To put it in the simplest way possible, marketing attribution is using marketing analytics to determine which of the marketing tactics your business uses contributes most to sales or customer conversions. In short, what you’re doing right and how you can do it more.
Why is marketing attribution important to your business?
In the past, your customers used to simply see a magazine ad or TV commercial that might encourage them to buy your product. In the digital age, customers interact with your brand in many more ways—most of which are online. With the dizzying variety of modern media, the journey consumers take towards making a purchase is a complex one. From mobile apps to email and text campaigns to social media channels, customers encounter more marketing touchpoints than ever before choosing your brand.
How do you measure the effectiveness of each touchpoint? How do you figure out where you’re successfully funneling customers toward a purchase or where they might be dropping off and abandoning a purchase? Marketing attribution helps you decode the tangled web of the modern customer journey and identify what marketing tactics are driving conversions. By using an effective marketing attribution model, you can find out what elements of your marketing mix are most valuable in closing the sale.
Major trends influencing marketing attribution
With dozens of potential touchpoints, your business needs to have a solid strategy for assessing the ROI of each potential conversion tactic. Consider the many various ways a customer might engage with your business before making a purchase:
- Read blog posts or case studies
- Check out a social media post or story
- A phone call with a sales or customer service representative
- Interact with a mobile app
- Download a resource or lead magnet on your website
- Talk with your team at a tradeshow or event
- Join an exclusive Facebook group
- Read a newsletter or e-blast
- Watch a webinar
- See a display advertisement on a search engine or social media channel
- Download an eBook on a relevant topic
For example, let’s say a customer is interested in buying a new bicycle. They start by searching Google to read up on the latest models and check out reviews from other consumers. They click a display ad and end up on your website. There, they decide to download a free resource on the most important features to consider when buying a new bike. A few days later, they see an ad for your company while browsing Facebook. They remember your brand and click through to your website and finally make a purchase.
It can seem impossible to tell exactly how each element of the marketing mix impacted an individual’s decision-making process. You can’t be inside the customer’s head during their entire purchasing journey. Luckily, there are several marketing attribution models that can help solve the puzzle and glean important insight into the effectiveness of your marketing mix.
Marketing attribution models
Single-touch attribution models
Single-touch attribution models credit a single touchpoint as the most important in closing the sale.
- First-Touch Attribution Model: First-touch attribution assumes the initial interaction a customer had with your brand was the most important. Using this strategy, you give full credit for the conversion to the very first interaction and ignore any other promotions they might have encountered afterward.
- Last-Touch Attribution Model: Using the last-touch attribution model, you assign full credit to the very last interaction the customer had with your brand prior to making their purchase. This is the final interaction they had before clicking the buy button.
Although single-touch models are the easiest to measure, they come with obvious downsides. In the bicycle example, a single-touch attribution model would only count the initial Google advertisement or the final Facebook ad. Single-touch models ignore the intermediate steps like the resource download. To better map the full customer journey, many businesses turn to multi-touch attribution models.
Multi-touch attribution models
A multi-touch attribution model takes all the intermediate interactions into account. There are many ways you can decide how to assign credit to each touchpoint.
- Time Decay Attribution Model: The time-decay attribution model is a weighted strategy that gives credit to every interaction a customer has with your company. Using this model, you give the most credit to the encounters that take place closer to the purchase, but each picks up a little credit along the way.
- U-Shape Attribution Model: In the U-Shape attribution model, you give the most credit to the first and last interactions. U-Shape models also take the intermediate interactions into account but assign less of a percentage of the credit.
- Linear Attribution Model: In the linear attribution model, you evenly assign credit to each encounter. For example, for a customer that had three interactions with your brand prior to making their purchase, you would assign each interaction 30% of the credit.
Multi-touch models are the best way to measure the effectiveness of the entire customer journey. Although more challenging to implement, multi-touch models give a clearer picture of how each tactic of your marketing mix helped influence the final sale.
How to pick the best attribution model for your business
The most important thing to consider when selecting a marketing attribution model is to understand the unique needs of your business. If your marketing strategy relies on one or two promotional tactics, then a single-touch model would be an obvious choice. If you have a prolonged sales cycle that stretches out over multiple months, then the time-decay model might be better for your organization. No matter what model you pick, learning how to track and measure your marketing is critical when it comes to growing your business.
With the many ways customers interact with your brand, it is important to have a grasp on what’s working – and what isn’t. Armed with this knowledge, you can stop wasting money on ineffective tactics and increase your budget on the channels that are most effective in driving sales.