Beyond the Last Touch: Attribution in Online Advertising

Abstract

Online advertisers often utilize multiple publishers to deliver ads to multi-homing consumers. These ads often generate externalities and their exposure is uncertain, which impacts advertising effectiveness across publishers. We analytically analyze the inefficiencies created by externalities and uncertainty when information is symmetric between advertisers and publishers, in contrast to most previous research that assumes information asymmetry. Although these inefficiencies cannot be resolved through publisher side actions, attribution methods that measure the campaign uncertainty can serve as an alternative solution to help advertisers adjust their strategies. Attribution creates a virtual competition between publishers, resulting in a team compensation problem. The equilibrium may potentially increase the aggressiveness of advertiser bidding leading to increased advertiser profits. The popular last-touch method is shown to over-incentivize ad exposures, often resulting in lowering advertiser profits. The Shapley value achieves an increase in profits compared to last-touch. Popular publishers and those that appear early in the conversion funnel benefit the most from advertisers using last-touch attribution. The increase in advertiser profits come at the expense of total publisher profits and often results in decreased ad allocation efficiency. We also find that the prices paid in the market will decrease when more sophisticated attribution methods are adopted.

Attribution Modeling Increases Efficiency of Bidding in Display Advertising

“…Predicting the 30 days conversion probability is thus not enough as different events may change the attribution probability until the conversion actually happens: the competition (or other channels such as search-based advertising) may capture the attribution by generating clicks on their side. This characteristic of the last-click attribution has been shown to drive more efforts on average from advertising platforms and thus be more effective than other mechanisms in the case of cost-per-mil (CPM) payment models Berman (2015). However from the same study we observe that it is not obvious for performance advertising (CPC or CPA).…”

Ad Networks and Consumer Tracking

“…To summarize, expression (13) suggests that tracking is more likely to expand the provision of advertising on digital publishers when consumer preferences for the two publishers are positively correlated and advertisers use tracking information to cap the frequency of impressions or implement retargeting across outlets. By contrast, we expect a restrictive eect on the provision of ads when consumers' preferences for the publishers are negatively correlated and tracking information is used for targeting ads to consumers with specic preferences.…”

“…We assume that r i andr i are increasing and concave functions of m i , to capture diminishing returns to advertising. 13 Assume now the advertiser multi-homes, buying m i impressions (per consumer) on publisher i. The advertiser's total revenue is…”

Towards a Digital Attribution Model: Measuring the Impact of Display Advertising on Online Consumer Behavior

“…Given the plethora of advertising channels, media, and targeting techniques, it is crucial for advertisers and marketers to disentangle the influence of each channel in order to better optimize their return of investment (ROI), among other advertising goals. Most of the related works in this stream of literature conduct an empirical analysis for the channel attribution problem with a few exceptions that propose a game-theoretic approach (Berman 2013). The existing empirical digital attribution models capitalize on the variation of advertising exposures at the individual level across consumers in order to estimate the real effect of advertising.…”