Today’s consumers don’t follow a linear path to purchase. They might discover your product through a Facebook ad, read reviews on a third-party website, click on a Google Ad, and finally make a purchase after receiving a promotional email.
This gave rise to multichannel marketing – targeting consumers across multiple channels, both online and offline. The goal is to make it convenient for consumers to engage with a brand when and where they prefer, from researching products and services to ultimately making a purchase.
However, with the purchase journey spanning so many touchpoints, how can you discern which touchpoint sealed the deal?
This is where marketing attribution comes into play.
What is Marketing Attribution?
Marketing attribution is a methodology used to analyze and assign credit to touchpoints in a customer’s journey, determining which elements of your marketing strategy have the most substantial impact on conversion.
In other words, it helps you understand which interactions or ads are most effective in driving users toward a desired outcome.
Why is Marketing Attribution Important?
Today’s marketers are more challenged than ever to do more with less while proving the value and ROI of their efforts. Marketing attribution is important in understanding which channels offer the best return on investment.
In turn, resources can be more effectively allocated by focusing on high-performing channels.
And by knowing which channels resonate most with your audience, you can tailor your content more precisely.
Research shows that attribution provides efficiency gains of 15-30%. Furthermore, 56% of marketers believe attribution is important, while a further 33% believe it’s nothing short of critical.
Marketing Attribution Benefits
Here are several benefits of implementing marketing attribution:
Insightful Decision Making: Understanding which marketing channels and tactics drive conversions helps you make informed decisions about how to allocate your marketing budget. This prevents you from wasting resources on ineffective channels.
Optimized Marketing Mix: Attribution optimizes the marketing mix by identifying which channels work best at different customer journey stages. This allows you to adjust your strategies accordingly.
Improved Campaign Performance: Marketing attribution helps you refine your campaigns for better performance, allowing you to identify high-performing campaigns and replicate their success, while also tweaking underperforming ones based on the attribution data.
Enhanced Customer Experience: Understanding the customer journey more comprehensively helps you provide a more seamless and personalized experience. You can deliver relevant content and offers at each touchpoint, which increases the likelihood of conversion and improves customer satisfaction.
Better Budget Allocation: Attribution helps optimize your marketing spend by allocating resources to the most effective channels and campaigns. This ensures that every dollar spent contributes to the overall marketing objectives and delivers measurable results.
Attribution Modeling: Various attribution models, such as first-click, last-click, linear, or time decay, provide different perspectives on how credit is assigned to touchpoints. This flexibility helps you choose the model that best fits your business goals.
Alignment of Sales and Marketing Efforts: Marketing attribution fosters collaboration between your sales and marketing teams by providing a clear understanding of how marketing activities contribute to sales. This alignment leads to more cohesive strategies.
Justifying Marketing Investments: Marketing attribution provides concrete evidence of the effectiveness of marketing efforts, making it easier to secure buy-in from stakeholders and justify future investments.
Identifying Growth Opportunities: Marketing attribution helps you identify new channels or tactics that have the potential to drive conversions and expand your customer base.
Continuous Optimization: Marketing attribution is not a one-time process but rather an ongoing endeavor. Continuously analyzing attribution data and iterating on strategies helps you adapt to changing market dynamics, consumer behavior, and technological advancements.
4 Marketing Attribution Types
1. First-Touch Attribution
First touch attribution is an attribution model that assigns 100% of the credit for a conversion or sale to the first touchpoint or interaction a customer had with a brand. This model operates on the premise that the initial marketing effort is what sparks a customer’s interest and sets them on the path to conversion.
Example of First Touch Attribution: Online Shoe Store
- Day 1: Sarah discovers the shoe store through a Google search ad promoting a new collection of winter boots.
- Day 5: She receives a promotional email from the shoe store with a discount code.
- Day 8: Sarah sees a Facebook ad from the shoe store showcasing customer testimonials.
- Day 10: Finally, she visits the shoe store’s website directly and makes a purchase.
Using the first-touch attribution model, the Google search ad from Day 1 would receive 100% of the credit for Sarah’s purchase. This is because it was the initial touchpoint that made her aware of the store and its offerings, even though other marketing channels later influenced her decision.
While first-touch attribution offers valuable insights into the effectiveness of top-funnel marketing activities, it can oversimplify the customer journey by not accounting for the impact of subsequent touchpoints. As such, businesses often combine first-touch attribution with other models to gain a comprehensive understanding of their marketing performance.
2. Last-Touch Attribution
Last touch attribution assigns 100% of the credit for a conversion or sale to the last touchpoint or interaction a customer had with a brand before making the purchase or taking a desired action. This model emphasizes the importance of the final push or nudge that drove the customer to convert.
Example of Last Touch Attribution: Online Bookstore
- Day 1: John discovers the bookstore after reading a blog post that reviews some popular mystery novels and provides a link to the store.
- Day 3: He then sees a banner ad from the bookstore while browsing a different site.
- Day 8: He receives an email newsletter from the bookstore that highlights a limited-time sale on mystery novels.
- Day 9: After clicking on the email link and browsing the sale, John makes a purchase.
Using the last touch attribution model, the email newsletter from Day 8 would receive 100% of the credit for John’s purchase.
Again, similar to the limitations of first-touch attribution, while last-touch attribution provides valuable insights into the effectiveness of bottom-funnel marketing activities, it may overlook the role of earlier touchpoints in nurturing and influencing the customer.
3. Multi-Touch Attribution (MTA)
Multi-touch attribution recognizes and allocates credit to multiple touchpoints or interactions a customer had with a brand throughout their buying journey. Instead of assigning the entirety of the conversion value to a single touchpoint (like first or last-touch models do), multi-touch attribution aims to more accurately reflect the complexity of modern customer journeys by distributing credit across multiple interactions.
Example of Multi-Touch Attribution: Online Fitness Equipment Store
- Day 1: Emily discovers the fitness store through a sponsored Instagram post about home gym setups.
- Day 4: She clicks on a Google search ad from the store when researching best treadmills.
- Day 7: Emily then watches a YouTube video sponsored by the fitness store demonstrating various exercise routines.
- Day 10: She receives a targeted email from the fitness store offering a 10% discount on treadmills.
- Day 12: Finally, after contemplating her choices, Emily makes a purchase using a direct link she saved earlier.
In a linear multi-touch attribution model, credit for Emily’s purchase would be distributed among all or several of the touchpoints she interacted with, rather than just one. Here’s a simple breakdown using a linear multi-touch attribution:
- Instagram post (Day 1) – 25% credit
- Google search ad (Day 4) – 25% credit
- YouTube video (Day 7) – 25% credit
- Email offer (Day 10) – 25% credit
In reality, there are various types of multi-touch attribution models, and the distribution of credit can be based on numerous factors, such as the perceived importance of touchpoints or their proximity to the final conversion.
4. Weighted Multi-Touch Attribution
Using weighted multi-touch attribution, instead of distributing conversion credit evenly across all touchpoints (as with linear multi-touch attribution), the weighted approach assigns varying levels of credit to different touchpoints based on their perceived importance in the conversion path.
This model recognizes that not all interactions with a customer hold the same influence or value in driving conversions. The weights can be determined by data-driven insights, marketer’s judgment based on campaign objectives, or a combination of both.
In our earlier example of Emily and the online fitness equipment store, a weighted multi-touch attribution model may score the channels as such:
- Instagram post (Day 1) – 20% credit (initial discovery)
- Google search ad (Day 4) – 30% credit (reinforced brand recognition)
- YouTube video (Day 7) – 10% credit (a reminder of benefits)
- Email offer (Day 10) – 40% credit (The final, decisive nudge to purchase)
The total sums up to 100%, distributed based on the perceived influence of each touchpoint on the final conversion.
Conclusion
No marketing attribution model is perfect forever. As your customer behavior and business goals evolve, so should your attribution model. Pinpointing what truly influences consumer decisions helps you invest more wisely in the strategies that yield the best results.
If you found this information helpful, check out our article: 5 Stages of the Customer Journey
Marketing Attribution Solutions
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