Marketing Attribution: What You Need to Know

For those looking to enhance their marketing efforts, marketing attribution is essential. Learn all about it in this blog post.

Marketing Attribution: What You Need to Know

It isn’t uncommon to struggle with your digital marketing efforts in terms of metrics that focus on the bottom line and return on investment. 

In fact, less than one-quarter of marketers feel confident that they are indeed tracking the right Key Performance Indicators (KPIs).

This is where marketing attribution comes into play. It helps marketers and businesses connect the dots between numerous customer touchpoints and the conversion.

Just under 60% of marketers currently make use of a marketing attribution model. This number is expected to increase to 78%.

Below, we will define marketing attribution, look at why it’s important, examine the different attribution models, and address some of the most common struggles faced with using an attribution model.

    What is Marketing Attribution?

    Marketing attribution can be defined as the practice of assessing marketing touchpoints that customers encounter on their purchasing journey

    The goal of marketing attribution is to identify the channels and message that have the highest impact on the customer’s decision to take the next step in the journey or make their purchase.

    It is unlikely that a customer would come directly to your website and proceed to make a purchase. 

    There are often numerous messages and channels involved in a customer’s final purchasing decision, such as an email, Facebook advertisement, blog post, etc.

    Why is Marketing Attribution Important?

    Marketing professionals tend to find it difficult to prove their value. It isn’t uncommon to be asked what your ROI is. 

    Now, while ROI is one of the best metrics to help you truly understand how marketing is positively or negatively impacting your business, it is a metric that is not always easy to get your hands on.

    For instance, if you have recently made updates to a page on your website, you may see an increased number of leads following the update. 

    Is this traffic related to your design changes, or is the increase in traffic simply the result of your SEO efforts? Or maybe it is something else entirely.

    Without knowing this information, you cannot effectively and accurately calculate your marketing return on investment. 

    That’s where marketing attribution comes in by helping you to avoid common issues that keep you from calculating your ROI properly.

    Marketing attribution makes it easier to find out where, how, and why customers made the decisions they did along their buying journey. 

    Basically, the main goal of marketing attribution is to provide you with basic data that lets you see the bigger picture of what is and isn’t working. 

    This allows you to optimize your marketing efforts, leading to more efficient work, lower costs, and higher return on investment.

    What are the Marketing Attribution Models?

    There are 6 models that you need to know.

    1. First Interaction

    First Interaction (or first-click) gives full credit to the initial interaction with the customer. 

    For example, if the customer comes across your business on Instagram, then that social media network receives 100% of the credit for any sale that takes place afterward.

    This is true even if the customer came across your website on Instagram and then a week later clicked on an advertisement before later that day visiting your website directly. 

    Instagram, or whatever the first point of contact is, gets all of the credit.

    This model is simple and straightforward, which is why it is often chosen. It is great if you have a short buying cycle and you want to focus on immediate conversions

    However, this model fails to consider later interactions that may play an important role in the customer’s conversion.

    2. Last Interaction

    Commonly referred to as last-click or last-touch, the last interaction attribution model focuses on the very last interaction that a lead had with your business before they converted. 

    This model provides full attribution credit to the very last customer touchpoint. No previous engagements are taken into consideration.

    For instance, let’s say a web user finds your website through an organic search. A few days later, they decide to click on a Facebook Ad. They haven’t made a purchase yet. Instead, they wait until the next day to go directly to your website and convert.

    In the last interaction model, 100% credit would go to the direct traffic. While the customer did click on the Facebook ad, their purchase was made after directly visiting your website.

    The great thing about this particular model is that it is easy to identify where credit is due. It is by far the simplest model to implement. 

    In fact, Google Analytics uses this model. It is also one of the most accurate since it is almost always possible to track the last interaction before a purchase, regardless of the channels used throughout the buyer’s journey.

    Unfortunately, because this model does not account for previous interactions (think website visits), you may miss out on valuable marketing insights. 

    More often than not, those prior interactions are just as important as that last interaction that resulted in the conversion.

    The last interaction attribution model serves as an excellent tool when there are minimal touchpoints with a short buying cycle.

    3. Last Non-Direct Click

    This particular attribution model can prove to be a bit more beneficial than the aforementioned last-click model. 

    While it is true that full value is still assigned to only one interaction, this model removes any direct contacts that may occur prior to the conversion.

    Direct traffic refers to anytime a customer clicks a bookmarked link or manually enters your website URL. These individuals are already familiar with your brand.

    When you focus on the last non-direct click, you will be able to better identify what action led that customer to convert. 

    It tends to be slightly more insightful than the last interaction, but the problem is that 100 percent of the value is assigned to a single interaction.

    4. Linear

    This attribution model requires that you split conversion value equally among all customer interactions prior to their conversion. 

    Therefore, let’s say a customer finds your business on Pinterest and subscribes to your newsletter. They click on a link inside your newsletter a few days later, and then visit your site directly a week later when they make a purchase.

    This equates to three separate customer touchpoints. Therefore, each touchpoint will be assigned 33% value.

    Ultimately, this model offers a clearer picture of your marketing efforts than single-interaction models do. However, it assigns equal value to all touchpoints, which can be an issue when some strategies can be more effective than others.

    The linear attribution model is straightforward and can show how each marketing channel is valuable.

    5. Time-Decay

    This attribution model is very similar to the linear model, as equal value is given to multiple interactions. 

    However, this model considers when each customer touchpoint occurs. 

    More value is given to the interactions that occur closer to the conversion. Therefore, the initial interaction receives the least amount of credit, whereas the final interaction will receive the most value.

    This can be a beneficial attribution model if your business relies heavily on building relationships. 

    This model does minimize marketing techniques at the top of the funnel, so it is best used for longer sales cycles like B2B purchases.

    6. Position-Based or U-Point

    The position-based attribution model, also referred to as U-shaped attribution, splits the value of a sale between the first interaction and the last interaction when the conversion occurs.

    40% value is assigned to both the first and last interaction, while the 20% remaining is split between all other interactions. 

    So, if there are four total interactions, each of the middle interactions receives 10% value.

    This is a very effective model for various forms of business that encounter multiple touchpoints before the conversion actually occurs. 

    Each interaction receives some amount of value no matter what. However, the two most important interactions — the first and the last — are given the most value.

    3 Common Challenges with Marketing Attribution

    Although there are many benefits to reap with marketing attribution, there are also some challenges and mistakes that may result in you steering off course. 

    Let’s take a look at a few of the biggest challenges that tend to be encountered.

    #1: Connecting Online and Offline Marketing Efforts

    Most marketing attribution models focus on collecting online marketing channel data. Unfortunately, they don’t take into account any offline marketing that has been performed. 

    As a result, you have inaccurate marketing results and a significant gap in your overall reports.

    #2: Correlation Bias

    It has been said that attribution can be biased, which means inaccurate predictions. 

    For instance, when taking a closer look at the buyer’s journey, it may appear that one event occurred as a result of another when it possibly did not.

    However, as a general rule, marketing attribution offers very clear, unrefined data. Attribution may not want to be used for all situations, but it is a great starting point when you need to see the clearer picture.

    #3: Brand Perception and Consumer Behavior

    Some attribution models may overlook the relationship that exists between brand perception and consumer behavior

    It is imperative that you become familiar with how your attribution models detect and identify this relationship. Otherwise, you may make decisions that devalue the building of the brand.

    Wrap Up

    Numerous marketing tools, including attribution models, need to be used in order to obtain the most reliable insights. 

    Marketing attribution itself begins with focusing on your buyer’s journey and what contacts your brand can have with customers. 

    The aforementioned models can give you valuable insights and a look at the bigger picture.

    Marketing measurements are important to your overall success, so check out our Marketing and Sales Team Performance Tracker to learn more about measuring some of your most common marketing goals!


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