If the marketing definition of “attribution” confuses you, you’re not alone. While you may have a basic understanding of what attribution is — assigning credit to a marketing touchpoint for a conversion — the influx of marketing channels and devices has complicated the meaning. So, what does attribution really mean? To fully understand it, let’s delve into why it matters to your business and explore how attribution has evolved from single-touch attribution.
Attribution is the process of assigning credit or value to a marketing touchpoint — in other words, it measures the impact each touchpoint has on your desired outcome, be it a sale, a download, or an account sign up. This gives you insight into campaign trends, which channels you should invest in, and much more.
An attribution model is the set of rules that determine the value of an interaction or touchpoint in several different scenarios. By applying these rules to various activities, and comparing the value that each activity returns against the amount it costs to deliver, you can identify the return on investment (ROI) from each of your digital marketing channels and campaigns.
The Debut of Attribution
Marketing mix modeling (MMM) used to be all the rage. It’s a technique that leverages regression analysis to provide a “top-down” view into the marketing landscape. It offers high-level insights and helps allocate budget to several types of media such as digital channels, television, print, radio, etc.
However, there are many flaws with MMM — it’s slow to get results, fails to measure brand equity, and doesn’t optimize message and targeting. And as the consumer landscape shifted toward digital-first, marketers began to see a need for more than just high-level measurements. That’s when marketing attribution made its debut in the form of single-touch attribution.
The Problem with Single-Touch Attribution
Single-touch attribution models assign 100% of conversion credit to only one marketing touchpoint. Here are some of the single-touch attribution models:
- Last touch: This model assigns 100% of the credit to the last marketing touchpoint before conversion.
- Last click: This model assigns 100% of the credit to the “last click” before conversion.
- First touch: This model assigns 100% of the credit to the first marketing touchpoint (the channel or activity that acquired the contact).
- First click: This model assigns 100% of the credit to the “first click.”
For example, maybe a customer completed an inbound form, attended a webinar, and replied to an email campaign where they accepted a sales meeting. If you’re using the last touch model, the email campaign will get 100% of the credit.
These models, while undoubtedly popular once upon a time, no longer make sense because consumers are now exposed to a vast number of different sources (touchpoints) — social media ads, email marketing ads, or even billboards — before they make a purchase.
The customer journey is changing and spans many devices— it takes up to 56 touchpoints before a conversion takes place. This is why it’s especially important to assign proper credit to each touchpoint so that marketers can determine where budget spend should go.
Cue multi-touch attribution. If your marketing mix goes beyond a single channel for different objectives, such as to re-engage and convert, multi-touch attribution gives you a complete view of the customer journey — it assigns a value to each customer touchpoint and shows you which actions have the most impact on conversions.
There are rule-based multi-attribution models and statistical (data-driven) multi-attribution models. Examples of rule-based models include the U-shaped model, which gives 80% of the credit to the first and the last touchpoints, and 20% is doled out to the middle. Or, there’s the time decay based model, where the least credit is given to the first interaction, and the last interaction receives more credit. (For a list of the most common multi-attribution models, read more here). In contrast, statistical models use algorithms to credit conversions instead of rules.
If none of those models work for your business, you can even create a custom attribution model that combines features of standard models. The possibilities are endless — there’s an attribution model for every step of your business. You just need to do your research to discover which model works best for you.
Recognize That All Models Are Flawed
Attribution is complicated, especially if you take into account all online and offline influences, various devices, and even brand awareness campaigns where display ads are measured by impressions instead of clicks.
It’s essential to understand that attribution is a journey, often one where a lot of flawed methodologies, rules, and data are introduced. However, any step towards better attribution modeling can have a meaningful impact on reducing wasted marketing spend.
Why Attribution Matters
Attribution isn’t 100% accurate, but if you’re blindly running your campaigns and not measuring anything, you’re essentially navigating in the dark.
Attribution doesn’t just show you where to spend your marketing dollars — it also allows you to find the perfect balance of channels to guide customers from the first touchpoint to their first conversion, and all the way until they’re considered loyal customers.