In the e-commerce world, there can be many channels to manage, and it can become quite challenging to go through the information and gather the correct data that represents your customers and how they interact with your purchase process. Choosing the suitable marketing attribution model can help you sort through user data and create effective campaigns for potential customers to convert.
What Is a Marketing Attribution Model?
Marketing attribution is the process that marketers use to assign credit for conversions among various marketing channels - social media, email, display ads, organic search, chat, and others. Attribution models have the goal of accurately mapping a customer's interactions and touchpoints with your brand. Recognizing the impact of each marketing channel or touchpoint can help you to:
- Uncover which marketing activities are working or not working
- Understand where to allocate your budget
- Discover the average amount of interactions needed to convert a user
You can better understand and optimize your purchase funnel to influence customers' purchasing decisions through different channels and touchpoints with the suitable attribution model.
Types of Attribution Models
There are different types of attribution models: For example, single-touch model and rule-based multi-touch model.
Single-touch Attribution Models
Assign 100% of conversion credits to a single touchpoint, commonly the last-click and first-click. The last-click or the first-click are two widely used methods.
- First-Click: The first touchpoint gets 100% credit for the sale. So if a customer finds your brand through an Instagram ad, the Instagram ad will get 100% credit for a conversion that occurs. This is a good option for campaigns that are limited to only one or two activities.
- Last-Click: The last touchpoint before a conversion gets 100% of the credit. For example, if a customer found your website through a Facebook ad but then visits a landing page directly on your website to buy your product, the credit will 100% go to the landing page. This can help you understand the deciding factor that generates a conversion.
Multi-touch Attribution Models (Rule-based)
This attribution model assigns conversion credits across multiple touchpoints using a predefined rule. Most commonly, these rules are linear, position-based, or time-decay.
- Linear: Every touchpoint in the customer journey gets equal credit. Use this model to help understand the ROI of your branding efforts overall.
- Position-based: The first and last touchpoint of a customer's journey will always receive 80% of the credit (so 40% each), while the last 20% is then applied evenly to all the channels in the middle of the journey. Therefore, it can be used to measure the impact of every channel in the customer journey.
- Time-decay: The channels closest to the conversion will get the most credit, while the channels at the beginning of the customer journey receive the least credit. This can help you weigh the importance of different channels towards the end of the journey to convert.
Which Attribution Model Is Right for You?
There is no perfect or one size fits all attribution model for each brand. You can use factors such as the number of channels and the length of the customer journey to help decide which one fits your business goals best. In the following, we have put together a guide to give you an idea of which attribution model to use.
Companies with Longer Multi-touch Customer Journeys (Multiple Channels):
Position-based or time-decay attribution model because of the flexibility each has. Both can give you insights for longer conversion journeys and more complicated user journeys.
New Brands or Brands with Short Buying Cycles, Limited Channels or Products:
Single-touch models like first-click and last-click attribution can be the best options to measure direct responses through the touchpoints and understand your brand's channels better. The go-to model is the last-click because it can help you identify the channel the customer used to make a purchase.
The attribution model is entirely dependent on your business and your goals. In the rapidly transforming e-commerce world, these can change, and so can the attribution model. For this reason, Tracify is not limited to a single attribution model, but can switch between them as needed to give you the best data to base your decisions on any time.