How you can identify the most influential media channels using models
Haven’t you always wondered what motivates your customers to learn more about your products, place an order and ultimately purchase something?
The key question for marketing experts is: which online and offline channels have what kind of influence on sales? Or, to put it differently: How can the budget be allocated over the individual channels in an optimal way?
To answer these questions, pilot has developed the multi-stage AIDA analysis, which models four effect stages during the customer journey and reveals how the media channels utilised actually work. Enjoy the read.
‘Those who go on a journey also have a story to tell.’ This is also true for the customer journey through the digital world. However, observations of the customer journey are mainly reduced to the basic, technical measurement of contacts on an individual basis and the imposition of standardised attribution models.
But analyses along the lines of ‘contact took place – contact did not take place’ are far too simplistic. They fail to consider key information regarding whether contact was even necessary. In reality, it’s important to identify the touch points within the consumer’s customer journey that actually lead towards achieving the marketing aim pursued.
Standardised customer journey analyses generally only account for the contacts established, and thereby examine which channels were involved at the end of the sale. This doesn’t provide any statistical basis regarding whether the channels influence sales directly as the closing channel or indirectly as the initiating or converting channel.
Besides, only information on purely digital and singular customer journey analyses is gathered, and even this offers no statistical relevance for a subsequent budget allocation.
Standard Customer Journey Concepts
- U-model/bath tub model: The first and last contacts in a customer journey are given greater attribution than the contacts in the middle. This means adjoining and final channels are assigned greater importance, which creates a U in the visual view of the weighting.
- Geometric model: The contacts in a customer journey gain higher weighting the closer these are to the sale. The adjoining channels are thus assigned lower importance.
- Equally distributed attribution: Each touchpoint in the customer journey is incorporated into attribution with equal importance.
- First or last cookie attribution: The entire sale is attributed to the first or last contact in a customer journey. All other channels involved are not taken into account in attribution.
It‘s better to take this journey with AIDA
That’s why pilot has developed a multi-stage modelling concept for an extensive analysis of the customer journey. This isn’t restricted to just digital media, either; it also covers offline channels. Moreover, analogous to the AIDA marketing approach, the customer journey is divided into four communication-relevant phases: attention, interest, desire and action (cf. fig. 1).
Each stage is modelled separately and operationalised using four target figures. This occurs on an individual basis in close consultation with the client.
This way, all the channels that drive the build-up towards the sale are taken into consideration.
Four model phases
In the attention phase, it’s assumed that all the media channels utilised within a campaign generally work towards grabbing the consumer’s attention. This phase therefore does not usually need to be modelled in the pilot customer journey concept. If time series are available with brand and advertising awareness values, then the attention phase can, of course, also be included in the model.
The interest phase shows which media channels manage to arouse the interest of the consumer. This phase can be equated with SEA brand search queries, for instance. The AIDA modelling concept then examines which media channels contribute towards consumers searching for the advertiser’s brand in online search engines (cf. fig. 2).
The next stage, desire, identifies the media channels which drive the consumer to consider the product more closely. For the model, this is assessed on the basis of page views on a customer website or on individual product landing pages, for example.
The last stage, action, is concerned with the actual sale. This is very similar to a classic sales model, which conventionally investigates the statistical influences on absolute sales.
Customer Journey Terms
- Customer Journey: ‘Journey’ of a potential customer via diverse contact points with a product or a brand until a desired action, generally the act of purchasing, takes place.
- Touchpoint: Any kind of contact point: from classic advertising (TV/radio ad, advertisements, etc.) via online marketing measures through to information on rating portals or opinions of friends.
- Adjoining/converting channels: Certain media channels or touchpoints are important for triggering a customer journey in the first place. Or to make crucial preparations for the target action as converting touchpoints.
- Final channels: Which user contacts were responsible for conversion at the end of the customer journey (‘last cookie wins’)? An exclusive view of these touchpoints leads to an inaccurate analysis.
Absolute vs. relative importance
However, with the pilot AIDA customer journey model, we go one step further: for each stage, we also indicate the relative importance of the media channels alongside the absolute values. This examines how the media channels influence each other and what relevance the individual channels ultimately have for possible budget adjustments.
This means that a channel may well have a great influence on a target figure from an absolute standpoint, but the relative importance of this channel can, nonetheless, vary substantially (cf. info box and fig. 3).
Absolute vs. relative influence
- Absolute channel importance: Indicates the statistical influence in the past and to what extent this channel has influenced the customer journey phase under analysis.
- Relative channel importance: Shows the significance of a channel for the customer journey: the higher this importance is, the more important the channel is for budget allocation.
- In contrast to absolute importance, relative importance does not depend on the various units that are included in the model (TV GRP vs. ad impression vs. OoH GRP). In the case of relative importance, the unit-independent influence of a media channel is calculated, taking all other channels into consideration.
- Only once the channel’s relative importance is known is it possible to allocate future budgets properly.
A practical example
Using the pilot AIDA modelling concept for a service provider, pilot successfully identified the functioning of the media channels utilised within the respective customer journey phases and analysed their influence on sales.
The following channels were involved: Display Branding, Display Performance, Retargeting, SEA Brand, SEA Generic, Out of Home, Print (daily newspapers), Newsletter. The important findings of this case study included (fig. 4):
Interest: In comparison with the following phases, SEA generic was shown to be an important driver here in successfully making consumers aware of the brand. This media channel is essential for initiating the customer’s decision process.
Desire: The channel display performance (9%) played a significantly lesser role in the desire to buy among consumers than in the actual sales phase (22%).
Action: The channels OoH, SEA generic, SEA brand, display performance, display branding and retargeting had a strong influence on customer sales, whereas print and newsletters were shown to be ineffective.
The following conclusions could be drawn for budget allocation
SEA generic is indispensable; without it, no product or brand interest would be generated. The consequence of neglecting it would be a substantial collapse in visitor numbers on the customer website (desire) and, ultimately, reduced sales (action).
As the print channel fails to demonstrate a statistical influence in any phase, the budget assigned to it should be reallocated to more influential media channels.
OoH offers optimisation potential: although an influence could be seen in each AIDA phase analysed, there was a significant difference between relative and absolute importance for this channel.
With regard to absolute influence, OoH performed satisfactorily. However, the relative influence was much lower in all phases. The budget for this media channel should be reduced; this is also in light of its high costs (cf. fig. 4, budget split).
The informational value of an exclusively technical customer journey measurement is often low. By analysing contact chains, valuable information can be obtained such as the average length of contact and the duration of a customer journey. However, the question regarding which contacts are actually necessary for a purchase decision remains unclear.
This can only be answered satisfactorily using models. By complementing standard customer journey measurements with a statistical evaluation of channel importance, it’s possible to get a more meaningful picture that can be used as a basis for budget allocation.
Customer Journey Concepts
- Customer Journey BASIC: Comprehensive identification of online contact chains and functional clarification.
- Customer Journey ADVANCED: Expansion of the analysis to selected offline channels, e.g. TV.
- Customer Journey AIDA MODELLING: Calculation of the utilised channels’ statistical influence on each of the phases within a customer journey.