Choosing the Right Attribution Model for Your Business
Cost containment. Belt-tightening. Economic headwinds. Reduction in force.
Whether scanning the day’s top headlines or scrolling your LinkedIn timeline, you’re hit with terms that paint a clear picture of a tumultuous macroeconomic market — one where departments across the business are doubling down on methods to prove return on investment (ROI) by tying their efforts to the bottom line.
What does that look like in marketing? Rather than funneling dollars into broad and unproven campaigns, marketers are reallocating budget and talent to prove marketing effectiveness with efforts that are tied to positively impacting sales by driving qualified leads with a high likelihood of converting into paying customers.
From a bird’s eye view, it sounds simple, right? Just keep repeating the tactics in campaigns that produce the most customers. If only that were the case. Marketing campaigns are anything but simple. Each campaign is made up of several tactics intended to guide prospects along the path to purchase. Determining effective touchpoints gets complicated when you attempt to break down which has the most impact in converting a sale.
Enter marketing attribution, a data-based marketing strategy that determines which channels and touchpoints move an audience down the funnel. When deployed successfully, marketing attribution can lead to increased marketing ROI and optimized marketing spend. However, overly complex attribution models are among the top challenges of marketing attribution, so it’s critical to understand the intent and impact of each before deciding on what makes the most sense for your business.
What are the most common attribution models?
There are various marketing attribution models, ranging from single- to multi-touch, with each assigning a different level of credit for a channel or touchpoint’s role in a conversion. Here’s a breakdown of the six most common attribution models.
Single-source marketing attribution models, as the name implies, assign all the credit to a single touchpoint, so they tend to be a good fit for products with a short buying cycle or companies looking to understand consumer behavior for a new program or product. There are two types of single-source models:
- First-touch attribution gives all credit to the first touchpoint or channel that a prospect engages with along their journey. This often takes the form of a downloaded resource (white paper, data sheet, etc.), organic search, or interaction on social media. For example, if a customer lands on your website via a social ad but is converted from a compelling email, the paid ad receives all the credit.
First-touch attribution models are simple to implement and measure. However, because first-touch attribution models discount subsequent touchpoints, even if the customer is more influenced by them, they can take away from the perceived effectiveness of other channels.
- Last-touch attribution assigns conversion credits to the last touchpoint or most recent interaction before a sale, like a sales call or email promotion. For example, if a customer browses your website to learn more about your product or service and then makes a purchase after providing payment information to a sales rep via phone, the sales call will receive the conversion credit.
It’s relatively easy to identify which touchpoint or channel to credit when using a last-touch attribution model. However, because last-touch models don’t account for prior interactions, even if the customer is more influenced by them, they can downplay the importance of other valuable touchpoints in multichannel marketing campaigns.
Multi-touch marketing attribution models assign credit to each contributing channel along the buyer’s journey to conversion. These models are best fit for businesses with a more complex buying cycle or products that typically require more interaction before converting into a sale. Here are the four most common multi-touch marketing attribution models:
- Linear attribution is the simplest of the bunch, assigning equal credit to all touchpoints and channels that prospects interact with along their journey to becoming customers. For instance, let’s say a customer Googled your company, saw a retargeted ad on LinkedIn, then finally decided to make a purchase after chatting with a sales rep. Google, LinkedIn, and the sales rep would receive equal credit in converting a sale. Linear attribution makes it easy to identify which touchpoints are influencing prospects, but it doesn’t pinpoint which channels are the most effective.
- Time decay attribution is more common in B2B, where sales cycles are longer and touchpoints are spread over time. Time decay models distribute credit across all channels interacted with, but more recent touchpoints are given more credit as they’re deemed to have had more impact on the purchase decision than earlier interactions. For instance, if a customer clicked on a link in an email and browsed your website early in the journey but didn’t make a purchase until they attended a webinar and requested a demo, more credit would be given to the webinar and demo.
- U-shaped attribution gives credit to all channels but assigns the bulk of it to the first and last touchpoints — 40% to the first interaction, 40% to the last interaction, and the remaining 20% distributed evenly among all interactions in between. This model gives more weight to the importance of top and bottom of the funnel content.
- W-shaped attribution is like U-shaped attribution except that it gives equal credit weight (30%) to three main touchpoints — the introduction to the brand (first touch), the creation of a lead (middle touch), and the opportunity to sell (last touch) — with the final 10% distributed across all other touchpoints. Think about the B2B SaaS customer journey — organic search, paid media, asset downloads, demo requests, pitch decks, reference calls, etc. The W-shaped model recognizes that while a prospect might be introduced to the company through organic search, downloading an asset indicates a higher level of interest, and completing a reference call often seals the deal.
Points of consideration when choosing the right marketing attribution model
There’s no one-size-fits-all marketing attribution model as there are infinite factors that come into play depending on the business model (B2B, B2C, B2B2C), size (commercial versus enterprise), maturity (startup versus corporate), etc. Marketers must consider all these factors when evaluating marketing attribution models. Here are three points of consideration to help you choose the right model for your business:
- Tailor your approach to your business. The marketing attribution model that works best for your business should be determined by the unique buying patterns and habits of your ideal customer profile (ICP) and your company’s marketing goals. Turn to data from your sales cycle to help you decide. For instance, for short cycles where customers rarely need more than one interaction to make a purchase, a single-touch attribution model might be ideal. However, if you have a long and complex sales cycle that requires many channels to move customers down the funnel, a multi-touch attribution model is more appropriate.
- Compare marketing attribution models. After determining if single or multi-touch attribution is the right route for your business, evaluate the pros and cons of each against your specific business needs. If this is an effort to understand buying habits when testing a new product or service, you might want to consider a multi-touch approach so you can identify which channels have the most impact along the buyer’s journey.
- Determine your metrics for success. There’s also no steadfast rule that you must remain committed to a single model. As your business evolves and scales, so will your marketing attribution model. Revisit your data often and pivot when the numbers tell you a different story.
Whether facing an economic downturn or looking ahead to a welcome recovery, gone are the days of excess spending. Understanding the impact of every dollar spent is critically important now and in the future as the growth at all costs mindset has given way to focus on long-term sustainable growth and predictable profitability. By identifying which channels and touchpoints are turning prospects into customers, marketing attribution helps businesses achieve both.
The first step to successful marketing attribution is understanding the importance of its role. The second step is determining the appropriate model for your business through an understanding of the pros, cons, and use cases for each.