When do marketers start investing in marketing attribution?
This is a question I’m curious of because at a certain point, marketing attribution transforms from nice-to-have to need-to-have. At a certain stage, marketers decide they need to observe the connection between marketing and sales.
They want to learn what marketing spend is having the biggest impact on the bottom line. But when do marketers begin solving this problem and implementing marketing attribution?
In this post, we explore the factors that may influence when the light bulb goes off and companies decide to implement marketing attribution models.
We explore whether there is a certain spending level, and number of marketing channels being invested in, where marketing attribution is more likely to be implemented.
This analysis helps marketers decide when it’s the right time to implement attribution.
When is the right time? It’s complicated. But let’s look at the data.
Which Companies Are Using Marketing Attribution?
Let’s examine spending data and company size for those companies using marketing attribution. This data is from our State of Pipeline Marketing report, a survey of approximately 370 marketers, mostly in B2B.
We can see that marketing attribution is used by marketers from companies large and small. From spending $25K a year all the way to $5 million, marketers from these companies implement some kind of attribution model.
We can see there is a drop off in the number of companies using attribution when spending gets as high as $5 million a year. Does this mean these companies are not using marketing attribution? Click charts to enlarge.
We don’t think so. When looking at the aggregate total, very few of our surveyed marketers come from companies spending that much a year. Simply put, this a reflection of our sampling method.
So Where Does All This Marketing Spend Go?
We asked marketers to list all the activities they are engaged in, and many of these “activities” are what we define as a marketing channel. Marketing activities include email marketing, SEO, paid search, paid social, content marketing, retargeting, conferences and tradeshows -- we basically asked them to list everything they are doing.
Is there a certain point where you are investing in so many channels that you decide to use omni-channel attribution? In other words, at what point does it make sense to connect online and offline data to measure all of marketing’s effectiveness?
We added up the total number of channels/activities each surveyed marketer is investing in and then compared it to the attribution model they are using.
We compare the average number of channel/activities by attribution model to understand whether more channels means use of a more sophisticated attribution model.
We can see attribution models getting more sophisticated as marketing activities increase. This may be explained by the complexity of managing marketing when marketers begin investing in more activities and channels.
It appears that around 8 channels or activities marketers begin implementing an attribution model.
Doing more in marketing produces more data and more complexity, making it difficult to generate accurate reports across platforms, and compare performance across channels.
There still remains more research to be done. One factor that may be influencing these averages is the fact that the marketers we sampled were more likely to be using a single touch model. For instance, a large portion of our survey respondents are using either a first, lead creation, or last (opportunity created) touch.
There are less people using a multi-touch attribution model, which includes W-shaped attribution, and this is because it is newly available to marketers. Thus, these averages are from groups of varying sizes, which makes comparability difficult.
[Update] We later compared companies' lead volume to current attribution model and it appears there may be a connection between number of leads and the need to track them via advanced attribution models.
Is There A Connection Between Sales Cycle Length And Marketing Attribution Model?
One of the biggest reasons marketing attribution models are so important for marketers in B2B, is the complex and lengthy sales cycle. The following chart shows the proportion of marketers at companies with sales cycles ranging from less than 9 days to 60-plus days. It also shows the proportion of attribution models being used.
We can see that despite the different sales cycles, with 60+ days being the most common, the proportions of attribution models used vary in similar ways. For example, many marketers are either not using attribution or using single-touch.
This data tells us that the connection between sales cycle length and attribution models is not readily visible in the descriptive statistics. However, more advanced analysis may find otherwise.
What I found really interesting about this data is that it creates food for thought.
The right time to implement attribution may be less dependent on company demographics and more dependent on what marketers strive to achieve.
Yes, there are some visible connections between spend, activities, and size, but a bigger driving force is whether marketers are focusing on revenue accountability, taking full advantage of technology that makes it possible to connect every marketing touchpoint to revenue.
Deciding when to implement an advanced attribution model comes down to more than what we’ve covered here. But we’ve started with good questions.
- How many channels or activities does marketing engage with, and how does this add complexity to my current attribution model or method?
- How much a year are we spending and is it time to start connecting this to sales data?
- What’s our sales cycle length, are we not getting the full picture of the customer journey?
The data does not provide the last word on deciding when you should implement attribution. But it does provide a broad framework to research how well your current attribution solution fits the needs of your team.