Measuring Digital Channels Contribution to Sales in Russian Company
Abstract
In this paper, the authors aim to offer an approach for measuring digital channels contribution to online conversions (sales) in e-commerce for Russian company. Marketers split digital advertising budget between digital channels depending on channels’ contribution to sales. If a channel has a bigger impact on sales, it gets a bigger budget.
Marketers evaluate contribution with the help of attribution modelling reports. These reports are built-in tool of web-analytic systems like Yandex, Google, etc. The attribution-modelling tool assigns several levels of sales contribution to each channel depending on the chosen attribution model: First click, Last interaction, and other models. Knowing user experience, a company chooses one attribution model for evaluation of channels’ contribution. If marketer do not know much about customer's user experience, the choice of attribution model will be wrong. With wrong attribution model marketer underestimate efficient channels and overestimate non-efficient channels. The authors offer a method based on «sales funnel» which does not require choosing one attribution model over others and do show one precise level of sales contribution for each channel. Other authors previously suggested the «sales Funnel» model, but did not test the model on real data. The findings are based on empirical research of 150000 website visitors for Russian online store. For the studied company, the authors recommend to redistribute part of the budget to more effective channel (like Email-mailing) at each stage of the sales funnel. Paid advertising and referral channel contribute less to sales value and marketers can redistribute part of the budget from these channels to other channels. With a help of the «sales funnel» the authors visualize customer journey and show stages of journey where company loose customers. The paper helps marketers to split digital advertising budget between channels and visualize customer journey to purchase.
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References
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