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As online advertising consumes a larger share of marketing budgets, measuring its impact correctly becomes more important. Information management professionals will inevitably become involved because they control so much of the data needed to construct sound answers. So, whether you work in IT or marketing, it's worth taking some time to understand the issues.
Fractional attribution. If attribution experts agree on anything, it's their disdain for the most common approach to online marketing measurement. This method, called "last-click attribution," assigns all credit for each sale to the last message received. The obvious problem is that this ignores the impact of all previous messages. One common alternative, assigning all credit to the first message a customer received, has the same flaw. Most discussion among online attribution experts is aimed at finding logical ways to split the credit among all messages.
This often involves assigning weights to messages based on their type (a display ad is assumed to have less impact than an email), when they were received relative to a purchase (later messages get higher weight than earlier messages), or simply by assigning an equal weight to each message. Weights can also be based on more elaborate statistical methods, but this requires structured tests that few marketers actually conduct. Regardless of how the revenue is allocated, the portion attributed to each message can be compared with the cost of the message to calculate a return on investment.
Incremental attribution. While fractional attribution methods often feel arbitrary, most marketers can find a rule they feel gives...