You’re spending money on PPC ads, on improving SEO performance, and attending multiple events. How do you know which of these investments is paying off? That’s what Marketing Attribution is all about.
In this episode of The Marketing Mix, we’re talking to Steffen Hedebrandt, CMO and co-founder of Dreamdata, about the importance of marketing attribution for small and mid-sized B2B companies.
We discuss the challenges of tracking complex buyer journeys, and the different attribution models that can be used – from First Touch to Last Touch and everything in between.
Steffen highlights the importance of data hygiene, and making sure you have your processes set up to collect the right data at the right time. So that you can then make informed decisions about marketing investments.
And we talk about the limitations of Google Analytics for B2B attribution, where understanding account activity is as important as tracking individuals.
Key Takeaways:
Connect with Steffen on LinkedIn
Read Dreamdata's take on Revenue Marketing here
And check out Dreamdata's B2B revenue attribution platform
Timestamps
02:30 Defining attribution
05:50 Justifying the investment
09:50 Comparing attribution models
18:55 Importance of collecting data early on for analysis
21:35 Limitations of Google Analytics for attribution
27:20 Finding proxies for good outcomes and shorter feedback loops
You’re spending money on PPC ads, on improving SEO performance, and attending multiple events. How do you know which of these investments is paying off? That’s what Marketing Attribution is all about.
In this episode of The Marketing Mix, we’re talking to Steffen Hedebrandt, CMO and co-founder of Dreamdata, about the importance of marketing attribution for small and mid-sized B2B companies.
We discuss the challenges of tracking complex buyer journeys, and the different attribution models that can be used – from First Touch to Last Touch and everything in between.
Steffen highlights the importance of data hygiene, and making sure you have your processes set up to collect the right data at the right time. So that you can then make informed decisions about marketing investments.
And we talk about the limitations of Google Analytics for B2B attribution, where understanding account activity is as important as tracking individuals.
Key Takeaways:
Connect with Steffen on LinkedIn
Read Dreamdata's take on Revenue Marketing here
And check out Dreamdata's B2B revenue attribution platform
Timestamps
02:30 Defining attribution
05:50 Justifying the investment
09:50 Comparing attribution models
18:55 Importance of collecting data early on for analysis
21:35 Limitations of Google Analytics for attribution
27:20 Finding proxies for good outcomes and shorter feedback loops
Steve:
There’s an old, overused saying in marketing that goes “Half my advertising spend is wasted; the trouble is, I don’t know which half.”
But that’s no longer as true as it used to be. We can track online behaviors, we can measure activity, and we can link at least some of the data together. All of which is covered by a thing called Marketing Attribution.
The idea being that we, as marketers, should be able to tell which of our go-to-market programs are producing revenue, and which are not. What we should cut and what to double down on. Now, it’s not perfect. It’s a leaky data pipe. And it can consume a lot of time and resource. But since it’s a hot topic right now, I wanted to dig deeper into the subject. So today’s interview with Steffen Hedebrandt looks at the how and why of marketing attribution. Enjoy!
[Intro Music[
Steve:
Today I'm talking with Stefan Hedebrandt, who is CMO and co-founder of Dream Data. They're a SaaS company based in Copenhagen with a revenue attribution platform that's particularly focused on small and mid-sized B2B companies. And we're going to be talking about marketing attribution. Stefan, thanks for joining me on the Marketing Mix.
Steffen Hedebrandt:
Thank you so much Steve and since we have a common shared employer I'm sure we have some similar examples that we can return to as well during this conversation but looking forward to it Steve.
Steve:
Yeah, we have a few shared war stories, that's for sure. So let's start with the basics. So I think marketing attribution, honestly, a lot of small companies don't even think about marketing attribution, at least early stages. And then once they're investing in things like Google Ads, social media, then it's time for them to say, okay, let's take a look at this. So can you walk us through the basics of attribution specifically for B2B companies, what it is, how does it work?
Steffen Hedebrandt:
Yeah.
Steffen Hedebrandt:
Yeah, and I think we should probably, if we can like, we should almost park the attribution term initially. I think an easier way to think about it is just like knowing the path that your customers took towards ending up in sales meetings with you and.
Steffen Hedebrandt:
And that to me kind of at least I feel like I've seen in my career that...
The easiest way to be successful with marketing is when once you start figuring out where does this great fit account come from and is there any tactics that we can replicate or just scale rather than having to reinvent the wheel every time we want to do a campaign. So to me it's all about just trying to understand how do people hear about you and particularly how do the well qualified people hear about you and then trying to do more of those activities.
Now you can get at that from a very technical and data focused point where you need engineers and everything to help you out. But there's also much simpler ways of going about this, or at least if you're starting out. Start every demo call, sales meeting with...
Hey, how did you folks hear about us? So like, where did you discover us? And like, remember to tell that, those anecdotes to your colleagues. So your company starts to develop a sense of what is this motion? What is the recipe that we carry out that leads us to having sales meetings?
Or when people submit forms on your website, you can offer them the option to tell you, like, how did you hear about us? And I think that it's super important that you as a company act curious around this because you need to understand where the best accounts come from so you can do more of it. And it's much easier if you have a team discussion about it rather than just developing your own narrative about what's going on.
Steve:
Yeah, you're right. We easily fall into the trap of this jargon, right? There's a name for everything. And as soon as you give it a name, then it sounds complicated and it sounds like a big deal. But you're right. Attribution is really just understanding where your customers or your potential customers come from, right? Which makes sense. So you start off slow, right? You start off with...
asking people, right? It's always what we come back to with marketing. It's like, well, talk to your customers. That's really how you find yourself. So you start to get a feeling for where people are finding you. The forms is an interesting one. Generally, I find people don't fill out the empty fields, but if they do, you learn something from it. But then at some point, presumably if you're investing significant money, it's a typical problem with marketing. I spend all this money on marketing and I'm not sure what's working and what's not working. Should I double down on Facebook ads? Should I be doing something different with my Google ads? Even, you know, which trade show should I be going to, right? That's all part of this understanding the marketing mix. So one of my fears for small mid-size companies is you can spend an awful lot of time trying to work that out, right? Whether you call it attribution or whether it's just trying to work out, you know, where you're spending the money in the right places. So...from your perspective, having done it, I think, let's say the simple old fashioned way through to building a platform. How do you justify the investment of time and money into whatever type of attribution that you're working on?
Steffen Hedebrandt:
The funny way of saying is that how do you not justify it? Because you're spending a lot of time and money every single week, every single month on all sorts of activities that are supposed to drive attention about what you do.
Think about that you're like the whole sales team you have, you're paying their salary, the whole marketing team salary, the whole CS team salary. Everybody should be trying to be as data informed as they can about why are we doing these things. Like you can only spend a dollar once in your company. So you wanna be able to put that dollar where it looks like you get the most impact out of it.
So I think it's, to me, it's something that I feel like you should be constantly thinking about, how can I get the most effectiveness out of every dollar I spent? Now that was kind of like a little bit of indirect answer to it, but.
I would say once you're up in the, once you're like a small business, just, you know, below 50 employees or something like that, or even just starting out, it's, of course, it's a lot better just doing a whole lot of stuff that feels right. Because before you can do analysis, there needs to be activity. So of course, in the beginning, it's much better just to like, you know, get shit done rather than trying to measure it. But as you grow, and the investment you have in going to market grows, then you should really start thinking about this. Particularly if you're in B2B because it's classically much more complex to answer the question of what's actually going on. And the reason for that is that, you know that Steve, as well that it takes six or 12 months from your initial marketing activity until it ends in your sales pipeline.
And you're selling to typically to a team or a buying committee of three, four, five, six people. So it's not kind of that linear journey where it's just one person who clicks your ad, comes to your website, books a demo and buys the product. No, it's a lot of people that touches a lot of ad platforms and, you know, there's this classic messy page of an image of a customer journey where it suddenly starts to become very hard. But if you're spending, let's say, I would say tens of thousands of dollars every month, this is something you need to take very seriously, unless or you risk wasting a lot of those money if you're not able to connect those dots between what starts the journeys and what gets them signed and so forth.
Steve:
Honestly, a lot of people, when they first start out with paid ads, it's a few hundred bucks a month, right? So at that point, you're not doing an attribution model, but to your earlier point, you do at least wanna make sure if something's coming out of that. As you get into the thousands, okay, now it's worth spending some time and possibly some money to work it out.
I definitely feel your pain with the complex buyer journeys, the six to 12 month sales cycles. So one thing that gets talked about a lot is which attribution model you use. So there's the first touch, there's the last touch, there's various models within. Can you give your views as to maybe how somebody should start out and then where they might get to with those models?
Steffen Hedebrandt:
Yes, and I wish it was easy to answer. I'll tell you which model I like the most when I get to the end of my answer. But first of all, using an attribution model, you should think very carefully about what it means or what you're applying this model to. An attribution model is an advanced word of saying ‘Let's look at all the touches we're aware about, and then let's try to isolate the importance given whether that's the last thing that happened or the first thing that happened’.
A CRM system would typically have this thing that they call an original source. And what that typically captures is the session within the demo call gets booked.
Now, that's fine. Then it would say somebody came directly to your website and requested the demo call. But what typically leads, like in B2B, there's no demo calls that comes out of nowhere. You know, it's word of mouth or it's some marketing activity or outbound activity that we did that initiated this journey towards the session that captures the booking.
So if I were to use the CRM system as my source of truth for this attribution, it would say somebody came in directly to the website and booked a demo. First touch, last touch, whatever, it's just somebody who converted. But what actually started the journey, if you look at it in that kind of, let's say there's five sessions involved, like marketing activity, then somebody comes from organic search, and then direct, because now the URL sticks in the browser.
If you're able to capture that whole session, then it's quite meaningful to use a first touch model. Like what is the first thing we know? Oh, it was this marketing activity that we did, that initiated this five step journey that on the fifth visit we got our demo booking. So...
There's a lot of flaws in what kind of model you pick, particularly because the data is not as complete as people think it is.
Then the next thing I want to point out to people is, you should also think about towards which business value is it that you do attribution.
So there's like last few years have been a lot of hate on this MQL or like marketing qualified leads. And some of it is justified and that's because marketers have forgotten what the Q word in the MQL actually means. It means that somebody that is qualified, meaning that it looks like somebody we normally sell to, did something. But what I wanted to say with this little bit longer rant is that you don't want to just obsess about attribution to something that collects leads. You want to look about attribution of something that represents quality for your business. So that could be a sales opportunity or at best new business. So you can replicate what are the things that consistently start high quality outcomes like sales opportunities or revenue at best. Whereas if you obsess about just...
How can I do more of what just generates a lot of email addresses for us? That doesn't necessarily, that's most likely not going to correlate with what is the best thing you can do for your company in terms of producing quality demand. That was a long explanation. Oh, and I promised to say, my favorite model, if...
If you're able to actually show the journey from first touch until revenue, then I really, really like the first touch model because I think for a lot of cases, our responsibility as marketers is to start out a quality demand that ends up becoming sales much later. So if there's things we can consistently do that gets us attention from the right kind of people.
That's why I want to use the first touch model to isolate what is it that starts the quality journeys for us?
Steve:
So, you know, particularly with some of these longer B2B cycles, you know, I've had leads that have come in and we get very excited because somebody booked a demo. We go back into the CRM and we talked to this person five years ago at a trade show, right? That was the first time they got into the CRM. And then you may not have heard from them for three years and then they were on a webinar and then…
So that's a lot of the value of this. It's not, as you say, that person just filling out a form on the website and saying, please give me a demo. As marketers, that's not particularly useful to us. We really wanna know when was the first time we saw them. So if it is that trade show, okay, well, now we have an idea that's a good trade show to go to. And then the back end of the customer journey, particularly with B2B is a lot more complicated because it typically isn't a purchase on the site, right? It's not somebody going in and putting it in the shopping cart and giving their credit card. Sometimes it is, but typically it's then going and buying it from a reseller or some other activity. So I think to your point, ideally you want to be able to track it from that first touch through every touch that they're doing and then get it to a point…. If you can't get it to the point of purchase… get it to a point that you know, converts it a certain percentage wise. So for software, often that is a demo or a download or downloading an app, something like that, right? So you really wanna be able to track it in an ideal world with a very complicated model. Ideally, you would track it from the first time you talk to somebody, every time you talk to them, and what do they do that leads them into being a customer. And that's when it gets very complicated.
So I think what we're saying here is, when you're first starting out, first touch is probably a great way to look at it. But then as you're spending more money and you want to get a much closer look and better data, then you start building in these other levels to it.
Steffen Hedebrandt:
Yeah, I think essentially what we're trying to do is to help us make smart decisions. And what I'm typically like, the way I think about the product we build ourselves as well is like, if you have like kind of a bell curve or like a normal distribution, you want to be able to understand which of the activities we're doing is most likely a waste of money.
And which of the things that we're doing looks very likely to be a good way to invest our budget. And if you're just continuously able to like filter out the worst parts of your go-to market and then reinvest those money,
into things you know work, then like over time your performance becomes more and more effective. So not trying to make this kind of 50-50 calls, we're more trying to make these calls of, okay this was a waste of time, or this was a great investment.
Steve:
Yeah, so in other words, we're not trying to get the perfect data set out of this, right? We're not trying to say, if I had $100, I know exactly where I spend that $100. You're really saying, I know there's a certain areas that I will not spend any of that money because, you know, we've seen that it doesn't drive a thing. And I will probably spend a larger chunk of it at these certain activities because I know these drive good activity. But then there's these areas in the middle that, you know,
you're probably not paying so much attention to, but you know you get something out of them.
Steffen Hedebrandt:
Yeah, exactly. If you know last year you created 10 sales opportunities out of the people you met at this conference, then yes, you should definitely book tickets for it again. Or the opposite, you had a big event budget and you can't trace any opportunities back to it. So maybe try something else than that.
Steve:
Yeah. So this isn't so much about, am I running the right ads or, you know, have I perfectly hit the messaging? Am I spending it in, in generally the right areas? And then I'm sure as you put more time and energy into it, you get better quality data and then you just, just decide where you, you know, where you want that balance to be.
Steffen Hedebrandt:
Our tools do go down to the individual ad that is running, but for most people, it's better just to think about being able to find the winners and obvious winners and losers of your go-to-market.
Steve:
Right. So I'm glad you brought up MQLs as well because I spend a lot of time talking to people about MQLs because I think when you're first starting out, it's a great model to use to start getting the marketing engine turning, to build that bridge between marketing and sales because I think you and I have both experienced that, that if marketing and sales aren't talking the same language, then you're really not going to get where you need to be. So I think MQLs is an important part of this. But there I am again, throwing more jargon in, right? So I'm talking attribution, I'm talking MQLs. So if somebody is starting out with this, is interested in attribution, what are some of the steps that you would suggest they take to start building up maybe the data set and the capabilities to be able to look at that?
Steffen Hedebrandt:
It's a lot about thinking about this Chinese proverb of the best time to plant a tree was 20 years ago. And it's a bit the same here with the data. We need to understand what's going on. The moment you want to do the analysis, then it's too late because if the journey is 12 months, then in theory you have to wait 12 months until you have collected data. So get some good habits in there of, you know, make sure your website is tracked, make sure your salespeople doesn't just use their own mobile phone, but they use some sort of calling software. So you can see on that day you called this person or if you're, you know,a little bit old school language, but you collect a 20 business card at a conference, make sure you write that in the CRM saying, I met these people at this conference, or if customer success is just a Gmail inbox, move it into like a proper tool for it. So go through all the places where you interact with customers and think through whether are we leaving behind digital traces of who,which accounts we speak to and which persons at these accounts are we speaking to. So that once you want to go and do a bit more of the complex analysis, then you have actually been generating information about this for months already.
Steve:
Right, so rather than spending ages building the perfect, you know, attribution plan, first thing is start collecting the data and then it gives you some breathing space to put the rest of it together. So you mentioned a couple of, I guess, software pieces to this. I think most people, if they're at this stage where they want to take this seriously, they already have a CRM up and running. They probably already have Google Analytics set up. What are the other things that
that you think they would need. And you seem to find my suggestion that everyone has CRM funny. So maybe I'm wrong on that. So if you wanna talk about that as well, maybe you see it more than I do, maybe that's not true.
Steffen Hedebrandt:
I think the hygiene around the CRM differs a lot from company to company, but it is extremely important that you care about having this point of access to accounts that you speak with and which people are part of which accounts and making sure every time a mail is sent, you log in to the account and you press call from within the CRM, because that is going to be your foundation for understanding how you interact with customers.
The one component that people are typically missing in these digital companies we're typically selling to is that they haven't found a first party tracking solution for their website. And that sounds a little bit advanced, but what it means is that if you're relying on Google Analytics to track your website, Google owns that data and is the one that...
They can basically do with it what they want. And you're typically not able to join PI, identifiable data together with tracking data from Google. So you need to find somebody who can track your website and store it directly into that tracking data into a data warehouse that you own,so that you can join these informations about some user on your website did x,y,z with oh it was actually Steve that pushed through this form from this company.
And those that only have Google Analytics available as the source of tracking the website, they're not able to make this joint of some random user did something together with, oh, it was actually Steve from this company. So CRM and then some kind of first party tracking solution that could be DreamData, but could be segment.com or a lot of other suppliers out there can do.
Steve:
And the challenge with Google Analytics, and I don't get that deep into Google Analytics, so set me straight if I'm saying something wrong here. So it's sort of a two-fold problem. One is they're concerned about privacy, at least they claim they are, right? So some of the data is hidden. And then in my experience, a lot of it as well is because of their whole ad engine and the basis behind that, they actually don't want to share too much of this information because it can undermine some of the other ways that they're monetizing it. Is that fair?
Steffen Hedebrandt:
Yeah, and then on top of this, if we're speaking B2B, Google has no account concept. They only have the concept of individuals. So it's quite a good solution if you're selling B2C like a running shoe. So the user clicked this ad, came to our website and checked out and then you can see how much those shoes cost. But in B2B, we are challenged by the fact that there's five people that's probably using one or two or three devices, and the journey started in January, and now it's late August, and they still haven't bought. And there's no, as we talked about before, there's no revenue component in B2B on the website. On the one hand, there's no revenue component,
website typically. So the money you have to typically pull from the CRM system, which has nothing to do with what's going on Google Analytics.
So I would say if you're in B2C and listening to this, Google Analytics can be an okay solution. But in B2B, you have to have some kind of account concept and how to get revenue components joined together with the activity of people on your website and so forth. So there's a lot of challenges in B2B marketing, and that's probably also what makes it fun as well.
Steve:
And I think it's quite unusual because the Dream Data tool, you're very out front saying this is a tool for B2B revenue attribution. So clearly part of that is based on what you just talked about and maybe the complexity of the journey…
Steffen Hedebrandt:
It is actually, you can say, it's like the backbone, the differentiator is that we have account timelines. Whereas if you're in B2C, you only have timelines of individuals. So if four people are part of a deal, we would look at this deal as all those four people on this account moving from first touch until people buy.
The reason why you need to be able to do that is that the person that initiates the journey quite often isn't the one that signs the contract. So if you're not able to line all those ducks into the same row, then you have a lot of costs on initiating the journey that might only give you a newsletter sign up. And then six months later, you get revenue from some person that just came in directly and signed a contract. That's where marketing starts just to look like an expense.
Whereas if you can follow that timeline, it's like in our data model, it says Steve, Steffen, et cetera, they're all part of this timeline. And the revenues are out here to the right. And it started with this guy clicking this ad.
So that is like, if you're out there thinking about this problem, you need to find a vendor which, in the core, in the stomach of it, has a timeline that has an account concept, and not just a concept of individuals doing stuff. I don't know if it makes sense, Steve.
Steve:
Yeah, absolutely. And I do think, you know, I often hear this, I see it a lot on LinkedIn, this whole idea of, well, B2C and B2B is the same for marketers. And it really isn't. There are a lot of the basic concepts are the same, but this is one of those areas where it diverges. You're right, it's a buying committee, it's a complex journey.
Right. And I think that that's what makes B2B marketing, as you said, much more interesting, right? Because it's much more complex and you've got to sort of build these things together.
So you made the comment earlier that this is quite a long journey, right? Because depending on what your sales cycle is, to do anything useful with this, I would say it's probably 2x your sales cycle before you really know if this is paying off. So what are the things that you look at along the journey as somebody's putting this system in a place to say, okay, yeah, this we're moving in the right direction. We're getting the right kind of data. This is going to get us where we need to be.
Steffen Hedebrandt:
I think what you said before, Steve, is finding proxies for what is a good outcome for you. Because we can't sit back and just wait for six or 12 months for something to happen. We need something that has a shorter feedback loop. And typically...
getting a demo call booked on your website can have some causality to it. Like we just sent this email and then one or two days later or even immediately people start booking demo calls or we launched this new ad campaign and demo calls get booked. So ideally you go as far as to contracts that are signed but then you can kind of reverse engineer your way down through the funnel to places where
there can be some kind of feedback loop to whether it's meaningful or not, the things that you're doing. I think it's super important to hold yourself up to high standards of what, what is quality demand for your company. So what I mean by that is that like if you as a marketer are not frequently talking to the sales team about the leads that are coming in, whether they are happy with them. I don't think you as a marketer is doing your job correctly because in B2B marketing, there's only one scorecard at the end of the day and that's when your company sells more. It's not that you hit your MQL target. It's money that needs to get in there. So you need to be able to pay super much attention to whatever conversions are coming in. Does it look like the typical ideal customer of your company or not?
If it doesn't look like the right people that are coming through the door, you probably have to go adjust the activities that you're doing today.
Steve:
I think you're right. The number one thing is communication, right? If the sales team are frustrated, you as a marketer better hear about that pretty quickly and not just find out six months from now at the sales meeting when everybody's complaining. So yeah, I think that communication is key.
So this is obviously a very complicated subject. We've only really scratched the surface and the half hour that we have here. So maybe you could share some of the places you go, some of the resources you have to keep up on marketing attribution, B2B marketing, so that if people want to learn more, they can go check some of these places out.
Steffen Hedebrandt:
I tend to find the people that inspire me on LinkedIn and try to connect with them. Or at least follow them and their activities on LinkedIn. So I think that's probably my greatest source of inspiration.
And then I think besides that today there's Slack communities for almost any kind of niche. So whatever topic you're interested in, try to go to Google and put in the topic there and write a Slack channel or something like that. Then typically there are people tend to share like really niche geeky stuff in those channels.
Steve:
Yeah, once you really want to get down into the details. So, all right. So, first thing we would say is people should come and follow you on LinkedIn and then they'll see who you're following and what you're sharing and that's a good way to get into it.
So one last question. So this is the marketing mix. I think of it as the kind of conversation I would like to have with interesting people over a drink or a coffee. So if we were doing that, what would be your drink of choice?
Steffen Hedebrandt:
I think I would take a Negroni.
So some strong stuff.
Steve:
Yeah, now we're recording this on a Monday morning, so I'm hoping you're not having an negroni right now, but you've got that to look forward to at the end of the week, right? Well, hey, Stefan, I really appreciate you sharing your expertise here. And again, it's dreamdata.io. I'll put the link in the show notes. And I look forward to talking again soon.