It used to all be so simple. A consumer would become aware of a brand through traditional means: driving past a billboard, hearing a radio spot, or seeing a commercial. But with the democratization of the digital space, reaching consumers and marketing in and of itself has drastically changed.
Consumers now live in a world where they’re inundated with digital ads everywhere they work, live, and play online — adding complexity to a once linear customer journey. This complexity makes it incredibly challenging to find out which marketing initiatives and channels are contributing to the bottom line. The need to understand how to allocate budget and resources brought attribution and attribution modeling into the digital marketing lexicon.
An Introduction to Attribution Modeling
Attribution modeling is the process by which a brand credits conversion value across multiple touchpoints. These customer journey intersections allow marketers to define their most successful channels clearly, and also allows for tons of optimization, especially when dealing with multi-channel funnel attributions. With the recent addition of multi-channel funnel tracking, proper attribution modeling has become an essential characteristic of conversion-based marketing strategies.
Issues With Traditional Attribution Modeling
Attribution modeling really started as a way for large data companies to acquire conversion data from websites. When Facebook or Google (and many others) land visitors on a website, they use tracking scripts or pixels to attribute revenue (and the credit of a conversion) to their consecutive analytics systems. This creates a data disconnect because each platform wants to credit themselves with the conversion, often leading to data diffusion or inaccurate reporting.
This inaccuracy keeps companies from efficiently regulating spend, and also attributing conversion values to the right source/mediums. One of the methods of correcting this disconnect is using an attribution model that is designed with a brand’s conversion path in mind. Attribution models assign different weights to the touchpoints within each customer journey, but which touchpoints they assign a value too is determined by the model. For example, a last-click attribution model gives 100% of the credit to the last touchpoint before a customer converts, whereas a linear attribution model’s credit is distributed evenly across all touchpoints.
Your website holds the ultimate authority in conversion reporting, since the desired interaction takes place there, externally from any of the tracking scripts of other companies. By weighing the conversion value of different parts of your funnel, you can more effectively target top-, mid-, and low-tier funnel conversions throughout your marketing stack.
Types of Attribution Models
While there is an extensive list of different models (and there is lots of information about defining your custom models), most brands fall into three basic categories: last-click, position-based modeling, and linear attribution modeling.
Last-Click Attribution Model
Last-click attribution modeling was the default of Google Analytics since its inception and has been depreciated over the last several years. It attributes all the conversion value to the last touchpoint of the customer journey. This does not provide any multi-channel value and generally is to be avoided in your advertising since it doesn’t take into account the rest of the customer journey.
Position-Based Attribution Model
Position-based attribution modeling works best for most lead-based businesses. This model attributes conversion value to the first and last interactions most heavily while sharing a small percentage among the mid-funnel touchpoints. Position-based is excellent because it allows you to break up conversion events into several different pieces, giving a more clear picture of your conversion drivers.
Linear Attribution Model
Linear modeling is used when companies are less concerned with ROI and want to drive conversions at any cost. This model values all aspects of conversions equally, allowing rapid growth companies to scale quickly.
Utilizing the right attribution model for your business will help increase your conversion efficiency, drive more revenue, and accurately forecast the marketing activities that will move the needle for your business.
Moving Forward with Attribution Modeling
So where do we go from here? Currently, these attribution models all have a critical flaw: they’re designed to give significant data control of your attribution cycle to third parties. Since the data isn’t based on your website interactions, it can be incredibly challenging to get a clear understanding of the conversion process.
A great example of this is Google Analytics. When you track referral sources directly from your website, Google is defined as one referral source. When you are using their platform for analytics, they split their referral sourcing into several channels: direct traffic, referral traffic, organic traffic, and paid traffic.
The future certainly includes analytics tools that help clarify the attribution process, giving a clearer picture of conversions to marketers. Digital marketing agencies (like Giant Donut Marketing) can help by effectively analyzing all website interactions and marketing channels, without the need for third party data. That last part is especially crucial. If your website is the ultimate source of truth, getting accurate information will be much easier.