In today’s ultra-competitive e-commerce world, brand marketers need to leverage every available tool to ensure that campaigns engage and connect with audiences. With so many channels to manage and grow, it can be difficult to sort through the information and gather data that accurately reflects how consumers interact with the conversion funnel. Where do customers first engage with your brand? How do they discover the products they purchase? Which marketing channels work best for your high-value customers? Choosing the right marketing attribution model will answer those questions and help you craft effective campaigns for customers who are ready to convert.
For more from our attribution series:
Attribution Modeling: What It Is & How to Use It
Why First-Touch and Last-Touch Attribution Are Out of Style
Designing a Multi-Touch Attribution Model
A Beginner’s Guide to Data-Driven Attribution
What Is a Marketing Attribution Model?
Marketing attribution is the process that marketers use to assign credit for conversions among various marketing channels—social media, email, display ads, organic search, chat, and others. Given the wide variety of brands and products in the e-commerce world, there are a number of marketing attribution models available, all of which seek to accurately map customers' interactions with touchpoints. With the right attribution model, you can understand which parts of the funnel directly impact consumers' purchasing decisions. Some models give more credit to the beginning of the customer journey, while others emphasize later touchpoints, or spread credit evenly across the conversion path.
Without marketing attribution, it can be difficult for marketers to make informed decisions about where they devote their ad resources and creative energy. To optimize ad spending and boost ROI, brands need to identify the channels and marketing tactics that most effectively engage the target audience and generate revenue. If your brand is only using each channel’s built-in analytics—such as Google or Facebook, which only review their own data—you’re missing the full picture (see how cross-channel attribution works with AdRoll). Without an understanding of the full process, your brand could be wasting money on channels that don’t deliver results.
6 Essential Marketing Attribution Models
In a nutshell, there are three types of attribution models: single-touch model, rule-based multi-touch model, and data-driven or algorithmic model.
Single-touch attribution models assign 100% of conversion credits to a single touchpoint. Last-click and first-clicks are two commonly used models in this category:
- Last-click: Assigns total credit for the conversion to the last touchpoint before the customer made their purchase. Last-click modeling is the default option in Google Ads.
- First-click: Assigns total credit for the conversion to the first touchpoint in the customer’s journey.
Rule-based multi-touch attribution models assign conversion credits across multiple touchpoints using a predefined rule. Here are the three commonly used models in this category:
- Linear: Assigns equal credit to each touchpoint in the customer’s journey — if they interacted with four touchpoints before making a purchase, each touchpoint would receive 25% of the credit for that conversion.
- Position-based: This hybrid attribution model splits a large majority of the credit for a sale between the first and last touchpoints, spreading the remainder equally across any touchpoints that came between. Position-based attribution is also known as U-shaped attribution for this reason. Google Ads assigns 40% of conversion credit to the first and last touchpoints by default, but most marketing attribution tools will allow you to adjust the parameters to suit your brand.
- Time-decay: Assigns credit by favoring more recent touchpoints above ones that came earlier in the customer journey. This means that each touchpoint’s value is reduced as the time between that touchpoint and the final conversion grows. This is a useful attribution model for businesses with a long buying cycle or customer journey.
Data-driven or algorithmic attribution models use machine learning technology to create a custom model for each business:
- Data-driven or algorithmic: Weighs credit for a conversion according to your brand’s own customer journey data. Marketers can create custom attribution models that reflect how the brand’s customers experience their marketing funnel.
How to Choose a Marketing Attribution Model for Your Brand
The best way to choose a marketing attribution model is to think carefully about every aspect of your brand. What’s your target audience? How many channels do you use? Are you just starting your brand, or are you looking to grow your audience through lead generation?
Let’s review some common scenarios for e-commerce businesses and recommend the best marketing attribution models for each.
- Established brand markets across five or more channels and seeks to generate new leads: In this case, first-click modeling can be useful for determining where most customers enter the conversion funnel, allowing you to identify the tactics that generate initial consumer interest. However, since this brand utilizes several channels— perhaps email, Google Ads, live chat, Facebook, and Instagram — there may be too many touchpoints for first-click to offer an accurate picture. In this case, data-driven attribution would be effective, since this established brand already has robust customer engagement data from several channels.
- E-commerce newcomer with only a handful of products and limited channels: For new brands looking to get started on the right foot with attribution, the go-to model is often last-click, since it can identify the moment where the customer decided to make the purchase. That’s a valuable piece of information for a new brand that’s testing out marketing tactics on a new target audience, especially if the brand is only using one or two channels.
- E-commerce brand struggling to identify weak channels: This is where attribution can help you streamline your ad spending. Linear attribution is useful for visualizing every touchpoint in the customer journey, allowing you to see how customers make their way through your digital ecosystem. If certain channels aren’t bringing customers to your products, it might be time to change your spending.
- E-commerce brand with a short buying cycle: If your brand offers a simple product that doesn’t require a great deal of complex decision-making, position-based marketing can help you identify your two most important touchpoints: the first and the last.
What To Do Once You Choose an Attribution Model
Once you’ve selected one or two marketing attribution models that will work for your business, consider your options for adopting a marketing attribution platform where you can review and manage all of your data in one place. Choose an attribution tool that will let you use several models or build your own data-based parameters. This will help you sort through the attribution information you’re collecting and find the most effective ways to optimize your marketing strategy.
Last updated on September 22nd, 2023.