Susan Bratton: Adam Boettiger, the internet advertising thought leader and digital strategist, runs the i-Advertising mail list and is lead Digital Strategist for the Jenny Craig brand at The New Group, a digital agency in Portland, Oregon. Adam started The Daily Follow, an ezine that spotlights follow-worthy people on Twitter and social media.

Adam’s question is “how should companies manage promotional attribution?”  Can you calculate how much each promotional effort contributed to a sale and how much credit do you give an ad a search term, a landing page, how are you seeing people work this out?  Explain this promotional attribution.

Jim Sterne: So, imagine a conference room and the chief marketing officer is figuring out his budget and there is the head of e-mail and there is the head of display and there is the head of search and they are all saying, “Oh, give me more money.  No, give me more money.”  So, how do I invest?  So, somebody buys something, I’m going to try to go back and look through the data to see how they found us and what finally convinced them to buy.  Okay now, it gets tricky.

Susan Bratton: Right, it’s all dovetailed. It’s nesting like little Russian dolls.

Jim Sterne: Yes. Would you, if you clicked on this and this and this, would you still have bought if you had not seen the poster on the side of the bus?

Susan Bratton: Media mix modeling.

Jim Sterne: That’s exactly what it is. But it’s trickier now because we have too much data. So, there are several ways people are going about doing it.  One is just spread it evenly.  Everybody gets credit because it’s just too hard, I can’t think about it. The other is the last click gets all the credit. Whatever you clicked on from which you actually purchased, that’s the one that puts you over the edge.

Jim Sterne: Other say, well, wait a minute.  The very first click is the most important because that’s what brought you to us in the first place. So, you wouldn’t have purchased at all if you hadn’t shown up once.

Jim Sterne: Some try to wait it by time so, if you’ve been coming back to the website for months and months and months, six months ago, it might have been the first click but it was so long ago, we’re just going to give it a penny out of the dollar.  And your visit last week will get 50 cents out of the dollar.  Others waited well by budget.  We have this much, you know, that boils down to really the two things that really it works on, religion and politics.

Susan Bratton: What do you mean?

Jim Sterne: This is how money gets allocated. Either it’s religion, your CMO got to be CMO because 15 years ago, he was good at buying television.  So, television gets all the money because that’s what he knows.  Or she was really a brilliant search marketing person and that’s everything – it’s the hammer and everything looks like a nail.

So that’s the religion.  I think this is the best thing so it’s going to get all the money.  The next one is politics.  The search guy is going to get more money because he has known the CMO longer or has more power or —

Susan Bratton: Yes, you were going to do – take the web analytics personnel to lunch a lot —

Jim Sterne: Yes.

Susan Bratton: — if you’re the search person.

Jim Sterne: Hello.

Susan Bratton: And you want the attribution — That’s the politics.

Jim Sterne: You know its religion if they say, “You know, I’ve always done it this way and it has worked for me” and you know its politics when they say, “Gees, we just don’t have enough resources and this seems like the best way to”.

Jim Sterne: Its real life, sorry.

Susan Bratton: I like the last click one the best.  If I were going to do it, I think I would just choose that.  It seems like a straightforward way to do it.

Jim Sterne: I would argue with you.

Susan Bratton: You would argue with me? Because you made a decision to buy two clicks ago. And then, you came back because you had another question.  So, how did you find this?  Oh, I remember I searched on this. And I click through.  Okay.  So, there is another three cents that got paid to bring you back.  You answered your question, then you talked to your husband, then you came back and made the purchase finally.  Well, it was actually three clicks ago where the decision was made.

Jim Sterne: So, this is a really almost unanswerable question.

Susan Bratton: Well, I have another unanswerable question for you.

Jim Sterne: Oh good, I love them.

Susan Bratton: Another one from Adam Boettiger.  Just because we can measure something technically, should we, isn’t it true that some things are just a given?  What’s the ROI of putting on your pants in the morning?  Now Jim, Adam is after my own heart.  I have always wanted to know what the ROI is if you’re putting on your pants in the morning.

Jim Sterne: It’s called risk avoidance. One is not getting arrested for indecent exposure and the other is not catching a cold.  So, I want to measure stuff because I want to make sure I’m not wasting my money.

Is there an investment that you can make that is beyond the level of return?  Absolutely, you can spend too much money measuring stuff, guaranteed.  Are there things that are given?  Well, it depends what is your business model, what are you selling, to whom, etc.

Susan Bratton: I bet you could get a lot of these answers on the web analytics forums too, it strikes me?

Jim Sterne: Yes, but the great thing about a forum is you’ll get a different answer each week. It’s a discussion.

Listen to the whole interview with Jim Sterne here:

Jim Sterne on eMetrics, Must-Have KPI’s and Cocktail Parties of the Future