Improvement
Introduction
The assignment of marketing costs to transactions is an important feature so that contribution margins including marketing costs can be flexibly calculated from transactional data.
A technical challenge here is dealing with special cases, e.g. “What happens to the marketing costs if there were no transactions for a campaign on a certain date?”. So that the costs are still included in the contribution margin calculation, the cost data must always be anchored in the transactional data. "Nothing should fall under the table."
In the past, there were complex fallback rules to always match all marketing costs to transactions. Example: If there are no conversions for the cost from one source on a day, then the cost will be spread across all conversions with the same campaign type on that date.
The assignment via fallback rules has advantages, but was not very transparent for users and sometimes also led to unfortunate distortions in data analyses. For this reason, we have decided to simplify the allocation of marketing costs and make them more transparent:
Assignable and non-assignable marketing costs
The assigned marketing costs (OD, ID, attributed) are now calculated from two components that are now also visible in the front end:
- Assignable marketing costs is the portion of assigned marketing costs that could be assigned to transactional records.
- This measure returns results along with transactional attributes (e.g. products, brands, customers,…) and is part of the contribution margin calculation.
- Unassignable marketing costs is the portion of assigned marketing costs that cannot be assigned to transactional records.
- This is usually the case when there are no touch points from completed customer journeys (attributed) or conversions (OD, ID) on the same date and from the same source.
- This measure does not return any results together with transactional attributes (e.g. products, brands, customers,…) but is still part of the contribution margin calculation.
The sum of both components is the allocated marketing costs.
Marketing cost assignment process
- minubo loads the costs per period and campaign from the data source.
- If the source provides costs for a period longer than 1 day, the costs are converted to daily costs.
- The costs per day and campaign are written to the Marketing costs measure.
The further steps are only relevant for the 'Assigned marketing costs'.
For 'Associated marketing costs (BD) / (FD)':
- The daily cost per campaign is distributed across the conversions from this source on this date:
- If there are conversions from the same campaign source on that date, the cost will be distributed across the orders behind those conversions.
- This is the assignable portion of the marketing costs.
- Accordingly, this portion of the costs can be evaluated with all transactional attributes.
- If there is no conversion with the same campaign source on that date, the cost will be written to the 'Unassignable Marketing Costs' measure.
- Accordingly, this portion of the costs can only be evaluated with the sales channel, the marketing channel and the other campaign attributes.
For 'Associated Marketing Costs (Attributed):
- The daily costs per campaign are distributed to the touch points of completed customer journeys. That is, if there is a customer touchpoint from that source on that date that is part of a completed customer journey, then a portion of the marketing cost is assigned to that touchpoint.
- If there are touchpoints in completed customer journeys with the same campaign source on that date, the cost will be distributed across those touchpoints.
- This is the assignable portion of the marketing costs.
- Accordingly, this portion of the costs can be evaluated with all transactional attributes.
- If there are no touchpoints in completed customer journeys with the same campaign source on that date, the costs will be written to the 'Unassignable Marketing Costs'.
- Accordingly, this portion of the costs can only be evaluated with the sales channel, the marketing channel and the other campaign attributes.
What changes in the data
The change of the assignment process affects the following measures:
- Assigned Marketing Cost (OD) / (ID) / (Attributed)
- Assigned Fixed Marketing Cost (OD) / (ID) / (Attributed)
- Assigned Variable Marketing Cost (OD) / (ID) / (Attributed)
- Contribution Margin III (OD) / (ID,RD)
- Contribution Margin III Rate (OD) / (ID,RD)
- Avg. Contribution Margin III (OD) / (ID,RD)
- Avg. Contribution Margin III per Item (OD) / (ID,RD)
- Avg. Contribution Margin III per Customer (OD)
Specifically, the following effects occur:
- In data queries that connect transactional attributes (e.g. products, brands, customers, …) with one of the above measures, a new row with the value (empty) may appear.
- The unassignable costs were previously distributed to existing transactions using fallback rules. In consequence, all costs were assigned to an attribute value.
- These fallback rules no longer exist, therefore the share of marketing costs that could not be assigned to any transaction is not linked to any attribute value.
- The Assigned Marketing Costs per Campaign Level 1-5 change as costs are no longer aggregated via fallback on the 'Campaign > Type' level.
Migration
It was important to us that the names of the existing measures do not change, so that no adjustments to existing feeds and their Excel/ Sheets/ Power BI data are necessary.