Marketing attribution is essential to understanding how consumers arrive at their purchasing decisions. With accurate attribution, brands can better-determine what motivates their customers to engage with their brands at each step of the buyer's journey. Through this process, brands learn what aspects of their marketing approach are most effective. Marketers are then able to refine their strategies by reallocating resources to the most rewarding channels.
In this article, we’ll explore marketing attribution models, how they work, and how marketers can use them to analyze and improve their creative and messaging strategies across marketing channels.
Basics of Marketing Attribution
Let’s start with the big question: What is marketing attribution?
Simply put, it’s a way for brands to evaluate their customer journey and find which touchpoints in the marketing funnel are most impactful for their target audience. Marketers will analyze data from different channels, campaigns, and customer touchpoints to assign credit for each digital purchase or conversion. In today’s fast-paced, complex commercial landscape, deciding how to allocate credit can be challenging, especially since omnichannel marketing necessitates an ever-growing list of channels.
The goal of marketing attribution is to help marketers and their managers make more effective budgeting decisions based on success rates. If a company understands which marketing efforts are responsible for revenue growth, it can redirect resources, optimize ad spending, and maximize ROI.
What is a marketing attribution model?
To get an accurate picture of how marketing strategy impacts potential customers, it’s essential to decide how to assign credit between various marketing channels. A marketing attribution model is the set of criteria or rules that determines which channel gets credit for a sale and which touchpoint has the most impact on the consumer.
Marketers have developed a range of attribution models, each with its own way of assigning credit to touchpoints along the conversion funnel. Some focus on single data points from the customer journey. Others attempt to create a more detailed, nuanced picture by spreading credit across multiple touchpoints based on a set of predetermined variables.
Types of marketing attribution models
Several marketing attribution models can be adapted to collect data for a wide range of businesses. Each model has advantages and disadvantages, depending on the nature of the enterprise.
This attribution model assigns credit to the touchpoint that first connects the consumer with the brand—the moment when a marketing activity generates a fresh lead. The action doesn't need to result in a purchase to be counted. Instead, a credit is assigned upon conversion, when the user completes an action on the website. This model integrates well with Google Analytics. However, it can also overstate the importance of certain channels by only accounting for the first click.
You can probably guess how last-click attribution works. This model assigns credit to the last touchpoint that the consumer interacts with—the step that leads directly to the conversion. This approach helps brands learn which channels promote the final purchasing decision. It’s often the first model that marketers use when evaluating their strategies, but the approach can be too simplistic, overlooking previous channels and messaging that impacted the customer along the way.
For marketers that have robust data on their audiences and how they interact with marketing channels, multi-touch attribution is often the most effective marketing attribution model. It assigns credit across all channels with which your customer interacted on their way to making a purchase. Here are several popular approaches that determine how to weigh the final attribution:
- Linear attribution: Distributes credit evenly across each touchpoint in the funnel.
- Weighted attribution: The most common form of weighted attribution is the U-shaped variety, which assigns 40% of conversion credit to the first and last touchpoints, with the remainder divided among the touchpoints in between.
- Time-decay attribution: Gives more credit to touchpoints later in the conversion process. The last touchpoint before a conversion receives the most credit, and the share of points decrease steadily as you move toward the beginning of the funnel.
Data-driven attribution takes another step forward from the rule-based multi-touch attribution models. Rather than using a predefined model to assign credits to each touch-point, data-driven attribution uses machine learning technology to create a custom model for each business by using data that reflects the actual customer journeys. It helps marketers to better understand how customers interact with the brands across various channels and marketing programs, and how each touchpoint attributes to conversions.
How do you measure marketing attribution?
The best approach to measuring the effectiveness ad campaigns and marketing tactics depends on the type of business. Other variables, such as length of conversion cycle, also play a role in the decision. Before implementing a marketing attribution tool, brands should create a map of the customer journey and decide which metrics will be most useful for gauging ROI.
Some entities, like B2B brands, may find that newsletter subscriptions, file downloads, and event attendance are more useful as conversion metrics than pure sales conversions, which may occur infrequently. Purchases are a common metric for measuring marketing attribution for B2C brands that process large numbers of conversions every day. The best marketing attribution model will focus on a brand’s goals and will clarify how to invest marketing dollars more productively.
What is attribution tracking?
Attribution tracking is another term for marketing attribution. It's the process of evaluating the consumer journey to determine which marketing channels and tactics are effectively reaching customers and spurring sales.
What is an attribution tool?
Most businesses and brands deal with large amounts of customer data related to various touchpoints in the sales cycle. An attribution tool will help to make sense of that data and accurately assign credit where it's due. It’s critical to choose an attribution tool that’s fits for your business goals and processes.
The ideal attribution software will integrate with CRM systems, enabling marketers to easily review results, interpret data, and develop more effective ad spending strategies. Google Analytics offers simple attribution tracking, but other tools can perform more advanced analyses and provide custom attribution models. Many attribution platforms will also integrate with email marketing tools and social media analytics to provide greater detail and enable more informed decisions.