Tor Olav Haugen
Why Affiliate Tracking and Click Attribution Fall Short in Programmatic Advertising
Attribution is a critical factor in the success of digital advertising, especially in programmatic advertising. Advertisers need to understand how to attribute conversions and analyze the customer journey to maximize returns on their investment. However, the traditional methods of attribution, such as affiliate tracking and click attribution, do not work well in programmatic advertising. In this article, we will explain why these methods are not ideal and why a different approach is needed.
The Limitations of Affiliate Tracking
Affiliate tracking is a common method of attribution in affiliate marketing, where it is used to track and attribute conversions to specific affiliates. However, it is not applicable to programmatic advertising. The reason is that programmatic advertising involves multiple vendors and touchpoints in the customer journey. The attribution model that only credits the vendor who initially introduced the customer to the brand, also known as first-touch attribution, can lead to programmatic advertising being undervalued.
For instance, DSPs and programmatic vendors may only receive credit for new client registrations that come through a click. This limited attribution scope means that programmatic advertising is not credited for conversions, leads and sales, which are all attributed to the vendor who brought in the customer in the first place. As a result, retargeting strategies are perceived as having low returns because all subsequent conversions are attributed to the affiliate or vendor who initially introduced the customer.
The Drawbacks of Click Attribution
Click attribution is another traditional method of attribution, where credit is given to the last vendor who served the click before the conversion. However, this method is not ideal in programmatic advertising. Clicks account for only a small portion of the customer journey and have been found to have "nearly zero" correlation with conversions in display advertising.
Moreover, click attribution is based on the assumption that clicks are the primary driver of conversions, which is not always the case. Many customers may be influenced by viewable impressions, and these conversions are not picked up by click attribution. Hence, this narrow attribution model can lead advertisers to focus on clicks, rather than overall business objectives such as increased sales.
The Issue with Google Analytics and View Conversions
Google Analytics (GA) is a widely used analytics tool that is not built to pick up view conversions. Around 85-90% of all programmatic conversions originate from viewable impressions, which are not picked up by GA. This means that advertisers relying solely on GA for attribution are missing out on a significant portion of their conversions.
The Most Reliable Source of Attribution in Programmatic Advertising
In programmatic advertising, the DSP adserving the creative assets is the most reliable source of attribution. Most DSPs are equipped to track conversions across multiple vendors and touchpoints in the customer journey, making them better suited for programmatic advertising than traditional attribution methods.
However, there is still room for improvement in attribution in programmatic advertising. Customer Data Platforms (CDPs) can be used to handle attribution across all online and offline marketing sources as an independent platform. This approach allows advertisers to track and analyze the customer journey more comprehensively and accurately, providing a better understanding of the effectiveness of their programmatic advertising.
Traditional methods of attribution such as affiliate tracking and click attribution fall short in programmatic advertising. They do not account for the complexity of the customer journey and the multiple vendors involved in programmatic advertising. Google Analytics is also not ideal for programmatic advertising as it does not pick up view conversions. The most reliable source of attribution in programmatic advertising is the DSP adserving the creative assets.
However, the use of Customer Data Platforms (CDPs) can further enhance the attribution process by providing an independent platform to handle attribution across all online and offline marketing sources. CDPs collect and unify data from multiple sources, such as CRM, email marketing, and social media, to create a single view of the customer journey. By leveraging this comprehensive data, CDPs can help advertisers identify the most effective touchpoints and optimize their campaigns accordingly.
Despite the benefits of using CDPs, it's important to note that the DSP remains the most reliable source for tracking programmatic conversions. This is because the DSP is directly responsible for serving the creative assets and therefore has the most accurate information on user behavior. However, by using CDPs in conjunction with DSPs, advertisers can gain a more holistic understanding of their customers and better attribute conversions to their programmatic campaigns.
Programmatic advertising has become an essential tool for advertisers looking to reach their target audiences efficiently and effectively. However, proper attribution is crucial for advertisers to accurately measure the impact of their programmatic campaigns and make informed decisions on where to allocate their advertising budgets. While affiliate tracking and click attribution may have their place in other forms of advertising, they are not ideal for programmatic advertising. Instead, advertisers should rely on the DSP as the most reliable source for tracking programmatic conversions and consider using CDPs to further enhance their attribution capabilities.
By doing so, advertisers can maximize their returns on investment and achieve their overall business objectives!
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