Mike Blumenthal, Mary Bowling & Ed Reese take a Deep Dive into the topic of attribution.
This is our Deep Dive Into Local from August 8th, 2017. In our Deep Dive series, we take a closer look at one thing in local that caught our attention and deserves a longer discussion.
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Mike: Hi, welcome to Deep Dive Into Local. This week we have a special guest, Ed Reese. And we’re going to be discussing attribution, final attribution, and hopefully how it relates to local — but in general, the difficulties that businesses have in knowing where, when, and how a client made both the journey and the decision to make that final purchase. So I’ll turn it over to you, Ed. Kick it off.
Ed: Yes, so this is a tough deal and it’s been one of the things that we’ve really been trying to do a better job of, especially the last couple of months, because it keeps coming up over and over again. So, what I see, and we talked about it prior to our call today, it sounds like we’re all having problems with it.
What’s really causing the sale? And we’re still living in a last-click world, and there are a lot of reasons for that. It’s what people know, it’s easier to track, and in a lot of cases it’s how agencies and people in the past, they’ve just always done it that way.
Mike: Well, there’s also something very visceral and valuable about a phone call that you know you triggered. Both the business hears it and you know that you were the cause. And there’s something to be said for that degree of action, right? I mean, when you get further away from the phone call, some of this stuff gets pretty loosey-goosey, right? I mean, the phone call’s almost a cha-ching, not quite but it’s close, right?
Ed: It’s super close to the cha-ching but let’s look at an example. So let’s say I’m buying a new truck, okay? I’ve got a ’92 Ford, it could fall apart any day now, right?
Mike: Okay, that part I believe.
Ed: Yes. It’s only 25 years old. Let’s say it doesn’t make it to 26, okay? So I would need to have some level of awareness of the type of truck that I would want. I’m going to find that from advertising, referrals, this whole messy system. Like it is messy, it is convoluted. At some point, I’m probably going to pick up the phone or walk onto a truck lot and figure out where to go. There’s all sorts of influencers before that last deal.
And it’s just really tough to do. And I think part of the problem is that because it’s so tough to educate, I think we’re letting people be essentially blind to how the world works. You know, there’s…. go ahead.
Mike: Well, I was going to say, you know, in the traditional funnel of awareness, consideration, and conversion, right, awareness — most small businesses, I having been one for many years, allocate the awareness issue to the manufacturer of the product, right?
I mean, when you’re selling Apple, really you don’t wanna be at the top of that funnel necessarily. You might play there a little bit but it’s hard, expensive, it’s complicated, you don’t have the resources for the writing or the photography. So you typically, at least in the local market, are waiting for what falls your way after they’ve done the awareness and perhaps even the consideration part, right?
Ed: But it depends on the industry.
Mike: It does depend on the industry.
Ed: Let’s look at that example, right? So like in the car industry, they call those the doughnut ads. You have the doughnut, which is, “Hey, here’s this professionally produced ad of the new Ford F150,” or whatever. And the last five seconds you get to tag it with, “Big Ed’s Trucks in Spokane, Washington at 27 Main,” right?
And then you just put in your thing at the end and you take advantage of all this awesome, glossy photography. But most businesses have to do both. Like most of my clients, I’ve got a couple that are national like the truck example, but most of mine are regional. So if you’re a regional to local company, I mean, let’s say you’re a hotel or you’re anything that doesn’t have a national presence, well, your money’s even more guarded and, you know, valuable. How are you going to split that up if you have to make people aware that your little niche hotel exists and that it’s nice and that people should consider it and it’s a good deal and then the phone call, right?
So, you know, we’re booking a trip right now. Our vacation is next week so we’re looking between here and the Washington/Oregon coast. It’s fascinating how I’m doing that search. And part of it is awareness and part of it’s just specifics on price. So how do you…you know, like in my example, I’m reading articles about cool hotels in Washington and Oregon in little niche places to stay. I’m also literally going on Google Maps and I’m just typing hotels and I’m looking at the road and I’m clicking on the places that have a price that might be a good fit.
So there’s local search, there’s also the hotels that I’m finding from a PR and from, you know, some sort of influence, whether it’s in the news or a newspaper or a blog or whatever. What’s really causing me to book the hotel I did in Yakima, Washington on the way back?
Mike: Right, but I doubt it’s a doughnut ad, though, right? In other words, one of the things we’re seeing is just the lack of interest in responding to ads and the difficulty of getting people to respond to ads. That most people, at least in the research I’m doing, they don’t trust ads and they would rather read a review. They would rather read some sort of newspaper article or some sort of post or educational thing, particularly crowdsourced stuff, right?
So Google becomes particularly relevant in consideration in terms of where is this place and is it physically related and what are people saying about this place? So Google’s playing a huge role there, maybe even larger than Facebook. Although, some of that’s happening on Facebook and Trip Advisor and Yelp as well, right?
Ed: But yea, from like…oh, go ahead, Mary. Go ahead.
Mary: So, I wanna bring a different perspective to this. Because a lot of small businesses, they are not willing to invest and they’re not even interested in knowing where every single lead came from and what caused it. If their phone is ringing, they’re happy. If their phone is not ringing, they’re not happy. And they really don’t care where that came from. And most of them have a set budget that they can devote and that’s what they’re going to devote and the marketer has to decide how to best spend that money to get that phone ringing.
Mike: Right, but if they’re not sharing with you or you don’t have any control over what their YP spend is, or what their billboard spend is, or what their TV spend is, you know, then you’re in trouble…or radio ad spend…because all of a sudden 80% of their budget’s going and it may or may not be generating calls.
Mary: Very true. But I had a…let me just tell you, I mean, this is a true story. I had a very prominent divorce lawyer in a southern city who…I don’t know why he came to me because he already ranked very well for “divorce (city)” in everything he did. And he told me he didn’t care and he wasn’t going to devote any money to setting up analytics so that he can tell anything more than he could already tell. And I don’t think this is that uncommon. He was just very adamant about it. I think a lot of them feel that way. It’s like, “Why should I pay you thousands of dollars to track something that makes you look good?”
Ed: So I agree. I think that is most small business owners. What’s fascinating is seeing what happens when that isn’t the case. So we have a client, they do invoice factoring. It’s like large, quick loans for manufacturing. If you need like $5 million a month to fill the order that you gotta do or whatever.
So the cost per click ranges from $60 to $80 per click in this space. So it’s a very competitive space. And we’re tracking cost per lead. So their cost per lead usually is around $1,800 per lead, the cost per lead, and it takes roughly 20 leads to get through to get one good one, right? So it’s a very expensive business.
What we decided to do was do pre-roll ads on YouTube for awareness and education, and we were getting those at around 11 cents per view. And we noticed over time, when we isolated that, that brought their cost per lead down to about $14.50 per lead. So whatever that is, $300 per lead less expensive.
And we didn’t have the UTM proof because it was just too mushy and all that. But we saw that when we made that one change we saw a $350 drop in cost per lead because of the awareness and education. So I think you’re right. As a marketer, to be able to have that gear to shuffle and change as you see fit and then track the success, awesome. But it’s tough because most clients don’t know and most marketers aren’t going there either. So it’s kind of a, “What do you do in this space?” kinda question.
Mike: Right. So, you know, this question came up with Barbara Oliver, which is my pet client, so I don’t charge her so she doesn’t really cover the actual cost. But I was sure to implement UTM codes for her. And I implemented, well, events before it was part of the tag manager but tag managers so that we could track some of this stuff. And then, I convinced her, after she got to three employees, that one quarter a year they should track all sources at the counter of all new business, and they agreed. They agreed that post-sale they would interview briefly every client.
So this was a way for them to understand in a broad sense their whole marketing picture without me being intervened. Well, without me having to say, “Oh, here’s your stats.” Well, like I was showing 350 conversions. She got 140 new sales of which 80 were from digital, clearly.
And so that practice on her end, Mary, and I think this is what you recommend. You say, “Look, you’re not trying to make me look better, you’re trying to help you spend your money wisely.” And if you’re getting a good response on radio or YP, whatever, and what she learned was YPs, they did get some response. It was mostly over-65-year-old bitties who wanted a $10 repair, right? Well, okay, that wasn’t what they were looking for.
And the radio, which was $10 grand, very expensive but it generated $30 grand in direct business because it was mostly men buying expensive gifts for their wives at the last minute. So they were able to ascertain that. And then they came back to me and said, “You know, we’re spending $300, $400 a month on social/SEO, is it worth it?”
And that’s a digital attribution question, and I went back and, some of it we couldn’t track pre and post because they built in a website in the middle of that. But it was pretty clear, when we looked, that there was some real significant benefits, again, a little further up the funnel.
And it’s hard in a really small business like that to really get down to where did that actual…I mean, it’s hard to know across platform because it’s hard to even know attribution at all, but we were able to get some attribution.
Mary: And attribution has become so complex that it’s really hard for the client to even wrap their head around it anymore.
Mike: And David has often said that, you know, most small businesses like you say, Mary, aren’t willing to pay for the information. My sense is, if you can deliver low funnel data in a really clear, concise way that they may not be willing to pay for it, but they would be willing to read it, which I think is part of the issue, right?
Mike: And if you can get them to read it and it’s meaningful, like how many calls came through these channels, right? How many driving directions came through these channels? And is it worth shifting between them, right? So I think there is, at least at the very small level, not bigger levels, they have bigger questions. But, very few people in the local space, outside of car dealers who have been tracking cost per lead for a long time, very few people are actually doing that math, right?
Ed: Yep. Yes, so I guess we conclude with, “Attribution is hard.” It’s hard.
Mary: Attribution is hard.
Mike: An example of attribution being hard, right, I decided to use campaign codes for them, particularly vis-a-vis Google where clearly 85% of their business was coming out of Google. We wanted to ascertain whether it was the service menu on Google or the regular website on Google local or whether it was organic. And using one of the data distribution services, they managed to periodically overwrite the UTM code at Google. So it was hard. Because even when you do do it, there’s other moving parts in the ecosystem that are going to goof you up, right?
Why shouldn’t Moz or Neptune or Bright Local or White Spark support — I mean White Spark probably does, but you’d have to make a special ask, you know — to use UTM code so at least you know last point of attribution source, right? But even then, when I was trying to do the best for them, it got overwritten.
So the question I have is, if you can’t even get the basics of tag manager and UTM codes implemented, how do you move on to cross-platform attribution? What’s the next…let’s assume I could get it stabilized and get a good view, how do I then look further up the funnel to understand which activities up the funnel were really meaningful? I’m asking. That’s a question, not rhetorical.
Ed: No, no, no, but the question, that goes back to what we talked on the general video earlier — it has to be defined. So if we don’t have the right assumptions on what’s actually making that impact, it’s not going to matter anyway. So what we see when things are set up from a funnel standpoint of what is the defined awareness, well, those are all based on assumptions. So, how do you test those assumptions? And in my opinion, it’s less about the tool and more about taking the time to go through and do isolated experiments to see if you did anything.
Like you asking Barbara Oliver to ask customers once a quarter or one quarter a year or whatever it is, us doing that isolated experiment for YouTube pre-roll for the financial client. And that takes a lot of time because then you’re looking at every step of that funnel doing some sort of independent test, isolated test to then get the baseline, to then get the funnel, so that then you could set up the stuff and the things to try to measure it, right? So it’s a lot of work.
Mike: Right, it is a lot of work. And it’s hard to understand. Like in Mary’s case, I think a lot of people are not willing to pay for it. I think there’s an opportunity there. I mean, again, I don’t know. I think Google is missing an opportunity. For example, why doesn’t their analytics read insights and have a dashboard report that’s clear and simple within analytics that reflects insights, right?
I mean, how can you explain that huge missing piece there? Because Google Insights tracks very low, final things are valuable to businesses: calls, driving directions, photo views, which…it’s hard to understand even with photo views, though. What is the value of a photo view on Google? How do you track….? And again, not a rhetorical question, how do you convert the value of a photo view on Google to a meaningful attribution at the store level, right?
Ed: See, that would depend because you could do that in certain industries. So jewelry, that could make sense. Hotel, that could make sense.
Mike: Right. Oh, I get it, it makes sense. The question is, how do you know though anything? If Google says, “Oh, your pictures were viewed 10,000 times last month and it was eight times more than the nearest competitor,” what does that mean? And how do you then ascribe some value to it, right? I mean, maybe you say, “Okay, for every 5,000 photo views, we’re seeing 500 phone calls at Google or something.” Maybe that’s how you do it.
Mary: But they may not have any relationship to each other.
Mike: Well, a funnel is, like Ed said, a funnel is based on assumptions. And if like in the jewelry industry, one assumes that all those views are valuable, the question is, what is the value and what happens next? And Google doesn’t provide us with any insight as to the behaviors — really what we need to know is how many people clicked on the photos and then went back and did something else that was significant, right?
Ed: In closing, I can say that we did a blog post like three or four years ago on networks and like a circle of trust and kind of explained the circle of trust comment. And Tine did the drawing and her circle of trust basically it looked kinda like this. It was basically just a circle with a dot in it. It kinda looked like a breast a little bit. It wasn’t intentional, it just kinda looked that way. She drew it in like four seconds. If you do an image search for circle of trust, it’s the number one image on the internet and has been for years. I’m pretty sure the circle of trust image has not helped our agency, right, even to the tens of thousands of views that people see our circle of trust.
Mike: You think rather than reflecting Tine’s incredible skills, it reflects sort of a Freudian slip that she wasn’t even aware she was making?
Ed: Potentially, I don’t know. Well, I think that pretty much sums it up for the day.
Mike: All right. That’s a great way to end, I think. I don’t know, we’ll see, we’ll see. All right, thanks for joining us for Deep Dive. We’ll talk to you soon, bye bye.
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