In an ideal world, a simple click on your website or ad would immediately convert into a sale. However, in reality, this is not how it usually works for most companies. Today, customers would most likely have to visit your site multiple times before they actually decide to buy something off of it. An online ad, for example, may also have to be retargeted before a customer finally clicks on it.
Once you’ve finally got the conversion, you may be stuck wondering which marketing channel to give credit to. Is it your website, social media platforms, or ad that was responsible for the sales made?
Oftentimes, it is difficult for businesses to determine the value that each of their specific marketing channel has. Every touchpoint plays its part in leading to a conversion, however, by using the marketing attribution model as a tool, this will help you figure it all out.
A marketing attribution model is a framework that analyzes which touchpoint (a.k.a marketing channel), receives credit for each conversion made. Simply, the model acts as an analytical tool that helps companies understand the importance of each touchpoint within their customer’s journey.
Types of Attribution Models
Attribution models distribute the value of a conversion across each specific touchpoint or channel differently. By analyzing each of the attribution models, you’ll get a better overview and understanding of the ROI (return on investment) of each marketing channel.
Remember that there is no one attribution model that is better than the other. You can always just choose one that you’ll primarily use for reporting and analysis. However, to measure other different factors, such as business goals or buying cycles, another model may be more suitable. Therefore, the model you use will depend on what types of information you want to find out.
The six common attribution models are:
1) First Interaction Attribution
Gives 100% of the credit to the one click or touch your business has with a customer before they instantly convert. This is also known as the very first click.
- Simple and straightforward
- Helpful if you have a short buying cycle
- Great if your main business goal is bringing in new top-of-the-funnel customers
- Ignores effects of other channels after the first touchpoint
2) Last Interaction Attribution
Gives 100% of the credit to the very last click or touch
- Simplest to implement and evaluate
- Most accurate
- Great if you have a short buying cycle
- Helpful if sales funnel is wide at the top and narrow at the bottom
- Ignores every other kind of interaction that happens before the last touch, however all those interactions are just as important
3) Last Non-Direct Click Model
100% of the credit is assigned to a single interaction. However, it eliminates any direct interactions that occur before conversion. By doing this, you can find out what lead your customers to your website.
- More insightful than other models
- Only gives value to one interaction. It ignores every other touchpoint.
4) Linear Attribution
Split all the conversions equally between all the interactions the customer has had prior to conversion.
- More balanced view of marketing strategy
- Easy to explain to clients the value that each channel has
- Assigns equal importance to all touchpoints and will not highlight the most effective strategies
5) Time Decay Attribution
Spreads out the value over multiple interactions, just like linear attribution. However, the difference is that it also takes into consideration when the touchpoint occurred. Interactions closer to the time of conversion will acquire more value, hence the first touchpoint gets the least credit while the last touchpoint gets the most.
- Useful if relationship-building is one of the business’ main focus towards success
- Helping when dealing with long sales cycle
- Minimizes effect of top-of-the-funnel marketing techniques
6) Position-Based Attribution (also known as U-shape attribution)
Splits credit for a conversion between client’s first interaction with the business and the interaction that prompted the conversion. 40% is given to each of the touchpoints and 20% are spread out between all the other interactions that happen in between them.
- Strong model for businesses that have multiple touchpoints prior to a conversion
- Gives credit to every touchpoint, but stronger weights to the most important channels
Have another view, an anecdote that you would like to share, or just a question for the author? Feel free to comment below!