What is an Attribution Model and How can it Benefit your Business?
Did you know that approximately 42% of marketers still use spreadsheets for marketing attribution?
What is an Attribution Model?
Marketing attribution is the process of assigning credit for conversion to the various marketing channels that contributed to the sale. By understanding how different marketing activities contribute to conversions, businesses can optimize their marketing mix and budgets to better achieve their desired results.
Attribution modeling allows marketers to analyze how much credit each marketing channel and customer touchpoint should receive for a given conversion. A tool like HubSpot can make managing attribution even easier. Over time, marketers can utilize this approach to optimize their programs toward the touchpoints that drive the most value. These models focus on different touchpoints to better understand how the customer behaves when interacting with your marketing.
Why does Marketing Attribution matter?
Some of the different reasons that Marketing Attribution matters include:
- Improved decision-making
- Increased return on investment
- Improved customer journey insights
When considering how these factors impact your organization, it is clear that they provide a reason to learn more about how to improve. With knowledge and the right tools, companies can get complete visibility into the online channels that drive leads and will no longer be in the dark regarding marketing attribution.
Improved decision-making
Understanding which marketing activities are most effective enables businesses to allocate their resources more efficiently. By mastering marketing attribution, you take the first step to move towards better utilizing strategic marketing and moving beyond tactical thinking. Having a clear plan allows your business to make informed decisions that create a positive impact and, in turn, generate more customers.
Increased ROI
Businesses can optimize their camp by attributing conversions to the touchpoints that played the most significant role in influencing a sale. Digital Marketing can help uncover the strategies and efforts that result in increased conversations and ROI.
Improved customer journey insights
By understanding how customers interact with your brand across different channels, you can better map out their potential customer journey. Marketing attribution can help you determine the specific content your potential customers like, the ways they like to communicate with your business, and the activity that officially converts them to becoming a customer.
What are some of the different types of Attribution Models?
Attribution models can primarily be separated into two categories: single-touch attribution and multi-touch attribution.
Single-Touch Attribution
Single-touch attribution models assign all of the credit to a single touchpoint. The selected touchpoint is usually the first or last touch. Other marketing touchpoints can easily be overlooked when using single-touch attribution, as only one touchpoint receives credit for the conversation. First touch attribution is awareness focused, while multi-touch attribution is conversion-focused.
- First Touch Attribution
- First touch attribution gives all the credit to the first interaction that led to the desired action or conversation. This specific model is easy to set up and track. It also helps demonstrate how a consumer is introduced to your brand.
- Last Touch Attribution
- Last touch attribution gives all the credit to the last interaction that led to a closed won exchange. This model can help you determine the touchpoint that influences the consumer at the end of their interaction.
Multi-Touch Attribution
Multi-touch attribution gives each contributing channel a portion of credit for the final conversation. These models are highly informative because they account for the entirety of the buyer journey and allow you to identify where you are having the most success.
- Linear Attribution
- Linear attribution looks at each interaction that a prospect had before the final conversation and gives equal credit to each interaction.
- Full-path Attribution
- Full-path attribution gives 22.5% of the credit to the first interaction, the interaction that created the contact, the interaction that created the deal, and the interaction that closed the deal. The remaining 10% is then evenly distributed across all other interactions.
- Time Decay
- Time decay gives more credit to the interactions that occur closer in the customer’s journey to the completed conversation. This model allows marketers to identify the touchpoints that have directly led to the conversation. The value of this model is based on where customers engage across the funnel instead of the impact the touchpoints had on the consumer.
How can utilizing Attribution Models benefit your business?
Utilizing attribution models allows you to identify the specific touches that are influencing your customer. By understanding the particular click that leads someone to interact with you, you can focus your efforts on bettering these practices.
There isn’t an attribution model that is considered superior to the others. That being said, different factors like buying cycles or business goals can make one model better than the other.
Which model is best for your business?
To determine which attribution model is best for your business, you need to identify the information you hope to gain. There is no shortage of attribution models to help aid your understanding of both consumer behavior and which touchpoints are the most impactful.
Combining multiple models is the best way to get the most thorough insight across the entire buyer’s journey. By implementing numerous models, you are utilizing your tools to the fullest degree to truly understand the activity that will drive your business toward success.