What Are the Best Uses for Attribution Modeling? (+ How-To)
Most businesses simultaneously use multiple touchpoints to engage and convert customers. Which delivers the best outcome or aligns with your objectives? An analytics company in Chicago analyzes data using various tools and strategies to provide answers.
This article covers one of them — attribution modeling. In particular:
- What is attribution modeling?
- Why is it important to your digital marketing efforts?
- What are the five different types and their pros and cons?
- How do you pick the best model for data analytics?
Learn more about the attribution model technique today by reading this article!
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What Is the Attribution Model?
Attribution modeling assigns a point or credit to every touchpoint or marketing channel you used or the customer interacted with that resulted in the desired outcome. It could be a sale, a conversion, a signup to the mailing list, or a referral, depending on the goal of the digital marketing campaign.
Suppose you are an urgent care facility opening a new location in Bridgeport. You want to use online marketing to drive traffic to your newly launched landing page, increasing brand awareness. Your audience might discover the URL through search engines via a well-optimized content marketing strategy; paid ads; or social media, such as Facebook, TikTok, and Instagram. You might reach some people with your newsletter if you already have some subscribers living near or in the area. In addition, some website visits will likely be from existing patients or clients.
Attribution modeling gives value or weight to each of these to determine the most effective strategy. In the process, you can
- Learn to prioritize the allocation of resources, perhaps spending more on sources that bring the most traffic
- Optimize digital marketing techniques that can further contribute to the campaign’s success
- Gain insights into customer behavior in every stage of the customer journey and market trends
- Analyze your performance over a certain period
An analytics company might assign the credits based on the following techniques:
- Equal distribution, where each touchpoint receives an equal share of the total credit, regardless of its position or timing.
- Rule-based assignment, where the score relies on many factors such as position, time, or specific interactions (e.g., touchpoints closer to the conversion might receive the highest points).
- Data-driven algorithms, which depend on artificial intelligence (AI) and machine learning calculations.
- Weighted models, assigning different weights to touchpoints based on their perceived impact (e.g., expert judgment or stakeholder input).
- Custom model, where the method of assigning credits varies according to, say, marketing objectives of the campaign.
Types of Attribution Modeling
One of the trickiest parts of attribution modeling is not only knowing how much credit to assign but also (1) identifying the interactions or touchpoints that should receive it and (2) when to give it. For this reason, this system has five different types, each with pros and cons:
1. First-Touch Attribution
This model credits the first marketing channel your target audience interacted with, such as a social media ad or a link in the search results, because it assumes that the initial exposure influences the user’s buying decision.
First-touch attribution modeling helps you understand the impact of initial marketing efforts. It also gives insights into the success of demand and lead generation strategies. However, it can neglect the contributions of subsequent touchpoints and oversimplify the customer journey.
2. Last-Touch Attribution
Conversely, last-touch attribution gives all the credit to the final touchpoint before conversion. Going back to our healthcare facility example, you might assign the full score to the paid ad instead of the newsletter if clicking it was the buyer's last action.
Although it helps you measure the effectiveness of closing strategies, especially direct response, it can have similar problems to the first touch. It can ignore or disregard the influence other techniques have on the outcome.
However, it might be suitable for short and direct sales cycles. The customer journey is typically more straightforward, with fewer touchpoints.
3. Linear Attribution
This attribution model divides the credit equally among all marketing channels or touchpoints influencing the conversion or the preferred outcome. For example, if you have identified six, each will receive a percentage of 16.67%.
This method simplifies the evaluation of each touchpoint’s contribution to your success and removes any biases, unlike the previous two. However, realistically, touchpoints rarely have the same impact on results.
4. Time-Decay Attribution
Time-decay attribution assigns a greater point value to market channels closer to the conversion and decreases the credit for the earlier ones. This model acknowledges that those near the end of the customer journey have a more immediate impact on conversion.
It is particularly relevant for businesses where customers typically engage in a longer decision-making process. However, time-decay attribution might undervalue touchpoints crucial to generating initial awareness or building long-term brand loyalty.
5. U-Shaped Attribution
Also known as position-based attribution, it allocates credit to the first and last touchpoints, giving them a higher weight, and also considers the middle touchpoints. It recognizes the importance of customer acquisition (first touch) and conversion (last touch) and the supporting touchpoints that assist the customer along the journey.
Of all the types, this model paints the clearest picture of the customer journey and the role played by different marketing channels.
On the downside, it can still discard channels that might have contributed to the sale but are not within the same framework or pipeline. A classic example is a customer visiting a physical store to experience the product before buying it online.
How to Pick the Best Attribution Model
Because attribution models play a huge role in decision-making, picking the right one to use is crucial. What factors should you consider?
Here are the best tips:
- Understand your marketing goals. Different models serve different purposes. A first-touch model might be most suitable if your objective is to drive awareness. If conversions are your main focus, consider a last-touch or time-decay model.
- Consider the length of the sales cycle. For businesses with a longer sales cycle involving multiple touchpoints, multi-touch models such as linear or time-decay might provide a more accurate picture.
- Test and compare models. Do not hesitate to experiment with various models and compare the results to get valuable insights into the effect each has on your understanding of marketing effectiveness.
- Use advanced analytics tools. Some platforms offer algorithmic or data-driven models, such as Google, which uses machine learning to assign conversion credit, providing a potentially more accurate reflection of each touchpoint’s impact.
- Stay flexible. Your business and marketing strategies will evolve, and your attribution model should, too. Regularly review and adjust it as necessary.
There is no one right or wrong attribution model. The choice depends on factors such as the sales cycle, marketing channels you use, customers, and business goals.
This concise guide lists the most popular types, including their pros and cons and how and when to use them. However, the job can be complex, so we strongly advise working with the experts.
Digital Authority Partners (DAP) is an analytics company in Chicago that puts your business front and center in our digital marketing plan. We offer advanced attribution modeling solutions that drive success and maximize return.
Contact us to learn more about how we can help you align with the right model for your business.
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