If your understanding of marketing attribution is cloudy, don’t worry you are far from alone. Many digital marketers & traditional marketers feel at sea when it comes to attribution models. In this article we throw you a life ring and help you find your feet when it comes to marketing attribution.
Attribution as a whole relates to the business of assigning credit to a marketing channel. Before we get into the nitty gritty of it all, let’s firstly clear up some of the digital marketing jargon your likely to come across during this piece.
First off...
Conversions
If I had a penny for every time I have been asked to explain what a conversion is, I certainly wouldn’t be sitting here writing an article on attribution. Essentially, a conversion is any customer action which you can define as being profitable for your business.
A conversion can be anything you deem valuable for your company, from an email sign up to an online transaction. Conversions generally take two forms – micro or macro. Micro conversions contribute to the buyer journey and helps buffer a potential customer through your sales funnel. Macro conversions, on the other hand are the ultimate action you want your customer to take, i.e. request a quote, call your business or complete an online transaction.
Metrics
Secondly some metrics. Return on ad spend (or
ROAS) and cost per acquisition (or
CPA).
Return on ad spend boils down to the amount of money a company receives for every euro spent on an advertising source i.e. spend €100 advertising, receive €1000 in revenue.
Cost per acquisition or cost per conversion relates to the amount of money a company spends to generate a conversion action. i.e. Spend €10 and gain 1 email sign up or generate one call.
Now that we have cleared that up, let’s examine what exactly attribution is and how these elements play a role...
Attribution is the process of assigning the credit for these micro & macro conversions to a marketing channel or set of channels, offering greater channel insight for marketing professionals. Doing so, can help optimise budgets, spend and even refine marketing efforts to drive an increased return on ad spend and lower cost per acquisition.
Sounds great right?
Now that you have a basic understanding of what “attribution” is let’s examine it a little closer.
There are a range of different models when it comes to attribution. Each model assigns credit differently to various channels used by a customer leading up to a conversion. These models can be categorised into
last click or
last interaction,
first click or
first interaction, linear, time decay or
position based. Don’t fret if you’ve never heard of these models, we are going to examine each one closer. For each of the following we are going to use the following customer journey as an example.
Customer Journey
Monday – Clicks Facebook Ad
Tuesday – No Action
Wednesday - Clicks Google Search Ad
Thursday - No Action
Friday – Clicks Google Shopping Ad & Converts
• Last Click Attribution
Last click or last interaction attribution model assigns the credit for the conversion the very last touch point used by the customer. Applying the last click attribution model to the above example would assign all the credit to the Google Shopping Ad click and nothing elsewhere. Has its limitations, right?
• First Click Attribution
First click attribution performs in exactly the same manner as last click attribution, however in this case all the credit would be assigned to the first click that brought the customer your website. In the example above, this would mean your Facebook campaign would be assigned all the credit for the conversion, and why shouldn’t it, after all this is how the customer first found your website. But if you weren’t using Google Search ads or Google Shopping would that customer have bought from you or a competitor?
• Linear Attribution
The linear attribution model could be described as a fairer attribution model. In this instance it assigns credit equally among all touch points that led to the conversion. In the example given above, this would mean that 33.33% of the credit would be assigned to each of the three campaigns that contributed to the overall sale.
• Time Decay Attribution
Utilising a time decay attribution model gives greater emphasis to the clicks closer to the conversion. Essentially this model reduces the value of the first click and assigns greater credit to each subsequent click with the final click being assigned the most credit. In the example above, 60% would be assigned to the Google Shopping Campaign, 30% to the Google Search Campaign & 10% to the Facebook Ads Campaign.
• Position Based Attribution
Position based attribution assigns credit to the first and last clicks primarily, and divides the remaining credit among touch points throughout the customer journey leading to conversion. Essentially this attributes the most credit to what brought the customer to your site initially, and what ultimately led to their conversion and minimises the value of any intermittent marketing channels. In the above example 40% of the credit would be assigned to the Facebook Ads Campaign & 40% assigned to the Google Shopping Campaign, while the Google Search Campaign would receive 20% of the credit.
Each attribution model has its own pros & cons and grasping the concept can prove quite tricky initially.
When it comes to choosing an attribution model that’s right for your business, understanding your customer journey is key. If you are retailing a high ticket item, customers tend to spend much longer in the research and evaluation phase and so may visit your website numerous times before converting. In this instance, each touch point had a role to play in convincing the customer, so a linear or time decay model is most appropriate.
On the other hand, if your customers journey to conversion is quite short, and their overall spend is low, it is likely they will move to research and evaluation phase quite readily suggesting a last click or position based attribution might be most appropriate.
While attribution is a rather complex, multifaceted topic, if you take away one thing from this article let it be this –
no attribution model is perfect. Despite your best efforts, every model has is shortcomings and the pursuit of perfection can lead to unrestrained hair pulling and sleepless nights.
To quote
Scott Rayden of Marketing Land
“The secret of mastering attribution is knowing when good is good enough.”
Thankfully, from an introductory perspective, Google Analytics can help you gain understanding in the role each of your marketing channels plays in your overall performance. It even has built in attribution models and
a comparison tool so you can see just how each channel performs under each model. Getting to grips with these models and other analytics reports you could be using can and will help you optimise your online marketing and drive greater return
