What is Attribution Modeling?
An attribution model is the framework used to determine and assign credit to various touchpoints in a customer's journey that led to a desired outcome, such as a sale or conversion. It helps in understanding which marketing channels and strategies are most effective in influencing consumer behavior.
What is an attribution model?
Marketing attribution refers to the process of determining and evaluating the various touchpoints or interactions a consumer has with marketing channels before making a purchase or conversion. It aims to attribute credit or value to these touchpoints to understand which marketing efforts are most influential in driving customer actions or conversions. In essence, it answers the question:
"Which channels or activities contribute to a user's decision to buy or take a specific action?"
Types of attribution models
What are the different attribution models available?
In traditional models, marketing attribution was straightforward. For instance, a customer walking into your store with a clipping from your ad in the newspaper would attribute that sale to your recent newspaper advertisement. However, in today's multi-channel landscape, the conversion path has become more complex and far less linear. Customers now interact with brands through various channels such as social media, email, Google Ads, blog posts, among others.
Single-Touch Attribution Models:
These assign credit to a single touchpoint along the customer journey. Examples include:
- First-Touch Attribution: Also First-interaction attribution or first-click attribution. Attributes the entire credit for a conversion to the first touchpoint a customer interacts with. This model may be appropriate where building a brand is your primary concern because it focuses on "Where did a user start?"
- Last-Touch Attribution: Also known as Last-interaction attribution or last-click attribution. Credits the final touchpoint before a conversion with all the value. This attribution model focuses on "Where did a user come from". Avoid this model when your buying cycle is long, many decision-makers are involved, or you sell high-ticket items.
Multi-Touch Attribution Models:
These acknowledge multiple touchpoints and distribute credit among them. Examples include:
- Linear Attribution: Equally distributes credit across all touchpoints involved in the customer journey. Big companies or more established companies with a decent marketing budget should focus on determining attribution percentages more accurately.
- Time-Decay Attribution: Gives more credit to touchpoints closer to the conversion event, diminishing the value of earlier touchpoints.
- Position-based Attribution: sometimes called u-shaped attribution. This model gives the majority of the credit to the first and last interactions, with the remaining credit distributed evenly across every other touchpoint. Use the position-based attribution model if your business has several touchpoints before customers make a purchase.
- Algorithmic or Data-Driven Attribution: Uses complex algorithms to assign credit based on the unique contribution of each touchpoint. Use this model in scenarios with long buying cycles and when relationship-building is a key factor in sales success.
How to choose the right attribution model to measure results?
Selecting the appropriate attribution model requires a strategic approach based on understanding your business goals, the complexity of customer journeys, and available resources.
Here are three common approaches:
- Google Analytics (GA4): GA4 offers an insightful platform to comprehend how attribution models can alter outcomes. It provides a user-friendly interface for implementing and experimenting with various attribution models. Utilizing GA4 enables marketers to gain valuable insights into the impact of different attribution models on their marketing strategies.
- Third-party Attribution: Leveraging third-party attribution solutions can provide additional perspectives and tools for analyzing attribution across multiple channels. These solutions often offer diverse models and functionalities that can complement or enhance your attribution analysis.
- Custom Tool Creation: For advanced analytics needs, creating custom tools using programming languages like Python or other analytics platforms might be beneficial. This allows for tailored attribution modeling specific to your business needs and intricacies of customer interactions.