SAN DIEGO, June 16, 2010 — In a thought-provoking report, Craig Macdonald, CMO and senior vice president for product management at Covario, Inc., a leader in media analysis software solutions and in paid and organic search agency services for Forbes Global 2000 companies, presents an in-depth POV (point of view) on “attribution modeling,” which is one of the latest buzz phrases in the advertising and marketing space.

Over the last six months, Macdonald says attribution modeling has been the rallying cry among advertisers (and their CFOs) when their media spending is not delivering the expected results.  The marketing executive goes on to ask just what question should attribution modeling be trying to answer.  Among the choices:  How to optimize marketing?  And how to give appropriate credit for various media channels in the marketing mix?

Macdonald believes attribution modeling has different meanings, depending on who is discussing the issue and the specific problems marketers (and their vendors) are having.  He said it can refer to a web analytics process, a testing methodology, or to an econometrics problem.

“At best, attribution modeling is a ‘weigh station’ on the road to the ultimate question of where an advertiser should spend its money,” Macdonald said.

In the report, Macdonald presents different approaches to attribution modeling and offers three insights.

First, the concept of attribution modeling is a red herring being “peddled” to solve the problem of allocating credit to various media touch points. Macdonald believes the approaches typically espoused by vendors (agencies and technology firms) are difficult to implement, do not scale, and have high implementation costs.

Second, a traditional attribution modeling approach commonly known as media mix modeling — despite certain limitations — is best suited for helping advertisers determine how their budgets should be invested to maximize returns.

Third, the largest barrier to executing media mix modeling is the data warehousing cost of integrating data. Macdonald said this is a problem being addressed by the Covario Cross Media Optimization platform.  The company’s CMO Dashboard offers marketers a complete view of paid media (display ads and paid search) and earned media (organic search/SEO and social media buzz).  And soon it will be built out to include off-line broadcast, print and outdoor media, as well.

Macdonald said the CMO Dashboard will help marketers determine when to reallocate media budgets, where to make adjustments to generate more sales leads, how different elements of the media mix are impacted each other, and how different geographic regions are reacting.

The complete report on attribution modeling is available as a downloadable pdf file. There is also more information available about the Covario CMO Dashboard.

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