calculate conversion probabilities at each path Or a first-order MM could be used to move visitors between states (Abhishek, Fader, Hosanagar) Alternatively (and possibly preferably), some sort of additive model with a time-decay for touch- points 34. Google Confidential and Proprietary 34Google Confidential and Proprietary 34 Who will develop the magic model? Digital Marketing today is like Finance in the1980s 35. Google Confidential and Proprietary 35Google Confidential and Proprietary 35 Questions?


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