What is a conversion attribution model in online advertising?
Online advertising conversion attribution refers to the mechanism through which an advertiser allocates the bounty it is ready to pay for a single conversion (purchase, signup, etc.) across the online events that made that final conversion possible. Events can be display and search impressions, display and search clicks, and sometimes intermediate pre-conversion (but post-click) actions.
The method of attribution most commonly used is that of a last event before the conversion, where that single event gets 100% of the bounty. This has two consequences which are the crux of the attribution issue in the online advertising industry. They relate to the type of last event:
Click: Search is given disproportionately more attribution than display. Display is a top of funnel advertising medium (branding, awareness) whereas search is bottom (intent, purchase). Meaning, a good portion of the time (enough to cause this issue) an end user sees an ad, creating an awareness in her about a product, but then continues with her surfing behavior, only to come back hours later to be interested in going to that advertiser’s site.
With no means to get back to the ephemeral display ad that generated that interest, the user searches for that particular product on a search engine, clicks on a sponsored link and converts at the advertiser. In this likely scenario, and with 100% attribution to last event, the search provider gets all the bounty at the expense of the display impression that generated the awareness, and drove the end user to action. Issue isn’t only that display folks get totally ruffled and irritated by this (all the work, and no pay), but also that the advertiser’s marketing spend becomes misaligned with reality over time as it gets allocated more to search (the wrong channel).
Impression: Publishers with large supply of pretty inexpensive display impressions (think ads on instant message windows, photo pages, and email readers), resort to cookie stuffing – the practice of carpet-bombing (meaning showing impressions) their internet population on a daily basis with the same offer without even expecting a click. This is beneficial to publishers because some end users invariably end up at the advertiser without having clicked either on the publisher’s display ad nor on a sponsored listing at a search engine. In this scenario, the publisher which showed the last impression (dropped the last cookie/bomb) wins the bounty.
This repetitious advertising is as much annoying to end users, as it is to the legit publisher whose infrequent but premium placement of this same ad does not have a chance of getting any attribution.
A more thoughtful attribution scheme, albeit one requiring the implementation of a complex algorithm on a custom ad server or needing to use a 3rd party ad server that has built in attribution levers, would solve both issues, and clean up at least this part of the online advertising world. It would involve spreading the single bounty across multiple publishers (events) each in accordance to its contribution to the final conversion.
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