Download This Paper Open PDF in Browser

Multi-Channel Attribution: The Blind Spot of Online Advertising

58 Pages Posted: 28 Apr 2017  

Vibhanshu Abhishek

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Stylianos Despotakis

Carnegie Mellon University - David A. Tepper School of Business

R. Ravi

Carnegie Mellon University - David A. Tepper School of Business

Date Written: April 27, 2017

Abstract

In this paper, we study the problem of attributing credit for customer acquisition to different components of a digital marketing campaign using an analytical model. We investigate attribution contracts through which an advertiser tries to incentivize two publishers that affect customer acquisition. We situate such contracts in a two-stage marketing funnel, where the publishers should coordinate their efforts to drive conversions.

First, we analyze the popular class of multi-touch contracts where the principal splits the attribution among publishers using fixed weights depending on their position. Our first result shows the following counterintuitive property of optimal multi-touch contracts: higher credit is given to the portion of the funnel where the existing baseline conversion rate is higher. Next, we show that social welfare maximizing contracts can sometimes have even higher conversion rate than optimal multi-touch contracts, highlighting a prisoners’ dilemma effect in the equilibrium for the multi-touch contract. While multi-touch attribution is not globally optimal, there are linear contracts that “coordinate the funnel” to achieve optimal revenue. However, such optimal-revenue contracts require knowledge of the baseline conversion rates by the principal. When this information is not available, we propose a new class of ‘reinforcement’ contracts and show that for a large range of model parameters these contracts yield better revenue than multi-touch.

Keywords: Attribution, Advertising, Shapley Value, Multi Touch, Game Theory, Marketing Funnel

JEL Classification: M37, D86, C70

Suggested Citation

Abhishek, Vibhanshu and Despotakis, Stylianos and Ravi, R., Multi-Channel Attribution: The Blind Spot of Online Advertising (April 27, 2017). Available at SSRN: https://ssrn.com/abstract=2959778 or http://dx.doi.org/10.2139/ssrn.2959778

Vibhanshu Abhishek

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

Stylianos Despotakis (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

R. Ravi

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Paper statistics

Downloads
229
rank
116,497
Abstract Views
1,814
PlumX