Marketing attribution models help marketers get insights into their marketing efforts, further prompting them to restructure their strategies. Here is everything you need to know about marketing attribution.
Imagine the money and time wasted on a marketing campaign that could have been more effective. There are lost opportunities to convert the potential lead into a customer. This is a terrifying scenario for brands and their marketing teams.
A survey revealed that 81% of businesses have yet to progress toward or achieve their digital business transformation goals. Here is where marketing attribution models come into roleplay.
They help marketers to get insights into their marketing efforts, further prompting them to restructure their strategies. However, choosing a suitable marketing attribution model and its associated tools varies depending on the goals and preferences. Let’s delve deeper and understand everything about the marketing attribution model and criteria to pick the right one.
What is marketing attribution and its KPIs?
Marketing attribution is a systematic approach for giving conversion credits to specific marketing channels and touchpoints customers encounter during the purchase journey. It enables brands to identify marketing strategies that have contributed effectively to sales or conversions. Enlisted below are a few KPIs (Key Performance Indicators) for assessing the success of marketing efforts:
- Conversion Rate for analyzing visitors who come to a website page and take desired actions, such as form completion, e-book downloads, or making a purchase
- Customer Acquisition Cost (AQC) to monitor the money spent in onboarding a new customer
- Return On Investment (ROI) to analyze the ratio of generated revenue from the marketing efforts to the cost of those efforts
- Customer Lifetime Value(CLV) to determine and predict customer’s overall relation with the brand by projecting net profit
A quick overview of various popular marketing attribution models
First-touch Attribution Model
In a first-touch attribution model, 100% of the conversion credit is assigned to the first marketing channel a customer interacts with. In simple terms, if a customer first finds a service or product on Pinterest, then Pinterest gets all of the credit for any sale after that interaction. It doesn’t matter if the client clicks on the FB ad and then reaches the website.
For instance, this model is ideal for SMEs with only a small marketing budget and limited data science expertise.
Last-touch Attribution Model
As its name speaks louder, the last-touch attribution model gives 100% credit to a customer’s last interaction. For example, suppose the brand markets its products on various channels, and Meta ads are the last point of interaction for the consumers, influencing them to search for the product and buy it deliberately. In that case, Meta ads get the conversion credit.
For example, LinkedIn’s algorithm uses the last-touch attribution model to analyze the conversion rate.
Linear Attribution Model
The linear attribution model gives equal credits to all the channels where conversions occur. Let’s consider a scenario where a product is promoted via newsletters, Meta ads, YouTube videos, and affiliate marketing. In this case, 25% credit will be given to each channel, regardless of whether the target customer was converted through a newsletter. The drawback of this model is the difficulty in identifying the best-performing marketing tactic.
Also Read: Mastering First-Party Data in a Privacy-focused Era
For instance, this model suits go-to-market teams looking for equal credit distribution across all touchpoints.
U-shaped Attribution Model
Also known as the position-based attribution model, the U-shaped attribution model gives 40% credits to the customer’s first and last touch point. It gives the remaining 20% credits to the other touch points between the first and last touch points.
For instance, it’s a perfect model for businesses with repeat customers who already understand their consumer’s behavior and journey.
W-shaped Attribution Model
The attribution model equally assigns 30% credits each to the first, middle, and last touch before the customer is onboarded. It specifically highlights the importance of both early and last-stage marketing efforts.
For example, This model is ideal for complex customer journeys where lead nurturing and mid-funnel interactions are essential. Nevertheless, it is less popular than other models.
Custom Attribution Model
This model, tailored to unique customer journeys, enables marketers to assign custom weight to different touch points, depending on the importance of their sales cycle. Consequently, it helps businesses develop a personalized model that aligns with their specific marketing strategies, customer behaviors, and goals.
For instance, the older version of Google Analytics, Universal Analytics, used session-based insights based on custom rules. However, Google phased it out due to the complex process involved it and introduced GA-4.
Data-Driven Attribution Model
The data-driven attribution model is every marketer’s favorite, all thanks to the real-time insights it uses to calculate the touchpoints of a customer journey. Utilizing the data-driven attribution model, marketers can keep track of the source from where the user enters their website and buys the product or service.
For example, Google Analytics 4 uses a data-driven attribution model that enables marketers to quantitatively analyze the maximum number of conversions from a channel or strategy via UTM (Universal Traverse Mercator). As a result, it helps them to focus on a strategy that works well.
How do you choose a suitable marketing attribution software to drive higher ROI?
When choosing a suitable marketing attribution solution, several consideration factors may vary from brand to brand. Thus, it becomes essential to carefully weigh the following criteria before choosing an attribution tool:
- Integration Support: Does it easily integrate with the rest of your martech stack?
- Affordability and budget: Are you getting what you are paying for, or are the provided solutions too expensive?
- User Experience: Is the solution straightforward and user-friendly to support smooth onboarding?
- Goal Alignment: How well does the solution align with your marketing goals regarding app integrations and other marketing tools?
Also Read: The Evolution of Customer Data Platforms (CDPs): From Niche to Necessity
Summing up, Marketing attribution models can be a game changer for a marketing strategy. Thus, it becomes essential for marketers to pick the best marketing attribution tool that contributes better ROI. Considering price, integration, user experience, and marketing goals are a few ways to choose the suitable option.
