As a digital marketer or brand owner, you spend a lot of time and energy promoting your brand through different marketing strategies. Naturally, you want to know what's actually paying off and what's not, so you can focus on what's working, right?
To know which strategies are working, we rely on attribution models. These models help us understand which marketing efforts are bringing in leads or sales and which ones might need some tweaking.
They look at all the interactions a customer has with your brand, from initial awareness to final conversion.
For example, if a company finds that most of their sales come from Instagram ads, they might decide to invest more in those ads.
Does that make sense? I’m hoping it does.
Now, let's dive into the types of attribution models. Understanding each type of attribution model will help you determine which one best fits your needs for tracking the success of your marketing strategies.
Types Of Attribution Models
Let's explore some of the most widely used attribution models:
First Touch Attribution
You're browsing online and you see an ad on Facebook for a new gadget that caught your eye. You click on it out of curiosity BUT don't buy anything right away.
Later on that day, you're checking your email and notice a discount offer for that same gadget from the company. You click on the email link and decide to buy the gadget this time.
In this scenario:
The Facebook ad is the "first touch" because it's what initially caught your attention and made you interested in the gadget.
Even though you didn't buy right after clicking the ad, it gets all the credit for leading you to discover the product.
The email, which came later and actually closed the sale, doesn't get any credit in First Touch Attribution because it wasn't the first thing that grabbed your attention.
So, First Touch Attribution focuses solely on that initial interaction that starts your journey toward making a purchase.
Last Touch Attribution
Let’s say you want to go on a vacation. You see a travel ad on Instagram and start thinking about going to that destination. Over the next few weeks, you keep seeing ads and articles about this place, and you even read a few blog posts.
One day, you get an email from a travel company offering a special discount on trips to that exact destination. You click on the email link and book the vacation right away.
In this scenario:
The Instagram ad was your first touchpoint that sparked your interest.
You had several interactions afterward, like reading blog posts and seeing more ads.
The email was the last interaction before you made the booking decision.
With Last Touch Attribution:
The email gets all the credit for the sale because it was the final thing that influenced you to make the purchase.
Linear Attribution Model
Linear attribution is a type of multi-touch attribution model that considers all the different touchpoints a customer interacts with before making a purchase, giving each touchpoint equal credit for the sale/conversion.
This approach provides a more comprehensive view of all the interactions that contribute to conversions, helping you avoid overestimating the impact of any single channel.
However, the linear attribution model has its drawbacks. It can be more challenging to implement than first-touch or last-touch attribution because it requires tracking multiple touchpoints in detail.
Not only that, giving equal weight to all touchpoints may not always be realistic, depending on the customer journey for your specific business.
For example, a customer sees a banner ad on a website, then clicks on a Google search ad to visit your site, and finally signs up for your email newsletter. After receiving several newsletters, they click on a link in one of the emails and make a purchase.
In this scenario, while it's useful to acknowledge that the banner ad, Google search ad, and email all contributed to the sale, it might not be accurate to say they all contributed equally.
Time Decay Attribution Model
In the time decay attribution model, multiple touchpoints are given different weights based on their timing. This model assumes that touchpoints closer to the time of purchase have a greater influence on the customer's decision.
The last touchpoint receives the most credit, while the first touchpoint gets the least credit for the sale.
A downside of this model is that it can undervalue early-stage marketing efforts.
When you're promoting a new online course, initially, you run a series of blog posts and webinars to educate your audience and generate interest in your course. Later, you follow up with a series of email campaigns and targeted ads.
In the time decay attribution model:
The last email or ad that directly led to the sale gets the most credit.
The early efforts like blog posts and webinars, which probably helped in building interest and trust, get the least credit.
The time decay model might not give enough credit to the early educational efforts, even though they played a role in getting the customer interested and eventually buying the course.
U-Shaped (Position-Based) Attribution Model
The U-shaped attribution model is a type of multi-touch attribution model that distributes credit for a sale as follows:
40% of the credit is given to the first touchpoint
40% of the credit is given to the last touchpoint
The remaining 20% is distributed among all other touchpoints
This model assumes that the first and last interactions are the most influential in leading a customer to make a purchase. However, this assumption might not hold true for every business.
W-Shaped Attribution Model
The W-shaped attribution model allocates credit for a sale as follows:
30% credit is given to the first touchpoint
30% credit is given to a key mid-funnel touchpoint
30% credit is given to the last touchpoint
The remaining 10% is divided equally among all other touchpoints
Final Words
Choosing the right attribution model depends on understanding your business goals, how customers typically make decisions, and which marketing channels are most impactful for your audience.
With the right model, marketers can make more data-driven decisions to improve their strategies and get the most out of their marketing investments.
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.