As marketers, one of the biggest challenges we face is proving the ROI of our marketing initiatives. Marketing has evolved. More and more, marketing should be viewed as an investment in business growth rather than an expense that is a “cost of doing business.” The data we can collect from our marketing efforts, both online and offline, can help us to provide more and more insight into the ROI of our marketing initiatives.
How do we make that transition from marketing as an expense to marketing as an investment in business growth? There are a number of steps we have to take, but one of the first steps is making a change in how we attribute value to all of the marketing and sales initiatives we undertake. So let’s get down to business.
What Is Marketing Attribution?
Marketing attribution is a set of rules for assigning credit to the various touchpoints that a customer is exposed to prior to completing a desired business outcome. This can vary by business and by organizational goals, but the general idea is that you can define a consistent marketing attribution model that will effectively attribute credit for all conversions.
What Are the Options for Marketing Attribution Models?
There are two high-level types of attribution models – Single Touch Attribution and Multi-Touch Attribution. Within these larger umbrellas, there are six common attribution models that you can choose from:
Option 1: Last-Click Attribution Model
If you use Google Analytics as your primary data source for website analytics, this is the default setting you will be assigned when you create an account. Using this model, all credit for a conversion action is attributed to the last interaction that ultimately resulted in the conversion. In almost every circumstance, this is not ideal. Why would you invest any time in all of the other marketing initiatives you have planned if you are only going to give credit to the final touchpoint? Our recommendation is to immediately plan to move away from this model. Please, I beg you, if you fall in this group or if you are not sure, feel free to reach out. We will help you solve your first marketing challenge.
Option 2: First-Click Attribution Model
The other common form of single-click attribution is the First Click Attribution Model. This is pretty much a mirror image of Last Click Attribution, where all value is attributed to the first touchpoint that kicked off the ultimate conversion. The only reason I can identify that you would want to use this model is if you are focused on demand generation and giving all credit to that first touchpoint that kicked off a customer’s interactions with your brand. Once again, our recommendation is no.
Option 3: Linear Attribution Model
The linear attribution model assigns a value to all known touchpoints throughout the entire customer journey. In the linear model, all touchpoints are given an equal value rather than assigning a weighted value to certain interactions. This is probably the first entry point for many businesses first dipping their toe into attribution modeling because it is a consistent model. If you are looking to take a cautious approach to switching up your marketing attribution, this is a good first step. It won’t necessarily offer you a lot of granular insights into how to optimize your strategic approach at a channel level, but it will give you better insight into the channels that most frequently contribute to a conversion.
Option 4: Time Decay Attribution Model
Using the time decay model, the most recent touchpoints are given heavier attributed value for the conversion versus those early touchpoints. All interactions do receive value, but the theory for this model is that the most recent interaction is the most important one and thus it receives more credit than all the previous touchpoints. If your business model is to emphasize the value of the most immediate action, this model could work for you. However, it may give an inaccurate weight to individual “low-value” touchpoints while ignoring “high value” touchpoints based on when the touchpoint occurred.
Option 5: Position-Based Attribution Model
There are multiple variations of this type of attribution model – for example U-Shaped, W-Shaped, and Full Path attribution. However, all of these variations have a very common theme. In all of the models, every touchpoint is given some value of attribution based on when in the purchase funnel they occurred.
For example, in a U-Shaped Attribution Model, the first and last touchpoints are given a heavier weight than all of the interactions that happened in the middle of the journey. The idea is that your high-value touchpoints are the first interaction that started the brand engagement and the last interaction that ultimately closed the deal. It somewhat devalues all the touchpoints that happened in the middle.
Option 6: Custom Attribution Model
The last option, which is likely the ideal solution, is to create your own custom attribution model. While we say this is ideal, the reality is that not many businesses are likely ready for this step. We recommend starting with a simpler attribution model and evaluating how you need to adjust your model to fit your business.
It’s clear that moving away from Single Touch Attribution will differentiate you as a successful marketer moving forward. If you are just taking that first step away from default Last-Click Attribution, you may want to start by tip-toeing into this with a Linear Attribution Model.
Linear is the most common first step for many businesses, and it will start to give you a clearer picture of how all the touchpoints effect conversions. As a simpler Multi-Touch Attribution Model, it will be easiest to explain to other stakeholders in your organization.
Ultimately which Attribution Model you choose will be driven by your data. You should observe increased ROI as you make better allocation decisions based on your Attribution Model. We believe that you need to start now, and we are happy to help you start maturing in how you attribute value and prove marketing ROI.