In the complex terrain of ecommerce marketing, the perennial challenge is figuring out what part of your marketing spend is truly driving results. It’s like that old marketing adage—knowing that half of your marketing works, but not knowing which half. This is where the strategy of cross-channel marketing and sophisticated attribution comes into play, allowing businesses to navigate this uncertainty more effectively.
Understanding the Attribution Puzzle
The key to untangling the attribution puzzle in marketing is to focus on measurable business metrics. By closely monitoring these metrics and observing how they change in response to various marketing efforts, companies can start to discern more clearly the effectiveness of their spending. There are two primary metrics that are particularly insightful: New Customer Acquisition Cost (CAC) and the Media Efficiency Ratio (MER).
- New Customer Acquisition Cost (CAC): This metric calculates the cost of acquiring a new customer by dividing total marketing spend by the number of new customers gained. It’s essential for ensuring that marketing efforts aimed at existing customers do not skew the overall performance metrics.
- Media Efficiency Ratio (MER): This is the total revenue of a business divided by the total ad spend across all channels. MER helps cut through the noise of attribution, providing a clear picture of how a business is performing relative to its advertising expenditure.
Scaling and Attribution Across Channels
One of the more surprising insights in cross-channel marketing is how scaling a seemingly less efficient channel, like a YouTube channel with a $1 return on ad spend (ROAS), can benefit the overall business. This phenomenon occurs because such scaling can enhance the performance of other marketing channels, illustrating the complex interplay within multi-channel strategies.
A typical customer might interact with a brand multiple times, through various channels, before making a purchase. They might also visit the website multiple times across different devices. Attribution platforms attempt to assign value to each interaction, but this often doesn't reflect the messy, non-linear paths real people take to a purchase.
Strategic Testing Within the Funnel
Effective cross-channel marketing requires filling the upper funnel with strategies that increase brand awareness. This can include channels like Facebook for prospecting, along with TikTok ads, YouTube, display advertising, and Connected TV (CTV). These efforts are crucial for introducing potential customers to your brand.
As the customer journey progresses, strategies shift towards the mid and bottom funnel. Mid funnel strategies might involve Google ads or other forms of search marketing, which aim to capture the interest of customers who are already aware of the brand and are considering a purchase. Bottom funnel tactics usually involve retargeting through platforms like Facebook or remarketing through branded campaigns on Google to close the conversion.
An essential part of this strategic approach is testing. For example, what happens when you increase your investment in YouTube by $5,000 or $10,000? Alternatively, what are the effects of cutting out branded spending altogether? Can customers be driven to purchase without it? Through such tests, businesses can gauge the real impact of various strategies on the overall funnel.
Navigating the Complexity of Multi-Channel Strategies
Cross-channel marketing is not just about using multiple channels; it's about understanding how these channels interact with each other and influence the customer journey. No single channel functions in isolation. Instead, each one plays a part in a symphony of interactions that guide a customer towards a purchase.
Moreover, every attribution platform splits the conversion value across these interactions differently, which often fails to capture the true dynamics at play. Realizing this, businesses need to look beyond simple attribution models and focus on holistic business metrics that reflect the real impact of their marketing strategies.
In essence, cross-channel marketing for ecommerce involves a continuous process of testing, measuring, and refining. It's about understanding where to allocate resources effectively and how each channel contributes to overall business goals, ensuring that every dollar spent is a step towards greater profitability.
Navigating the world of ecommerce with a cross-channel marketing strategy may seem daunting, but by focusing on clear, actionable metrics and continuously adapting your approach based on real-world data, your business can thrive in the digital age.
