Attribution models are an essential tool for understanding which marketing efforts are working best for a company as well as for identifying areas for improvement. This article explores what an attribution model is, what types of attribution models exist and how they can be used in digital marketing.
One of the most important parts of digital marketing is understanding what is driving a company's sales. In this regard, attribution models are an essential tool for understanding how different customer touchpoints influence consumers' purchase decisions.
Conversion attribution is a critical topic in digital marketing and has been a constant discussion for marketers for years.
What is an attribution model in marketing and what is it for?
An attribution model is a marketing technique used to assign a representative value to the different touch points involved in a conversion or sale. Thus, "attribution" is the credit given to a conversion or a sale in a specific marketing channel.
The goal of attribution models is to establish which marketing channels and actions are generating the greatest impact in terms of generating conversions or sales.
In other words, attribution models seek to answer the following question:
- "Which strategies and/or tactical marketing actions provide the highest return on investment (ROI)?"
Attribution models date back to the early days of online advertising and advertisers' desire to find out which ads were generating the most conversions.
Today, attribution models are an essential tool for measuring the return on investment (ROI) of marketing campaigns, as well as for optimising advertising spend, as they allow marketers to understand the weight of each of their touchpoints in terms of lead generation, conversions and sales.
Attribution models, on the other hand, enable a deeper understanding of the customer journey, the customer experience and the customer buying process, helping marketers make informed decisions on how to allocate their marketing budget.
Before delving into the different attribution models, it is important to understand what a touchpoint is.
What is a touch point?
A touch point is any interaction that a customer has with a company that influences their purchasing decision.
In marketing terms, by touch points we mean both the channels or media through which customers interact with the company, but also the strategic contents that take place there.
The analysis of an organisation's touch points is an important part of the marketing strategy, as each of the touch points of the customer experience has influence on the consumer's purchasing decision. It is therefore important for companies to have all their touch points well defined and accounted for, and to frequently analyse the role of each and every touch point in generating conversions and sales.
Touchpoints can also be used to measure the success of a marketing campaign. For example, a marketer can measure the success of an email marketing campaign by measuring the open rate and click-through rate, or measure the success of a social media advertising campaign based on the number of interactions and conversion rate.
In many cases, companies are only aware of those direct, internal touch points that have been created by the company itself. However, today, especially in the digital world, there are many external touch points that also have an impact on the customer journey.
Top attribution models in marketing
Originally, the "last-touch" model was widely used as the default attribution model, meaning that the conversion was attributed only to the customer's last touch point prior to purchase.
However, as advertising campaigns became more complex and customer touch points multiplied, it became clear that the last-click model did not provide a complete picture of the purchase process. Marketers therefore began to develop more sophisticated attribution models to better understand the contribution of each touchpoint.
There are several different attribution models that companies can use. Let's explore the ones most used in marketing.
Last-touch attribution model
This attribution model assigns all credit to the customer's last touch point before purchase. It is the simplest and easiest model to implement, but can provide a biased view as it does not take into account the other touch points that may have influenced the purchase decision.
First-touch attribuion model
The first-touch attribution model assigns full credit for a conversion or sale to the customer's last interaction with the company. This model can be useful for understanding how customers first discover a brand, but does not necessarily reflect the influence of other touch points in the buying process.
Linear attribution model
Linear attribution models divide the credit for a conversion or sale among all customer touch points prior to purchase. This model is useful for understanding how different touch points contribute to a customer's purchase decision, but may not be accurate if some touch points are more influential than others.
Time Decay attribution model
This model gives more credit to touch points that took place closer to the date of purchase. This model takes into account the importance of time in the purchase process, but does not take into account the importance of each touchpoint. In other words, it is a useful model for understanding how touch points change over time and how marketing strategy should be adjusted accordingly.
U-shaped multi-touch attribution model
This attribution model gives more credit to touchpoints that are closer to the purchase, but also gives some credit to touchpoints that are further away from the purchase. This model takes into account both the time and importance of each touchpoint in the purchase process.
Data-driven attribution model
The data-driven attribution model uses algorithms and data analytics to assign credit to each touchpoint based on its impact on the conversion or sale. This model is the most comprehensive and accurate, as it takes into account the influence of each touchpoint on the buying process, as well as its timing. However, it can be more difficult to implement than other attribution models.
Personalised attribution model
The personalised attribution model can be understood as a combination of all the other models since it takes the best part of each one of them and is specifically designed to address a company's needs and objectives. This model can be useful for companies that have a unique buying process or want to emphasise certain touch points.
How to choose the right attribution model
Choosing an attribution model depends on several factors, such as the type of business, customer behaviour and marketing objectives. Simpler attribution models, such as last-click or first-click, can be appropriate for businesses that have a simple and direct buying process and do not require a complex marketing strategy.
More advanced attribution models, such as data-driven or personalised attribution models, are more suitable for companies that have a complex buying process or that want to understand customer behaviour in depth. However, these models can be more difficult to implement and may require more resources.
It is important to remember that no attribution model is perfect and that each model has its advantages and disadvantages. Therefore, it is advisable to test several attribution models and use the results to optimise the company's marketing strategy.
Attribution models are an essential tool for understanding how different customer touch points influence a customer's purchase decision. There are several attribution models available, each with its own strengths and weaknesses. It is important to remember that no attribution model is perfect and that it is advisable to test several models to optimise your company's marketing strategy.