Marketing

What Are Marketing Attribution Models?

What Are Marketing Attribution Models?
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What are marketing attribution models? Attribution modeling helps marketers analyze and understand which touchpoints are responsible for conversion from prospect to customer. Different attribution models serve various purposes, providing different values to different touchpoints.

In a perfect world of digital marketing, your customer might read an ad about your product or service on Facebook or Instagram, pay a visit to your website, and immediately hit the “click-to-purchase” button.

In reality, we don’t live in the perfect world of digital marketing. While some customer journeys are simple, the above-mentioned customer will likely undergo a more complex conversion path, filled with many touchpoints, before taking action.

Let’s say your customer engaged with one or more of your channels: your social media, website, marketing emails, reviews, ads, or overall strategy then returns to your website to buy, which of those channels is responsible for the conversion?

Marketing attribution models can help you answer this question, by providing an in-depth analysis as to what touchpoints are responsible for your customers’ decisions to buy. One or more attribution models can provide you with the right decision-making data, allowing you to direct resources toward the marketing channels that are more likely to influence your customers to take action.

Explaining Touchpoints

Explaining Touchpoints

To better understand marketing attribution models, it’s first a good idea to review a couple of marketing terms.

Experienced marketers understand the marketing funnel, which defines the journey a customer travels from prospect to purchase. Touchpoints, which represent each contact an individual has with your brand before, during, and after purchasing provides movement through the funnel.

Your latest Instagram post? It’s a touchpoint. The phone call a prospect makes to your sales staff? Word-of-mouth reviews on Yelp or Google that he or she studies? The website your prospect visits for additional research before buying? The read-and-commented-upon blogs the prospect reads? All are touchpoints.

Today’s customer journey can require many as 500 touchpoints between initial brand awareness and purchase of your product or service. Marketing attribution modeling helps you make sense of which touchpoints are the most effective.

Explaining Attribution Modeling

Several marketing attribution models exist for use. The most common include:

  • First interaction
  • Last interaction
  • Last non-direct click
  • Linear
  • Time-Decay
  • Position-based

As with similar marketing tools, these models have purposes, advantages, and disadvantages which are outlined in greater detail, below.

First Interactions

First interaction: Almost instant action

Remember that perfect world, in which your customer saw one of your Facebook ads, visited your website, and bought your product or service? From an attribution model viewpoint, this is an example of the first interaction model, also known as first-touch attribution.

As you can guess, this model attributes 100% of the customer’s conversion value to the first channel your customer interacted with. In this case, the Facebook ad gave full credit for the first touchpoint.

The Facebook advertisement prompted your customer to visit your website, where he/she bought something. Based on this, conversion occurred when your customer saw your social media advertisement.

  • Pros: This model is highly effective when it comes to analyzing how well a marketing channel increases awareness of a new product, service, or brand. It’s commonly used in tandem with ads or campaigns geared to boost awareness of a new product, service, or brand.
  • Cons: The model isn’t useful if the prospect doesn’t immediately hit click “purchase” when visiting your website. Also, because it measures only one interaction, it doesn’t provide much insight as to what might drive conversions.

Last Interaction: The final step

The last interaction, also called last-touch attribution, assigns all conversion value to the last absolute final touchpoint with which your prospect interacted, before buying a product or service. Returning to the above example, if the prospect viewed the Facebook ad, visited your website several times, opened and read several emails, read a Facebook post and blog, then eyed a Twitter feed before returning to your website to buy, that website would be the last touchpoint before purchase. Even with the other touchpoints on this customer’s journey, full credit goes to that final interaction.

  • Pros: As this model measures bottom-of-funnel interactions, it can be helpful in understanding the final marketing channel that led directly to the purchase. Many times, this can be effective for businesses with sales cycles that might not involve a consideration phase.
  • Cons: While great for pointing out that final interaction, this method ignores other factors which influence customer’s actions. Because customers can interact with as many as 500 touchpoints, the last interaction model doesn’t necessarily take into account the influence of those many touchpoints on buying decisions.

Last non-direct click: Analyzing the next-to-last source

Under the last non-direct click model, 100% of the conversion value is attached to the last channel the customer visited before purchase. If this seems familiar to the last interaction model, you aren’t too far off. The main difference, however, is that the non-direct click attribution model focuses on indirect traffic, versus direct traffic, when it comes to assigning conversion value.

Heading back to the marketing glossary, direct traffic refers to direct contact from the customer. In other words, the customer comes directly to your website, by entering a URL in their browser. Non-direct traffic, however, is guided to your website from another source, such as email campaigns, social media posts, blogs, or other “secondary” methods. It’s this non-direct traffic with which the non-direct click model is concerned.

In our marketing example, in which the customer reads a Twitter feed before visiting your website to make a purchase, the Twitter feed gets the credit under the last non-direct click model. The Twitter feed actually triggered the purchase, even if the website was the final touchpoint.

  • Pros: The main benefit of this model is it provides a distinction between direct and non-direct traffic, presenting a clear vision of the latter. It’s also easier to set up, compared to other marketing attribution models. The last non-direct click is, in fact, the standard attribution model offered through Google Analytics.
  • Cons: While easy to set up and monitor, the non-direct click model could also be considered overly simplistic. Much like the last interaction model, the non-direct click focus shows the next-to-last touchpoint but ignores other potential conversion factors along the entire customer journey.

Linear method

Linear: Credit across the entire journey

The linear model gives equal credit to each touchpoint on the way to conversion. If your customer bounced around from an Instagram ad, to a blog, to an email, to a customer service call, to a newsletter, to a Twitter feed, to your website, all of these channels would receive the same amount of conversion credit. The model sees each point of contact as being important during the consideration period and can be highly helpful for ongoing marketing campaigns that measure contact and customer awareness.

  • Pros: The linear attribution provides a holistic view of marketing campaigns, touchpoints, and their impact on your customer. Assigning even credit, across the board, to each marketing channel, helps you plan for the entire customer journey while giving credit to the overall process and involvement of multiple channels.
  • Cons: Assigning equal credit to all 500 touchpoints might seem counterintuitive, not to mention hugely confusing and messy. There is a difference between a low-value touchpoint (such as a clickthrough from a Facebook ad) and a high-value touchpoint (such as a phone call to customer service). Assigning equal value to these two actions can get in the way of optimization.

Time-Decay: Closer to conversion

The time-decay model assigns higher credit to touchpoints that occur closer to a conversion activity. The idea here is, the further back the interaction, the less important it is. A touchpoint that takes place on the day of conversion will receive more credit than one taking place seven days previously. This model can be useful for shorter promotional campaigns, that have a definite endpoint.

  • Pros: This model outlines the significance of each interaction your customer makes while assigning the bulk of the credit to more recent activities that directly impact conversions. With our marketing example, use of the time-delay attribution model means most of the credit would be assigned to the Twitter feed, with less credit assigned to any previous blogs, emails, or website visits.
  • Cons: While this model provides terrific attribution for conversion optimization, it doesn’t give much credit to that very first touchpoint, in which your customer first became aware of your brand, your product, or your service. In many instances, making the customer aware of your product or service in the first place can be a challenge.

Position-Based: Splitting the credit

Position-based modeling means you assign higher credit to first and last touchpoint interactions and then spread the remaining credit to other marketing channels throughout the funnel. The idea here is that the first touchpoint snagged the prospects’ interest, while the last touchpoint closed the deal. The other touchpoints are also acknowledged, by splitting the remaining credit.

  • Pros: This model helps show a full picture of a prospect’s entire journey, pointing out the importance of the first and last clicks on the journey. As previously mentioned, bringing awareness of your product or service can sometimes be half the battle. Position-based modeling also acknowledges the role of other touchpoints in conversion.
  • Cons: This model could result in too much credit being assigned to low-value touchpoints. It’s great that your customer first became aware of your product through a Facebook post, with a final visit to your website sparking the conversion. However, the blog with which your customer interacted three touchpoints before conversion might have actually spurred the decision to buy. But that blog is being awarded less credit than the website, meaning optimization metrics could be skewed.

Model for success

Modeling for Success

Marketing attribution models can help you better understand your customers’ journey through marketing funnels. By using a model or several models, you can shed light on what touchpoints are most useful when it comes to encouraging customers to take action. Proper use of these models provides you with a better understanding of whether your campaigns, ads, and other marketing channel operate. Lead with effective optimization when it comes to moving the prospect from awareness to conversion.

How do you know which marketing channels lead to conversions? Learn more about how marketing attribution models can provide the necessary insight and data as to which touchpoints are successful in driving your customers toward bottom-of-funnel… Click To Tweet

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About the author

Amy Sorter

Amy Sorter is an award-winning journalist, copywriter, and principal of The WordSorters. Her work has been published in regional and national business and consumer publications. Amy's focus is on creating customized, highly engageable content in a variety of formats for non-profit organizations, small businesses, and Fortune 500 companies.