In this article, we will explain to you what is marketing attribution and why it matters to marketers.
With the proliferation of online advertising platforms, marketers have developed their sources of customer acquisition, allowing them to reach an increasingly specific and wide audience.
However, as a marketer, you should know one thing: are your campaigns really generating revenue?
If you can’t answer this question, you’ll struggle to do the right campaign optimizations and push leads further down the funnel.
Identifying direct conversions from ads is very easily achievable with any platform, however few leads convert with just one interaction with your brand.
While vanity metrics like open rates and social media shares are super easy to find, important data that has real value is fine. more difficult to determine.
For example, what were a lead’s touchpoints with your brand before the conversion? Which Facebook ads campaign indirectly contributed to the conversion of my leads?
Hard to say, right?
Well, that’s exactly the role of marketing attribution, helping you see more clearly about the effectiveness of your channels and the complexity of your conversion funnel.
Summary
- What is marketing attribution
- The benefits of marketing attribution
- The different attribution models
- What is the best attribution model?
What is marketing attribution? ????
Marketing attribution is the identification of a customer’s various touchpoints leading to a specific event such as a conversion.
In other words, it is the means by which the customer came to know and buy your product or service.
It sounds simple enough, but in reality, customer buying journeys are often real headaches.
Does a customer go directly to a website and make a purchase?
Rarely.
Multiple channels and posts drove the conversionincluding the Facebook ad they first clicked on or the email they received when signing up for the newsletter.
Ideally, you should be able to track the entire customer journey from start to finish with personal annotations from each customer on why they made the decisions they made over time.
We will see in part 3 the different attribution models which make it possible to analyze differently the customer conversion path.
The benefits of marketing attribution
You have surely understood that marketing attribution will help you see more clearly the effectiveness of your marketing campaigns, but that’s not all. Here is a list of the direct benefits of attribution:
- Understand the ROAS (return on ad spend) of each campaign : indeed the attribution will allow to analyze and better understand the return on investment of your marketing campaigns by attributing a percentage or a conversion value to your campaigns.
- Optimize marketing budget : attribution will help you better understand ROAS, but above all will save you money by saving you from spending thousands of euros on campaigns that don’t bring you anything. By understanding the main conversion paths, you will have a direct view of what is working and what is not, allowing you to increase or decrease the budget of each campaign.
- Reduce your CAC (customer acquisition cost) : by optimizing your marketing budget, you will be able to drastically reduce your CAC and therefore invest more to grow faster. A significant advantage.
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The different attribution models
An attribution model is a framework for analyzing which touchpoints receive credit for a conversion.
Each attribution model distributes the value of a conversion to each touchpoint differently.
There are many attribution models but in this article we will see 5 of them:
- First Interaction
- Last Interaction
- Linear
- Position-based
- Time decay
By analyzing each attribution model, you can have a better idea of the return on investment of each marketing channel.
Let’s discover together in detail each model.
First Interaction
The First Interaction attribution model, also known as “first click” or “first touch”, gives all the credit for a conversion to your company’s first interaction with the customer.
For example, if a customer first finds out about your business through a Linkedin post, then that post gets all the credit for any sales that occur after that interaction.
It doesn’t matter if the customer found you on Linkedin, then clicked on a Facebook ad a week later, then went straight to your site. In this example, Linkedin gets the credit for the conversion.
Last Interaction
Last Interaction is similar to First Interaction, in that it gives 100% credit to an action.
The last interaction attribution model is also called “last click” or “last touch”.
As the name suggests, this template gives 100% credit to the last interaction your business had with a lead before they converted.
For example, a visitor finds your site through SEO. A week later, he sees a Facebook ad and clicks on the ad.
Later that day, he goes straight to your site and makes a purchase.
Direct traffic, in this case, gets full credit for that purchase.
100% of the value is assigned to this last interaction.
This is the default attribution model in most platforms, including Google Analytics.
Linear
With a linear attribution model, you split the credit for conversion into equal parts between all the interactions the customer has had with your business.
For example, a customer finds you on Instagram, signs up for your newsletter, and later clicks a link on Twitter.
The following week, he goes directly to your site and makes a purchase for $120.
There are 3 points of contact in this situation. Each touchpoint receives 33% of the credit, or $40 conversion value assigned to the channel at the time of purchase.
Position-based
The Position-based attribution model, distributes the credit for a conversion between the first interaction with your brand and the moment when it turns into a customer.
40% of the credit is given to each of these points, with the remaining 20% being split between any other interactions that occurred in the middle.
For example, if a lead first contacts your business through a Google search, views your Facebook page, and then signs up for your newsletter, the first and last interactions receive 40% each of the credit for the conversion, and the Facebook visit receives the remaining 20%.
Time decay
The Time Decay attribution is similar to the linear model, it distributes the value over several events.
But unlike the linear attribution model, the Time Decay model also takes into account when the interaction occurred.
The interactions that produce closer to the time of conversion are more valuable.
The first interaction receives less credit, while the last interaction will get the most.
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What is the best attribution model?
Ultimately, there really isn’t a perfect attribution model that can measure every touchpoint with 100% accuracy.
Finally, here are 2 tips to help you analyze the different models For Your Business :
- Map your customer journey : Document and map all touchpoints and channels a potential customer might interact with, so you can measure and understand key interactions with your customers.
- Define clear marketing KPIs : setting clear objectives will guide you towards the attribution models best suited to your business. For example, if you only focus on conversion rate optimization, the last touch model will be more relevant than the first touch.