Why the “last click” model is flawed (hint: getting me to buy takes more than 3.2 ads)

• Tweet

• Tweet

94% of touch points in today’s “last click model” are thrown away and not given any credit for a sale.

- Esco Strong, Director, Microsoft Advertising Institute

Rob Birgfeld over at SmartBlog on Social Media has a good post on why ROI as measured by the last click – the last click before a sale – is a fundamentally flawed model. (See Live from Ad:Tech — The Myth of the “Last Click”).

Citing findings presented at Ad:Tech by Esco Strong, Rob goes on to note that “social media engagement — done the right way — can and will continue to affect customer perceptions of your brand.”

I couldn’t agree more. Let’s expand on that. Assigning nearly all monetary value to the last click basically assumes that nothing else influenced a purchase except that last action. In short, that’s absurd.

Microsoft Advertising Institute’s study notes that “users interact with an average of 2.2 other ads from the same brand over two days before the conversion.”

Let’s take that a step further and imagine that the same people eventually clicking on ads and purchasing are also consuming lots of information from their own peers and others through social networks, blogs, forums and even (gasp) traditional media.

So while people might be interacting with 2.2 other ads before the last click, there’s a great deal of opinion-sharing and perception-shaping that happens completely independent of those ads. An ad might be the digital channel that eventually takes me to the point of sale but in most cases I wouldn’t even be clicking on that ad unless I’d first gotten an opinion from someone I trust.

Pure visibility still matters a lot – this isn’t a diss to advertising. But consider “high-involvement” purchasing decisions – say, buying a cell phone – and the amount of thought people put into those decisions. A single interactive ad isn’t going to just whisk you through the entire thought process to the point of sale. If you’re spending any time online these days, odds are that someone else (an actual human being) influenced your purchase in some way.

For example, we’ve done some work with clients that points to notably higher conversion rates for traffic referred by social media and blogs compared to paid search. As the ability to better connect social media to metrics like conversion rates continues to evolve, I think we’ll begin to have a much more sophisticated and measurable view of influence over the purchasing decision…certainly more than the last click.

Joseph Kingsbury

twitter.com/jkingsbury