Last year, digital ad spend exceeded the £10bn threshold following the highest annual growth rate that it has seen in 9 years (+17% YoY). This equates to an £8bn increase over the last 10 years. Almost half (48%) of UK internet time is now spent on smartphones and as a result, mobile ad spend now accounts for 38% of all digital ad spend. Five years ago this was only 4%. With mobile usage continually on the increase, user journeys are becoming even more complex.
So we’re spending more on ads, but with journey’s becoming increasingly fragmented are we spending wisely? The truth is, with the current favourite attribution model (last-click) we’ll never know. Last-click isn’t terrible. It’s the backbone of our success to date; but while it has gotten us very far, it is not the full picture. As entertaining as it is to watch Messi slot one in the back of the net, would he be doing it as often if he didn’t have the skills of his Barcelona teammates behind him?
Despite the fact that last-click attribution is straightforward and tangible, it isn’t perfect. In fact, with the complexity of the marketing landscape escalating, it’s becoming even less perfect. So what are the other options? First-click; linear; position-based; time decay; or even data-driven? In truth, no attribution model is perfect and that actually makes it less intimidating. Attribution isn’t an equation to be solved (there is no such solution), it’s a strategic choice about what to value. Therefore, choosing your attribution model should depend on what your objectives are and what story you want to be telling. Every model has its pros and cons and we’ve put these below, beginning with the models that favour tangibility (and therefore easiest to call efficient) and ending with the models most suited for growth (increasing audience and ultimately revenue over the long term).
The reality is that last-click is becoming harmful to marketing strategies. We’ve established that digital ad spend has increased massively over the last 10 years and – alongside the increase in online usage – the shift in the marketing landscape is a significant factor here. As a result, last-click no longer serves its purpose and is detrimental to growth. It is increasingly beginning to show every marketers growing complaint “we’re spending more to get less”. Over time, this complaint is only going to exacerbate with last-click attribution. Since we’re all spending more on digital advertising, it is now even more crucial to re-think our attribution strategies to ensure the money is spent wisely.
To summarise, last-click has played a central role in bringing digital advertising to where it is today. If we’d never produced the results it’s painted, we’d never have justified the £8bn increase in ad spend over the last 10 years. Yes, it is still a valid attribution model, but try a better one. Messi might have lifted the Champions League trophy 4 times, but would he have lifted it all those times without Barcelona behind him?
By Luke McGregor, PPC Team Leader.