It's time to talk about attribution models and why they matter for your business.
You already know that most customers won't make a purchase the first time they click on an ad or navigate to your website. There are multiple touchpoints in the Buyer's Journey — it's your responsibility to show up and guide your prospect every step of the way.
There's only one problem…
How do you know which digital marketing channels are actually growing your business — and which platforms are a waste of time and resources?
If you struggle to show marketing ROI, you're not alone. A recent study found 61% of marketing leaders don't use ROI to make strategic decisions because they aren't confident in their data.
But if you're not using data to inform your strategy, then you risk misusing marketing spend and, worse yet, stifling business growth. Enter: attribution models.
Attribution models ensure you know which marketing channels are most effective so you can:
- Optimise your marketing spend
- Improve your ROI
- Build momentum and scale your business efficiently
Let's take a closer look at attribution models and how to use them in your business, so you can stop wasting money and start driving more conversions today.
What are marketing attribution models?
Attribution models are frameworks for analysing how to distribute conversion credit across marketing channels so that you can weigh each campaign based on its efficacy.
That means that if you have a multi-channel marketing strategy, you no longer have to guess who or what gets conversion credit. Your attribution model gives you the data you need to make informed, strategic decisions.
How to use marketing attribution models
How to use marketing attribution models will depend on your unique business, sales cycle, and goals. Let's explore the most popular options, including the new default attribution model in Google Analytics.
Are you focused on increasing brand awareness and building top-of-the-funnel marketing? Then you might find a First Interaction attribution model best suits your needs.
With First Interaction, the initial touchpoint receives 100% of the conversion value since that was the prospect's first exposure to your brand.
In other words, First Interaction provides helpful information on the methods and strategies most successful in driving new customers to your business.
Last Touch Attribution
As the name suggests, Last Touch Attribution is the opposite of First; it assigns full conversion credit to the final touchpoint before the purchase.
A Last Touch attribution model is useful for understanding where most of your bottom-of-the-funnel transactions are occurring — to know which marketing campaigns are closing the sale.
If your business has a short sales cycle or you don't have a comprehensive cross-marketing strategy, then a Last Interaction attribution model might be for you.
Last Non-Direct Click
A Last Non-Direct Click attribution model is different from Last Interaction as it assigns conversion credit to the final contact before the prospect directly navigates to your website.
Let's take a quick example:
Say you click on a Facebook Ad, browse around, and then close the website without making a purchase. The next day, you decide you want to buy the product. So, you type the website URL directly into your browser and finish your transaction.
In this case, the Facebook Ad would receive conversion credit because it was your last non-direct interaction with the brand.
Since most people engage with your business before making a direct website visit, a Last Non-Direct Click model helps understand the final trigger before the purchase.
Do you have a marketing strategy with multiple touchpoints? Then a Linear multi-channel attribution model could help you understand which channels are most impactful to your bottom line.
A Linear model assigns equal conversion credit to each marketing channel that influenced a purchase.
If a prospect interacted with a social media post, navigated to a blog article, clicked on a retargeting ad and then made a purchase, each channel would receive equal credit towards the conversion.
Every interaction with your brand is a worthwhile milestone along your Buyer's Journey. However, your goal is to grow your business — and that means you need to close more sales.
With the Time-Decay attribution model, you understand the marketing channels that move your prospect closer to making a purchase.
Each marketing contact receives conversion credit with the Time-Decay model; however, the closer the channel is to the actual sale, the more value it receives. Consider how valuable time is in your conversions; if you have a longer sales cycle, a Time-Decay framework might work for you.
A Position-Based attribution model allocates the highest value to the first and last interaction on your conversion path. After all, the initial channel acquired the customer; the final contact sealed the deal.
Here's a quick example:
Let's say you acquired a new lead via a PPC campaign. You then nurtured the lead through email funnels and retargeting ads. An exclusive promotion in a private Facebook Group was the final influence that led to a purchase.
In this scenario, you might assign 40% conversion credit to the first and last touchpoint; you would split the final 20% between the remaining channels.
Now, it's vital to analyse your entire cross-channel marketing strategy. However, sometimes you want to prioritise acquiring and closing the lead — and this attribution model helps you do precisely that.
Last Google Ads Click Model
Does your marketing strategy focus heavily on Google Ads? Then the Last Google Ads Click Model is a valuable tool to uncover which of your AdWords keywords is driving the most revenue.
In this model, the total conversion value goes to the last paid ad the prospect clicked before purchasing. Use it to understand your highest converting paid ads.
Finally, let's explore the newest default attribution model in Google Analytics — what Google argues is the most beneficial method for accurately analysing results.
The power of the Data-Driven model is that it allows you to set your end goals and then weigh each marketing channel based on its performance in helping you achieve those goals.
Google explains it well:
"Unlike other models, data-driven attribution gives you more accurate results by analysing all of the relevant data about the marketing moments that led up to a conversion. Data-driven attribution in Google Ads takes multiple signals into account, including the ad format and the time between an ad interaction and the conversion. We also use results from holdback experiments to make our models more accurate and calibrate them to better reflect the true incremental value of your ads. "
You can learn more about the ins and outs of Google's Data-Driven attribution model here.
The applications for a Data-Driven model are extensive; if you want the most in-depth data about each platform in your cross-channel marketing strategy, it's hard to argue against this attribution model.
That said, the attribution model you choose depends on your business goals. Just ensure you have a holistic reporting system, so you can use actual data to inform and optimise your marketing strategy and, ultimately, your ROI.
Finally, it's one thing to implement a marketing attribution model — it's another entirely to analyse the results so you can make agile changes to your marketing budget that supercharge your growth. That's why I'm here.