Delusion in attribution: caveats in using attribution for media budget allocation

Peter J. Danaher, Harald J. van Heerde

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Media attribution is the assignment of a percentage weight to each media touchpoint a consumer is exposed to prior to purchasing. Many firms consider using attribution to allocate media budgets, particularly for digital media, but an important question is whether this is appropriate. An initial hurdle when answering this question is that, despite the surge in interest for media attribution in marketing academia and practice, attribution does not have an agreed-on formal definition. Therefore, this article proposes an attribution formulation based on the relative incremental contribution that each medium makes to a purchase, taking into account advertising carryover and interaction effects. The formulation shows that attribution is proportional to the marginal effectiveness of a medium times its number of exposures. This means that often-used media will have high attribution weights. However, the profit-maximizing allocation for a fixed budget is a function of advertising effectiveness, but not a function of past exposure levels. By offering analytical derivations and studying simulated and empirical data, the paper shows how attribution can offer misleading insights on how to allocate resources across media. Moreover, the empirical example demonstrates that substantial gains in purchase probability can be made using profit-maximizing allocation compared with attribution-based allocation.

Original languageEnglish
Pages (from-to)667-685
Number of pages19
JournalJournal of Marketing Research
Volume55
Issue number5
DOIs
Publication statusPublished - Oct 2018

Keywords

  • advertising carryover
  • advertising response
  • attribution modeling
  • interaction effects
  • pat-to-purchase
  • probit model
  • profit-maximizing media allocation

Cite this

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Delusion in attribution : caveats in using attribution for media budget allocation. / Danaher, Peter J.; van Heerde, Harald J.

In: Journal of Marketing Research, Vol. 55, No. 5, 10.2018, p. 667-685.

Research output: Contribution to journalArticleResearchpeer-review

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