Who invented the last click attribution horror? Google drops the metric; How the IAB set up the heist, and lazy marketers, hungry holdcos kept it rolling
Google is walking away from last click attribution – a false proxy and a "mistake" the marketing and ad world's smartest piled into for nearly two decades. Some blame Google for popularising the concept in the first place and hoovering up ad budgets for the last 15 years as a result. How did it start? Early legitimacy from the IAB and former Google CEO Eric Schmidt’s eye for the value in analytics, say those in the know – and lazy marketers and ticket-clipping agencies kept the money rolling in.
What you need to know:
- Google says last click attribution is going to become less useful for marketers, arguing "data-driven attribution" will become Google Ads' new default for conversions. From early October and into the new year, Google Ads will ensure all accounts use its new model by default.
- Last click became a currency of the internet due to laziness, and it was a mistake to give it credibility, says former IAB CEO and President, Greg Stuart.
- Last click was forged by the global industry in the early 2000s, but became a major force after Google acquired Urchin, an early web analytics platform that later became Google Analytics.
- There’s value to last click, reckons Mutiny’s Henry Innis, as it shows a small part of the customer journey. But it has wrongly dictated budgets.
- Cost per click as a product was a “sleight of hand” by big agencies, that has cost marketers millions, per Mindbox’s Nic Halley.
At the time, we were writing the impression guidelines. We needed to write the click-through guidelines too, because click-through had become a bit of a quasi-secondary currency, and I think it became a currency because agencies are lazy. That's what I think happened.
Google will no longer use last click attribution as its default conversion metric in Google Ads, saying it will "increasingly fall short of advertisers' needs" in a changing privacy landscape.
In a blog post written by a senior Google Ads executive, the company argues its machine learning-based "data-driven attribution" model is better because it takes more signals into account, including the ad format, the time between interacting with ads, and the conversion itself.
But many lay the blame for last click attribution squarely at Google's door – though the IAB is equally guilty.
‘What the hell are we doing with it?’
There is no relationship between click through rates and sales, and it was a “big mistake” to write click measurement rules in the early days of the internet, the former president of the Interactive Advertising Bureau says.
Last click attribution, digital experts say, was pioneered by the broader industry, popularised by Google, and continued by lazy marketers and agencies.
In 2004, Greg Stuart, then the CEO and President of the IAB, called the CEOs controlling major ad serving technology around the world.
“I said, ‘listen, we've got a real problem here. The swings in ad impression counts are anywhere from +100 percent to -50 percent. We've got to fix this impression, we look like total idiots’,” Stuart, now the CEO of marketing trade group MMA Global, said.
“I mean, the marketer doesn't know about $10 million of advertising or $20m or $5m. They have no goddamn idea. We stepped in to really fix the impression dynamic. I called the CEOs of the companies, I said, ‘loan me your CTOs, we're going to write a global standard’.”
In late 2004, the IAB released the Ad Impression Measurement Guidelines. A few years later, in 2009, the IAB released the related Click Measurement Guidelines.
“We wrote the click measurement guidelines, which gave it validity. That was a big mistake,” Stuart said.
“But at the time, we were writing the impression guidelines. We needed to write the click-through guidelines too, because click-through had become a bit of a quasi-secondary currency, and I think it became a currency because agencies are lazy. That's what I think happened.
“And publishers weren’t in a position to fight, marketers weren't paying enough attention, and so it became the de rigueur standard, unfortunately, and everybody just believed it.
“But there's no relationship between click through and performance, none whatsoever. I know that because I've run the survey. There's no relationship between click through and sales. So what the hell are we doing with it?”
Nothing can compare to having the CEO on your team, and lucky for us, Eric [Schmidt] immediately got how web traffic analysis could positively affect Adwords.
In April 2005, Google acquired a small start-up called Urchin, the team that later became Google Analytics. One of the founders of Urchin, Scott Crosby, wrote about the experience – and it's a great read – describing the slow process of realising the value in detailed analytics for websites.
“The pervasiveness of Google Analytics now seems kind of a given, but in the spring of 2005, we were fairly panicked that its Google-fied release would be greeted with a shrug,” Crosby wrote. The day they joined Google, then-CEO Eric Schmidt spent some time with them learning about web analytics.
“Nothing can compare to having the CEO on your team, and lucky for us, Eric immediately got how web traffic analysis could positively affect Adwords,” Crosby wrote.
“A few years later, Google did a big internal study with a bunch of “quants” running various models, and they pretty well proved an XX% increase in ad spending across the broad swath of customers studied. That was big money, with a 'B'.”
A lot of the holding companies started selling CPCs (cost per click) without anybody looking at what they were actually doing and the quality of that traffic … which was the best sleight of hand move that's ever happened in our industry. In any other culture, people would be in jail.
Last click has value, just not much
If the early IAB and Google were key players in making last click attribution fashionable, what happened next, and what are the lessons for today?
“The big picture problem is people confused 'last-click attribution' with 'value of marketing investment'. When they did that, they basically confused the concept of distribution (last-click and response channels are basically trying to accelerate path to purchase) with influence (marketing is often trying to persuade, or keep top of mind, to consumers),” according to Henry Innis, co-founder of martech firm Mutiny.
“That confusion has led to last-click attribution dictating budget allocations in some instances, boards prioritising channels with high last-click attribution, which reduces investment in influence channels. Marketing looks more efficient as a result, but tends to persuade less of the market and inhibit market share growth.”
Last click has some value, Innis said, as it shows what the drivers to purchase are and can help with customer journey analysis, but it gives no credit to influence channels like TV and out-of-home.
“My – very biased – view is every marketer will need a marketing investment analytics platform,” he said. “One that is measuring/modelling the value of marketing in lifting revenue contribution, not associating clicks with revenue.”
"Apathy, laziness and sleight of hand"
Clicks were an easy metric to use, Nic Halley, the founder of strategic consultancy Mindbox said, and it was also easy to obscure the real costs, meaning there were margins to be earned for agencies.
“The problem we've got now is apathy and laziness. So [last click] developed in 2004 because the CTOs were making the decisions,” he said.
“A lot of the holding companies started selling CPCs (cost per click) without anybody looking at what they were actually doing and the quality of that traffic … which was the best sleight of hand move that's ever happened in our industry. In any other culture, people would be in jail.”
Buying CPCs is simple, can be done by inexperienced employees and can be difficult to audit, Halley said, adding that econometric modelling that takes into account the entire user journey is a step in the right direction.
“That’s where we start to get into the teenage sex territory,” he said. “Everybody’s talking about it, very few people are actually doing it.”
While approaching the age of consent, it appears last click may now be on its last knockings.
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