Looking for a test that can pinpoint your most impactful Instagram post? A marketing report that can show you exactly what motivates your target consumer to buy? A system that will consistently improve your content and marketing intelligence? You’ve come to the right place; pull up a chair and learn a bit more about marketing attribution models.
What is Marketing attribution?
Marketing attribution is basically a set of rules by which marketers can measure the impact each customer interaction has with your company, and which interactions push their decision to make a purchase. Marketing attribution calls each of these interactions a ‘touchpoint.’ A touchpoint occurs anytime the customer interacts with your company’s marketing material; an example of a touchpoint might be a Facebook ad, an email, link click, or Instagram carousel. By leveraging marketing attribution, you can analyze and determine which marketing channels or messages are most impactful for your buyer personas. There are several different models of attribution and depending on your company, customers, and marketing strategy, you should pick the model that works best for you.
Option 1: Single-Source Marketing Attribution
Single-source marketing attribution gives all the sales conversion credit to just one touchpoint in the customer buying journey. Across the board, single-source marketing attribution is best for companies with short buying cycles and is advantageous because of its simplicity. There are two types of single-source attribution: first-touch and last touch.
First-touch marketing attribution emphasizes the first touchpoint in the buyer journey as the one with all the conversion power. This model is good for evaluating each channel in comparison with the other and can be especially helpful for companies looking to bring in top of funnel customers. A weakness of this attribution model is that it discredits all retargeting ads and does not explore other possibilities past the first marketing channel the customer encounters.
Last-touch marketing attribution works best for a sales funnel that is widest at the top and narrowest at the bottom. This model assumes the last touchpoint pushed the customer through to purchase and doesn't explore the possibility that any other touchpoint leading up to it had any selling power. Last-touch marketing is the final effort when the customer has all their items in the cart.
Option 2: Multi-Source Marketing Attribution
According to the multi-source model of marketing attribution, each channel in the full buyer’s journey gets credit for its contribution, but not for the actual fraction of its contribution. Multi-source marketing attribution credits multiple touchpoints with the final sales conversion, but is more complex to practice. There are five major subtypes of this marketing attribution model.
- Linear Attribution: This is the most simple of the six types of multi-source attribution models. Linear attribution gives equal weight and revenue credit to all touchpoints in the customer buying journey. This model recognizes the value in every channel of marketing at every step of the sales funnel but fails to recognize ineffective marketing efforts.
- Time Decay Attribution: In this model of marketing attribution, credit is given to more recent touchpoints in the customer journey and not to the less impactful, earlier touchpoints. Time decay takes form in a longer sales cycle, with increasingly distanced touchpoints. In essence, the touchpoint that delivered the conversion at the end of the cycle gets more credit while initial touchpoints get less credit.
- U Shaped Attribution: This attribution practice credits two touch points with sales conversion, each with 40% credit for success. The two touchpoints that make up the ‘U’ are the first touch and lead creation. The remaining 20% of success is attributed to any touchpoints that might have occurred between the first touch and lead creation. Warning: it has been found that this model of marketing attribution can lead to over-reporting on both ends of the customer buying journey (aka, the ‘U’).
- W shaped Attribution: The W Shaped model of attribution builds on the U Shaped model by adding a third major touchpoint between the first touch and lead creation touchpoints. Because this attribution model recognizes opportunity creation as a third major touchpoint, each receives 30% each with middle touches sharing 10% of sales conversion credit collectively.
- Full Path Attribution:This marketing attribution type builds on the W Shaped model by including the post-opportunity customer close touchpoint.The Full Path model gives lower weight to middle touchpoints and equally accounts for post-opportunity follow-up interactions too. This model is thorough, but costly in resources and time.
Where, Why, & How did ‘Marketing Attribution’ become a Buzzword?
As early as the 1950s, Americans used marketing mix models to measure marketing and advertising success. These were based on controlled experiments across all media channels. This model of analysis became popular in the 80s, though it was expensive and slow compared to modern marketing attribution models. Fast forward to the early 2000s when digital marketing entered the scene. All of a sudden, marketing analysis becomes much more efficient and precise. Marketing attribution models began to pick up speed among companies in the 2010s, and by 2017, 63% of US marketers have begun to lean heavily on their marketing attribution models as a key part of their marketing strategy.
How to Set UP Marketing Attribution
If you still want to learn more about the specific marketing attribution models after reading through this article, there are resources available to help determine which model is right for your business. This page from Google Analytics helps you compare and contrast the different models of marketing attribution. It may be helpful to start from a foundational level and understand your current and potential buyers. We like Neil Patel’s blog to help you map out your company’s ideal customer journey. Another way to start is by using Google Analytics to set up a simple first-touch attribution model.
While preparing to launch marketing attribution models for your brand, you should also reflect on these questions:
- What phase is my business in?Your business may be younger and growing quickly or older and adapting to change. No matter which phase your company is in, it’s worth examining the growth you’re experiencing so you can identify which style of marketing attribution fits your brand best.
- Are you proactive with prospecting? If your answer is yes, your business’ priority is likely to gain acquisitions. You may want to give serious thought to the First Touch Attribution model which identifies the right channel for reaching the right buyers.
- Are you a retailer or a brand? Whether your company is B2B or Direct to Consumer (DTC) may impact the channels your target consumers use, and, ultimately, the marketing attribution test types you use.
STEP-BY-STEP GUIDE TO MARKETING ATTRIBUTION
After you are familiar with your buyer’s journey and the appropriate marketing attribution model for your company, it’s time to roll up your sleeves and set it all up. Check off each item on this list as you prepare to launch your model for the first time...
- Establish your Funnel Stages: Reference your buyer personas for this step. The buying journey will encapsulate the viewpoints of your customer, while the funnel stages will be from the company viewpoint. The funnel stages you should make sure to identify are:
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- Lead
- Opportunity
- Marketing qualified lead (MQL)
- Sales qualified lead (SQL)
- Customer
- Set goals: What do you want to accomplish by establishing marketing attribution models? Try to sort through each of your channels, and to be as specific as possible by using KPIs in your goal-setting process.
- Tag your marketing campaigns: Use Google Analytics (or whatever analytics platform your business uses) so that you can closely track and monitor customer activity.
- Identify your cost per acquisition: This will help establish effective marketing attribution calculation as well as ROI calculation.
- Capture data on every relevant channel: These could be email, Instagram, Ad clicks - any measurable impression of the customer on your marketing content.
- Report your results and analyses: Did you accomplish your goal? What about your marketing attribution model was successful? In which areas did your model fall short? Assemble all data into graphs and charts to create the story of your marketing attribution as it lives in the customer buying journey.
- Retest, if necessary: Once you get the hang of your marketing attribution models, you can easily tweak parts of them to hone in on certain channels or message types. The more you practice, the better your targeted marketing strategy will become.
Marketing attribution models are a huge advantage in our modern, highly competitive consumer market, especially when the average company alone uses eight marketing channels. No matter how stiff the competition, and no matter how many channels you have to wrangle, marketing attribution models can take you leaps and bounds. Are you ready?