Google Multi-Channel Funnels

The attribution debate just got bigger

Following on from the introduction last year of Adwords Search Funnels, Google have waded further into the murky waters of attribution with the announcement of a new tool in Google Analytics called Multi-Channel Funnels.

The Multi-Channel Funnels tool looks to address the question of how to attribute true value to different elements of digital marketing. This question has been a hot topic for quite some time now, not least because, to date, nobody’s quite come up with a satisfactory answer. While it’s not clear that Multi-Channel Funnels will necessarily solve the problem itself, it does provide the masses with free data and functionality that was only previously available via expensive paid-for solutions; its release really should bring the debate to the fore, perhaps moving the digital marketing industry towards some sort of consensus on attribution.

So what exactly will Multi-Channel Funnels do?

While Search Funnels looked to help Adwords advertisers better understand how impressions and clicks for different paid-search keywords contributed towards a conversion, Multi-Channel Funnels aims higher and tries to explain the contribution of all and any online activity that led to a conversion. Crucially, both tools represent a move away from the last-click wins attribution models of Google Analytics and the Adwords Conversion Tracking tool, shedding light on each and every step of a user’s journey towards conversion. It may be that a new customer’s first contact with a brand was with social media, which then led them to search for that brand, click on a paid ad and make a purchase. Previously, Google Analytics would have attributed the entire value of this sale to paid search, but the new functionality allows advertisers to see the contribution of other marketing channels higher up the sales funnel.

What’s in it for Google?

What’s intriguing about the announcement is Google’s motivation for releasing this kind of data so openly. The release of Search Funnels was a clear attempt by Google to boost Adwords revenue by helping advertisers to justify spending more on expensive generic keywords higher up the search funnel.

The thing about Multi-Channel Funnels is that it has the potential to dent Adwords revenue. Previous analysis conducted using similar tools tends to show that tracking tools that use last-click attribution – like Google Analytics – have exaggerated the value of paid search while undervaluing the contribution of organic search, social media and display advertising. If the upgraded Funnels tool helps advertisers reach a similar conclusion, isn’t this going to discourage them from spending more on PPC? Well, possibly, but to think that this was an example Google being remarkably open, altruistic and public spirited would be a mistake. Google has been investing heavily in potential revenue streams outside of paid search, notably in its display network, YouTube, mobile and social networking tools.

Multi-Channel Funnels might shift some ad spend away from PPC but, if it motivates greater online marketing spend overall, the chances are that the money is still going to wend its way back to Mountain View.

We'll keep you up to date once we get to play with it - so far it's on very limited release.