Digital marketing is a method in which customers are led down multiple paths to the same destination. The goal of gaining new business is the same whether you use social media, email, or paid search ads. How can marketing teams tell if customer conversions are being driven by social media, email, SEO, or a combination of these channels? Digital marketing attribution or attribution marketing is the solution. This is the science of figuring out which digital marketing methods are the most effective for your business.
What is Marketing Attribution?
The Short Definition | Simply said, marketing attribution is the science of understanding which marketing approaches are responsible for generating sales or conversions.
The Long Definition | The activity of analysing the marketing touchpoints a consumer encounters on their path to buy is known as marketing attribution. The purpose of attribution is to figure out which channels and messages influenced the choice to convert or take the desired next step the most. Marketers today use a variety of attribution methods, including multi-touch attribution, lift studies, time decay, and more. These models’ insights on how, where, and when a consumer engages with brand messaging enable marketing teams to adjust and customise campaigns to fit the specific wants of individual customers, hence increasing marketing ROI.
Why is Marketing Attribution Important?
To guarantee that each contact is properly weighted, advanced marketing attribution tools require marketing teams to gather and normalise consumer data from several channels. If a customer is exposed to both a display ad and an email campaign, but only converts after seeing a special offer in the email, marketers can conclude that the email played a larger part in the sale than the display ad. They can then focus their efforts on developing targeted email marketing.
Marketing teams demand advanced analytics solutions that can reliably and rapidly distil massive data into person-level insights that can be used for in-campaign improvements to attain the level of data granularity required for effective attribution.
Benefits of Marketing Attribution
Advanced attribution models, especially complicated models that analyse a variety of variables for online and offline campaigns, can be time and cost-intensive to get right. When done correctly, however, attribution provides a slew of advantages, including:
Optimized Marketing Spend
By displaying the touchpoints that generate the most engagements, attribution models provide marketers with information into how marketing budgets are best spent. This helps marketing teams to make necessary adjustments to the budget and media expenditure.
Increased ROI
Effective attribution allows marketers to target the appropriate customer at the right time with the right message, resulting in improved conversions and marketing ROI.
Improved Personalization
Marketers can use attribution data to understand the messaging and channels preferred by individual customers for more effective targeting throughout the customer journey.
Improve Product Development
Person-level attribution allows marketers to better understand the needs of their consumers. These insights can then be referenced when making updates to the product to target the functionality consumers want.
Optimized Creative
Attribution models that can evaluate the creative elements of a campaign allow marketers to hone messaging and visual elements in addition to better understanding how and when to communicate with users.
What are some common marketing attribution models?
Let’s take a closer look at these types of attribution models:
- First-touch attribution
- Last-touch attribution
- Multi-source attribution (several varieties explained below)
- Weighted multi-source attribution
There are several techniques to marketing attribution, each based on a particular sort of analytics model and methodology for balancing the various data inputs that influence customer behaviour. These models can be divided into two types at a high level |
Single-source models, which are simpler and focus on identifying just one touchpoint that is most influential in the conversion
More complex multi-source models, which weigh the relative influence of multiple touchpoints.
Now let’s look at the various attribution methods available within these categories |
First-Touch Attribution
This is probably the most straightforward marketing attribution approach. It gives the marketing effort that brought the customer full credit for the conversion.
This model is simple to comprehend and apply. However, it mainly tracks top-of-funnel marketing efforts and doesn’t give you a clear picture of crucial touchpoints later in the sales funnel.
Last-Touch Attribution
This model inverts first-touch attribution by focusing on the final touchpoint that leads to a sale, and it’s also simple to understand and implement. This technique has the disadvantage of simply tracking bottom-of-funnel marketing activities. It’s useless for determining which channels brought buyers to your brand in the first place.
Linear Attribution
Linear attribution is a simple multi-source attribution approach that seeks to identify all significant touchpoints in the buying process. After those touchpoints have been discovered, each one is given equal weight.
Because it does not assign different weights to different relevant touchpoints, this approach is quite simple to implement. This, however, is a flaw: if certain interactions are more essential than others, this model will miss the most influential ones. It simply distinguishes between completely unimportant touchpoints and those that were significant in some way.
Position-Based Attribution
This model, often known as “U-shaped attribution,” attributes 40% of conversion credit to the initial touchpoint and another 40% to the touchpoint that comes right before a conversion. The remaining 20% of the credit is distributed among various touchpoints.
This is a more advanced model that aids marketers in interpreting the relative impact of several touchpoints in a complex marketing and sales process. It is, however, arbitrary in that it presupposes that the first and pre-conversion touches are the most essential, which is not necessarily the case.
W-Shaped Attribution
The first touch, the lead creation touch, and the opportunity creation touch each receives 30% of the credit in a W-shaped attribution model. The balance of the credit is allocated to other relevant touchpoints.
This model has the advantage of showcasing three of the most impactful touchpoints on customers, albeit this is not always the case. Its primary flaw is that it gives post-opportunity creation touches little weight.
Time Decay Attribution
The closest touches to conversion are given the most credit in this model. It provides a multi-source model that is simple to calculate while still supporting a huge number of touches.
Because lead generation and other top-of-funnel marketing operations often occur relatively far away from conversion, time-decay attribution may undervalue them.
Choosing a Marketing Attribution Model
Consider the above marketing attribution models to be guides rather than mandates. You can customise them to meet the demands of your team by creating your algorithms.
The ideal model for you will be determined by the number of touches you generally have before converting, as well as how those touches are dispersed across the sales funnel. A simplistic, single-source strategy may work effectively for you if your customers only contact you a few times before converting. Choose a model that allows you to measure many touches that occur late in the funnel if you invest extensively in end-of-funnel marketing initiatives.
Marketing Attribution Strategies
When there are so many variables at play, it’s important to follow best practices and avoid common pitfalls when building a marketing attribution strategy.
Using marketing software to automate and systematise the process of discovering which sales and marketing activities lead to which revenue-generating events is one useful method. The use of marketing technologies eliminates the guesswork involved in connecting marketing channels to sales. They also make marketing attribution efforts scalable, allowing you to understand the most relevant touches whether you’re running a few or dozens of campaigns.
Set aside time to set up marketing attribution data measurement and reporting. Make sure that every marketing channel you use is recorded and linked to revenue production in your reports, from online ads to webinars to conferences.
You should also create an omnichannel marketing attribution plan, which helps you to see how online and offline marketing channels affect a single consumer journey. Because customers frequently interact in both environments — they may read online ads while later speaking with a salesperson at a trade fair, for example — you won’t be able to perform efficient marketing attribution if you only track online or offline touches.
Also, keep track of the impact of touches not only on new leads but also on prospects that are currently in the sales funnel. SQLs are frequently impacted by marketing efforts, and later-in-the-funnel interactions might be crucial for conversion.
Summing-up
Marketing attribution is essential for ensuring that your marketing efforts pay off. Software tools that automate and systematize marketing attribution are critical for making the process reliable and efficient.
Shergroup offers a number of tools to help marketers with attribution at any scale and with any methodology. It simplifies the data collection process for single-touch and multi-touch marketing channels, offers a simple drag-and-drop interface for creating marketing attribution reports, and provides a flexible framework for defining different marketing channels based on templates and automated insights that link revenue to marketing efforts.
Shergroup allows different types of marketing teams to track the results of all their channels.
As consumers experiment with new channels and businesses employ cutting-edge marketing technologies, attribution becomes increasingly important in aligning your whole marketing department behind a single revenue-generating aim. While the most effective marketing attribution models are still being debated, adapting your strategy to your company’s needs — while keeping the data you collect integrated with your CRM and IT stack — will provide the most opportunities for lead conversion.
If you’re looking for an agency that could help you understand your marketing needs and take your sales northwards contact Shergroup today.
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