What is Attribution Modeling?
Attribution Modeling gives credit to where credit is due in order to better track which form of advertisement is the most effective in a world of multiple digital touchpoints. This helps you to understand where you should focus your marketing efforts to generate a conversion event, in order to acquire customers more effectively.
How does it work?
Attribution works with data gathered from the digital touchpoints in a buyer’s journey, with different models being assigned based on the business model and user insights. Here are just a few of the most common models:
- Linear model: This distributes credit evenly across all touchpoints before conversion. For instance, if a user interacts with a paid search and Facebook ad, then both would receive credit for the conversion split evenly. Linear attribution is limited since it’s rare that every interaction is truly equal in driving a conversion since some channels are more valuable than others.
- Position-based model: This assumes that the two most important touchpoints are the first and last before conversions, assigning 40% to these touchpoints. The remaining touchpoints are split in the 20%, leading to a shape of a “U”. This is helpful in capturing the top and bottom-of-funnel activities for businesses that have multiple interactions with customers.
- Time Decay model: The time decay model assigns more credit to those closer to the time of conversion, assuming that these touchpoints have the most influence. This model is used for businesses with a longer sales cycle where relationship building is critical. However, this underestimates the top-of-funnel touchpoints which are important to acquire new customers.
- Algorithmic model: Often called Data-Driven Analytics, this uses machine learning to assign fractional credit across touchpoints leading up to the conversion event. This is the most resource-intensive model and works best with a high volume of interactions (In Google Analytics, it requires at least 600 conversions per month). It can apply to a variety of business models and marketing strategies.
What benefits does Attribution Modeling have?
By aligning conversion metrics with the goals of the campaign, the advertiser will be able to explore any cross-marketing synergies between digital channels in order to reduce the Cost Per Action. It also provides clarity in the customer journey in understanding information about customer behavior, content consumed, and time spent at different touchpoints. As a result, the advertiser can adapt their marketing strategy based on the targeting data in order to improve their ROI.
How to Implement Attribution Modeling?
There are two standard ways to implement attribution; you can either build the modeling in-house or purchase a cookie-cutter model. Building the model in-house is time-consuming and may take away time from other business processes. Less experienced individuals may not know how to create the best model for their business. Purchasing an off-the-shelf model requires fewer resources and knowledge, but may not be tailored to what your business needs. Luckily, at marketANDgrow, we have extensive experience regarding Attribution Modeling and our advisory service can offer guidance in building a top-quality attribution model. Get started with us today to take your marketing to the next level.