It is common to use several channels to market products and services for improved campaigns and increased conversion rates. While that is a good thing, it can be challenging to figure out which channel has the most impact on specific marketing return on investments.
Marketing attribution allows you to dig deep and find out how a prospect journeyed from being a lead to a paying customer. This enables you to know what is working, what is not working, what needs improvement, and where to focus your energy. This article delves into the various marketing attribution models to help you determine which one fits your marketing channel.
What is a Marketing Attribution Model?
In simple terms, a marketing attribution model is a method of determining the marketing strategy that influences sales conversion. It involves analyzing, evaluating, and assigning credits to the different marketing touchpoints that occur during a customer’s purchase journey.
With an attribution model, marketers can get a better understanding and pinpoint which marketing effort brings in the most leads to their sales funnel.
Types of Marketing Attribution Models
Assigning attribution or determining which campaign should take the credit for conversion is not a straightforward task, especially when you consider that there could be multiple touchpoints that occur in a customer’s journey to making a purchase.
To help you better understand how marketing attribution works, we shall take a more in-depth look at the different attribution models grouped into two major categories, including Single-touch and Multi touch Attribution Models.
Single-Touch Attribution Models
As the name implies, these marketing attribution models assign credit to a single touchpoint during a customer’s purchase journey. Single-touch attribution models are best suited for small marketers or companies with simple sales and marketing systems.
Consider using the models in this category if you don’t have a sales team or your marketing channels are limited to only one or two. It is also a better choice for marketers with a short sale cycle or smaller budget. However, this is not the most ideal model to use for B2Bs since they typically involve several touchpoints before conversion.
1. First-Touch Attribution Model
In this model, 100% of the credit for a lead goes to the first channel that directs a customer to your product. It also assigns all the credit to the first touchpoint that drives a customer to your website.
Here is a clarifying example. A customer sees your Facebook ad, becomes intrigued, and clicks through to your website. The lead followed a link on your website to watch your product demo, browsed through your site, and signed up for your weekly email newsletter. A few days later, they bought your product after a series of email campaigns.
The first-touch attribution model gives all the credit for that conversion to the Facebook ad, which is the first touchpoint, ignoring the product demo, email outreach, and every other possible touch that occurs before the purchase.
While all the other marketing efforts play different roles in the conversion, this attribution model only considers the initial touchpoint because the actual purchase would not be possible without it.
There is typically fewer calculations and analysis involved in this model, making it very easy to implement. The primary focus is on-demand distribution, so it is quite easy to track.
The model only accounts for the initial step in the entire customer’s journey, ignoring further interactions as well as the complete picture behind the conversion. This makes it prone to errors, especially if multiple touchpoints are involved in the customer’s journey.
When to use the First-touch Attribution Model
The first-touch attribution model is an excellent choice for finding out which channels are increasing the awareness of your product or service. It is a great tool for measuring your lead generation process by pointing out which top-of-funnel marketing efforts are producing the most results.
2. Last-Touch Attribution Model
This model works like the first-touch model, but instead of focusing on the point from which the lead encountered your business, it concentrates on what drives the customer to convert. Every other prior interaction is ignored, and all the credit goes to the last touchpoint.
Using the previous example, the credit goes to the email outreach because that was the last touchpoint before the purchase.
Besides the ease of implementation, the last-touch attribution model is a great way to see the conversion-based metrics. In other words, it shows what is directly responsible for a conversion.
Using this model, it is quite difficult to analyze what led to the conversion since it ignores every interaction that led up to the conversion. In a nutshell, the last-touch model has the same shortcomings as the first-touch attribution model, as both options do not tell the complete story behind a customer’s purchase journey.
When to use the Last-Touch Attribution Model
Marketers concerned solely about their conversion rates will find this model most suitable. It can help you determine the campaign messages that work best.
3. Last Non-Direct Click Attribution Model
The last non-direct click attribution may not be as widely popular as the other single-touch models, but it is an effective way to filter out direct traffic.
Customers who already know your brand or have seen many of your marketing campaigns usually make up a large chunk of your direct traffic conversion. Therefore, you are not likely to get a true reflection of your marketing strategy’s effectiveness if you focus on direct traffic.
In this model, 100% credit goes to the last non-direct source that converted a lead. For example, a customer does not convert after clicking on your display ad but logs on to your website on another day and purchase the advertised product. Whether you have Facebook ads or email campaigns running, the display ad takes all the credit because it is the last click that was not direct traffic.
The model is relatively simple to implement. It tells you the effectiveness of your marketing effort instead of measuring loads of direct traffic.
This model is overly simplistic. It ignores all the potential impacts that could result from direct traffic.
When to use the Last Non-direct Click Attribution Model
Consider this model if you are trying to measure the success of your marketing strategy without taking direct traffic into account.
Multi Touch Attribution Models
Companies and marketers who take advantage of three or more marketing channels will find the multi touch attribution models more appropriate. Typically, these companies have a bigger marketing budget. Consider automating these models with a customer relationship management (CRM) tool for the best results.
1. Linear Attribution Model
The linear attribution model assigns equal credit to all the interaction that occurs during a sales cycle. This includes everything from the first touch to conversion. In other words, all the touchpoints in this model have the same level of importance.
Marketers don’t have to concern themselves with assigning conversion credits to specific touchpoints since every part of the sales funnel is considered equally important in the linear attribution model. It gives a full overview of the customer’s journey from lead to conversion.
Setting up and implementation can be tricky and complex. Also, the model does not help marketers to fully optimize their channels since it is difficult to analyze exactly which touchpoint is more effective.
When to use the Linear Attribution Model
This model is most suitable for marketers with a typically long sales cycle involving plenty of buyer interactions.
2. Position-based Attribution Model
The position-based recognizes the importance of the middle point in addition to the vital roles of the first and last touchpoints. The model gives 20% credit to the middle touchpoint and credits 40% to both the first and last interaction points.
This model emphasizes several points of interaction, allowing marketers to optimize those channels.
In reality, the first or last points might not always be equally important, but this model doesn’t consider that.
When to Use the Position-Based Attribution Model
This model works best for campaigns designed to make consumers engage with content and convert almost immediately. It is not the best option for long sales cycles.
3. Time-Decay Attribution Model
As the name suggests, the time-decay model essentially ignores all interactions that occur at the early stage of a customer’s journey. With time, the initial touchpoints become less valuable and don’t receive any credit. Instead, the attribution goes to the points closer to where the actual conversion takes place.
This model helps you identify and optimize channels that play significant roles in conversation.
Time decay ignores some touchpoints that may have played vital roles in the conversion process.
When to Use the Time-Decay Attribution Model
This model is suitable for businesses with long sales cycles. It focuses mainly on the interactions at the later stages of the lead’s journey that triggered the conversion, allowing you to optimize lead generation.
4. Algorithm Attribution Model
The algorithm model offers the most complete and accurate way to determine a lead’s journey from the first touch to a successful conversion. The model can work manually or by automation, depending on the marketer’s tool.
The model has a significantly higher success rate than others. It provides accurate data that allows for proper attribution of credits to the most important touchpoints instead of randomly assigning equal credit to all the points of interaction.
The algorithm model is rather complex. It takes specialized knowledge and tools to perform the necessary calculations. Also, it can be an expensive option for smaller businesses.
When to Use the Algorithm Attribution Model
The algorithm attribution model is best suited for complicated sales processes. It is an excellent tool for a comprehensive overview of the different stages of a sales funnel.
Which Marketing Attribution Model Should You Use?
Having listed the major marketing attribution models, the next logical question is which model is best for your business?
Choosing the best attribution model for your channel partners depends on a few factors, such as your budget, typical sales cycle, and the sophistication of your marketing campaigns. A single-touch model (first-touch or last-touch) is ideal for companies with a rather simple business model and straightforward marketing effort. The simplistic nature of these models is more than sufficient for small businesses.
On the other hand, multi-touch attribution models are best suited for businesses with complex marketing efforts that usually require nurturing leads through long sales cycles.
Keep in mind, though, that accurate attribution models are not usually easy to implement. Besides, complicated models are not necessarily the best options for every business. That notwithstanding, businesses that prioritize accuracy and have the budget will find the algorithm attribution model most accurate.
Attribution Challenges with Channel Partners
For all their benefits, marketing attribution models present some challenges that can get in the way of providing accurate data. Some of these include:
- Correlation-based bias: This refers to when attribution models make it seem as if one event in the lead’s journey triggered another, when that may not have been the case in reality.
- In-market bias: Some consumers are in the market to buy specific products regardless of whether or not they see your ad, but the credit goes to the ad for converting the customer.
- Digital signal bias: This refers to making optimizations based only on digital data while ignoring offline data. If your sales activities occur both online and offline, your optimization decision should factor in all data sources.
- Cheap inventory bias: Sometimes, the conversion rate for low-cost media may have higher natural performance due to the target consumers and not necessarily because of the ads. This gives an incorrect view of media performance and can lead to wrong optimization decisions.
Finding the Right Attribution Provider
Marketers looking to make the best of their campaign efforts need to combine a few different models and compare data from each one to know which channels to optimize. To do this, businesses need to find a sophisticated analytics platform from a trusted provider. The provider’s tool or software should be able to incorporate speed, accuracy, cross-channel marketing insights, and connection to branding and performance.
Lead Assign offers such powerful attribution software that comes complete with built-in analytics for a high-level overview of all sales activities. If you are interested in trying out Lead Assign’s product, request a demo to see how easy the entire attribution process can be.
How Lead Assign Helps
Lead Assign’s real-time lead management solution is changing how companies work with their VARs to improve lead to revenue. Calculate how much more Revenue Opportunity you can generate from your marketing leads by implementing lead management.
Using AI-based lead scoring and routing, you can automatically distribute leads to the most qualified VAR for each deal. Leads get sent through texts or emails, enabling sellers to reach out within minutes. Our platform can easily integrate with your VAR’s CRM or partner portal so you can have total visibility on their deals without adding any software to anyone’s stack. Send a test lead and see how.
If you want to hear more about how Lead Assign can help your VARs sell more and close faster, we’d love to talk with you. See your potential success with the Power of Automation to get started.