As a company, increasing sales can mean reaching the end goal and funding your campaign goals. However, it is also important to consider where these purchases came from. How did the customer find your brand and what drove them to make this final purchase?
A customer's journey and the steps they took to get to a sale can be as important as where the sale took place. Using attribution models, marketers can assign credits to touchpoints along the consumer's purchase journey. This can provide more insight into which marketing channels are working best to allocate more money and maximize ROI.
With a data-driven approach, a company can leverage the strategic insights to expand the functionality and use its insights for future campaigns.
This is how attribution works
Often times, a consumer's conversion path takes place on more than one device, and they are likely to have encountered numerous different touchpoints prior to making a purchase decision.
Touchpoints can be defined as a series of interactions that a company has with a consumer at any point in its customer journey. These touchpoints can consist of social media, radio, television, email, and other ways where engagement can occur between the consumer and a business.
Attribution models use a set of rules, or statistical models, to assign conversion credits. When it comes to the different types of modeling, there are numerous options that apply to your business.
Individual attribution models only credit one point of contact in a customer's journey, including the mapping of the first and last contact. Meanwhile, multi-touch models explore a customer's full conversion path, which can include positional, linear, temporal, and data-driven mapping.
Today we're going to cover six common attribution models:
- First touch
- Last touch
- Position based
- Time lapse
- Data driven
1. First touch attribution
The first point of contact with which a consumer interacts is credited with 100% of the conversion. No subsequent touchpoints are used to measure success or incrementality. This model is useful for conversion paths with larger attribution windows or when a longer observation period is required. In addition, this attribution model is beneficial when the acquisition of top funnel customers is prioritized.
- A local gym wants to get more memberships for its facility.
- A potential lead discovers the business through a Facebook ad while flipping through their news feed. The person clicks through and signs up for a newsletter.
- Two days later, the prospect receives an email newsletter from the gym, revisits the website, and looks at the membership offers.
- Finally, a day later, the prospect converts and signs up for a membership after running a Google search ad from the gym.
In this scenario, 100% of the credit for the conversion is allocated to the Facebook ad and all other touchpoints are not taken into account. After enough data is gathered, the gym can determine which source the prospect took their first step towards acquiring from and ultimately optimize more dollars for that channel.
2. Last touch attribution
100% of the conversion is credited to the last point of contact with which a consumer interacts. When measuring success with smaller attribution windows (shorter buying cycles or conversions with little return), this model can be useful in determining the value of the last touchpoint. No previous points of contact are taken into account.
- A company is trying to lure the audience to its website to buy a coffee maker.
- A prospect visits the site after viewing a Snapchat ad from the company but does not make a purchase.
- Three days later, the person sees a Facebook ad from the same company, clicks on the website, and buys the coffee maker.
In this case, 100% of the credit for the conversion will be allocated to the Facebook ad and all previous influences of the Snapchat ad will be ignored. The last-touch model helps a company identify the channel that best closes customers.
Most advertising platforms such as Facebook Ads Manager, LinkedIn Campaign Manager, and Google Ads use the last-touch attribution model by default.
3. Position-based assignment
This model is also known as U-shape mapping and takes the full conversion path into account. The first and last contact points are given the highest weight. Middle points of contact are also credited, but with less weight and evenly distributed among each other. This model is useful when you want to understand how a prospect is introduced to a company and how they convert at the end of a sales cycle.
- A customer receives a Facebook ad for an office chair and visits the website to surf.
- A few days later, the customer is served a Google search ad while searching for office chairs but not converting them.
- The next day, the customer visits the website and makes a purchase after being redirected with a Google display ad.
In this scenario, the Facebook and Google display ads each get 40% balanced credit, while the Google display ad, which was the middle point of contact, gets 20%.
4. Linear assignment
This multi-touch model takes the full conversion path into account and credits each point of contact that a customer interacts with equally. Often times, linear attribution models are used for illustration rather than actual measurement of multi-touch performance. This model is beneficial for marketers who want to understand the value of touchpoints that introduce customers to their business, be considerate, and drive conversions. When the goal is to holistically understand a marketing strategy, this model can be used accordingly as a whole.
- A customer spots a company's sweatshirt while viewing a Snapchat ad and decides to visit their website.
- The next day, the prospect is redirected with a Facebook ad and visits the company's website, but doesn't make a purchase yet.
- A few days later, the prospect finally makes a purchase after clicking through a Pinterest ad from the company.
When using a linear attribution model, an equal attribution amount is credited to each of the three points of contact.
5. Time Decay Attribution
Similar to the linear attribution model, the time lapse considers the complete conversion path. Credit is increasingly traced back as a percentage to touchpoints as they near the time of conversion. Initial touchpoints are less credited, while the final interactions earn the most.
This model is helpful in understanding the entire customer journey and provides a realistic representation of how consumers, by interacting with ads, are considerate as they approach a conversion. Additionally, time-decay mapping allows marketers to analyze which channels are the main contributor to the lower funnel compared to top funnel conversions.
- A customer is first delivered a Facebook ad on their cell phone for a t-shirt. You click through and browse the website.
- One day later, the customer receives an email newsletter about the T-shirt.
- The customer then converts two days after clicking through a Google Search ad from the company while searching for t-shirts.
Most of the credit is allocated to the Google search ad, while the email newsletter and Facebook ad each receive fewer credits for their touchpoint positions.
6. Data-driven model
Using platform-specific algorithms, the data-driven modeling includes machine learning based on the estimated incremental value. The credit is allocated to touchpoints that are most important in data-driven modeling, and it is often the most accurate because of its specificity to an organization when compared to other types of modeling. Typically, this attribution model requires a data scientist to analyze and interpret historical data in order to create and manage it. For smaller or newer businesses, this may be a more expensive option. Use of a standard attribution model is recommended.
When choosing different models of attribution, it is difficult to choose one. However, now with an understanding of different models and their loan conversion, the decision should become clearer. There is simply no right or wrong answer, or a glove goes with every solution. The choice of attribution model depends on a company's ultimate goal and marketing campaign.
For companies selling higher value products that require longer sales cycles and more marketing channels, a multi-touch attribution model may be required. This helps marketers understand how a customer was introduced to the business, where they dropped out, what made them come back, and why they ultimately converted.
Companies trying to determine which channels offer them new prospects and contribute to top funnel strategies may opt for a first-touch model. Alternatively, companies looking to figure out which channels are great for closing customers can rely on a last-touch model.
The best advice we can offer is to choose a model that will provide your business with the information it needs to maximize ROI, taking into account your touchpoints and sales cycle.
If you're interested in taking your campaigns to the next level, let's chat. We are here to help!