The marketing professionals of today have a lot of work to do. Customer communication with companies has become increasingly fragmented in recent years, with the average consumer using several channels to contact the company. To meet customers’ rising expectations, brands and marketing managers must also step up the heat in their proverbial kitchens.
Marketing research says marketers’ top priorities are to optimise the marketing mix to deliver the best returns and modernise their tools and technologies. These teams are also reformatting certain marketing metrics to align with the current marketing paradigm. According to the survey, 41% of marketing organisations use marketing attribution modelling to measure ROI. How do marketing attributions differ from one another? What is the most common type of marketing attribution used? It doesn’t matter if you are a beginner or just brushing up on marketing attribution models; we at Expand My Business have put together this overview to guide people who want some primer on the topic.
What is marketing attribution?
Marketers have a way of assessing the value or return on investment of channels that connect them to potential customers, called marketing attribution.
The marketing term “consumer acquisition” refers to how consumers learn about and purchase your product or service.
Several marketing channels were responsible for the final decision to purchase, including the Facebook advertisement they initially clicked on or the email they received when they signed up for the newsletter.
A virtual world would allow you to track every step of the customer journey from the beginning to the end, with anecdotes from the individual customers illustrating precisely why they made their decisions.
The operational marketing role is becoming more complex due to the increasing number of touchpoints to be considered. Several marketing attribution models have been introduced and continuously evolved since the advent of digital technology to deal with multi-channel selling.
Various forms of marketing attribution
Choosing the right marketing attribution model that you will utilise and applying weight factors appropriately is very important when working with multiple channels.
1. Single-touch attribution models
A conversion model of a single-touch attribution attribute to either the first touchpoint or the last touchpoint. This is a technique for attributing 100% of a sale to a first marketing touchpoint, such as a Facebook ad that produces a click-through that leads to a purchase on the website.
One of the drawbacks of first-touch attribution is that it does not count other touchpoints that could have contributed to the sale. A last-touch attribution technique–using the credit entirely to the last touchpoint of a transaction.
An example of this is a lead who responds to a form on a website requesting more information. This allows conversion credit to be attached.
The last-touch attribution is the easiest to create and measure. However, it does not credit other touchpoints that may have influenced a customer’s decision to complete a purchase.
For example, a digital advertisement may generate a click-through that leads to a website where the customer fills out an information form that a sales team representative uses to contact and close the sale.
2. Multi-touch attribution models
The multi-touch attribution model involves attributing conversion credit based on multiple touchpoints along the buyer’s journey where the customer interacted. Different marketing channels are generally used to nurture and influence customers toward a sale, rather than just one.
Thus, simple single-touch marketing attribution models misrepresent the contribution of touchpoints to a company’s return on investment. A multi-touch attribution strategy can be extremely useful and accurate, but it requires more planning and more complex data analysis.
Identify the multi-touch attribution model that best fits your goals, and then use it as a starting point. The linear model takes account of all touchpoints along the customer journey equally and gives them equal credit for revenue.
However, this model might not adequately reflect the value of each touchpoint. The conversion event of a pop-up, for example, may not have been affected as much by a video demonstrating the product on the website as it may have been by the pop-up itself.
3. The time decay MTA
It is also known as a time-dependent MTA – has the advantage of being applied when you have a lengthy sales cycle with a lot of touchpoints spread throughout. More recent touchpoints are given credit in the model. This assumes that touchpoints at the bottom of the sales funnel did not have the same impact on the conversion as touchpoints at the top. Hence they reflect credit appropriately to touchpoints at the top.
4. U-shaped MTA
It provides equal credit to two touchpoints, first-touch and lead generation, each receiving 40% of the total spend. For any touchpoints in between, 20% is equally distributed among them. Although this model highlights the importance of lead generation, it omits touchpoints that may occur after lead generation, which may be responsible for conversion.
5. Full-path MTA
It extends the concept of W-shaped multi-touch attribution by including the final close. Regarding the overall funnel, 22.5% of the revenue credit is attributable to first-touch, lead generation, opportunity creation, and final close. The remaining 10% of its revenue is allocated across attribution touchpoints between each business segment.
6. A customised MTA
You may think that multi-channel attribution models and weighting are not providing you with what you need for correct conversion attribution and weighting. Each of the models becomes more and more complex as you progress through the multi-channel attribution process.
Using a custom model is the most accurate way of evaluating touchpoint impact on a customer’s journey in an organisation. But designing such a model can be both time-consuming and challenging.
How does attribution pose challenges?
Although attribution sounds like a good idea on paper, some challenges come with it. These are just a few things you might encounter as you delve into attribution.
1. Buy-in & Alignment
There must be buy-in and alignment from the organisation, which cannot be obtained without buy-in from the organisation. It’s generally agreed that marketing attribution is good, but if departments have different definitions of what attribution should look like, there will be discrepancies.
2. Metrics and Business Objectives
The challenges here are two-fold: first, they cannot be tied to a single metric. Many additional data points are available today, but most organisations do not always provide clear, actionable goals. This can create friction between the various organisations.
3. Bad Data
Most organisations have a large volume of less than optimal data. The information may be inaccurate, incomplete, and not reflect the whole picture. Therefore it is very difficult to identify and eliminate those gaps. The marketing attribution model will be improved if you make sure you work with clean, segmented data.
4. Complex Buyer Journey
The consumer decision-making process is more complex than ever, and it is only getting more complex. The buyer journey can therefore be described as complex. The increasing number of touchpoints makes attribution more challenging as the number of touchpoints increases.
Even though costs can be reduced with open source capabilities such as Google Analytics, Data Studio, and even combining your solution with open source content management systems like Drupal. Attribution still can be very expensive both in terms of people and outsourcing for skills you don’t have on your team.
As for technology platforms, attribution measurement looks different throughout the different platforms if you use multiple channels, which is likely the case. For instance, Facebook measures differently compared to Google Analytics. Therefore, it is important to understand how attribution differs between channels to make better long-term decisions and achieve higher results.
How to measure marketing attribution?
To establish an effective attribution model, you need to understand how all the data that supports it is gathered and measured. Below are some of the main ways that smart, multi-touch attribution solutions can track marketing activities across various channels, platforms, and mediums.
This baseline tracking method uses a snippet of code that you can embed into your website to track user movements and activities. The advantage of using this tool as a foundation tool is that your website provides a hub for other marketing activities funneled into your website.
UTMs are tags added to the end of a URL to track click-based and marketing activity-based metrics. There are several purposes for tracking UTMs. An example of this includes tracking the name of the campaign, the content, the keywords, the traffic sources, and the distribution channels, such as social media, email, an affiliate, a referral, or a referral an ad on Google or Bing.
3. Third-party applications
Multi-touch attribution contributes a proportion of sales and marketing returns to various marketing touchpoints through application program interfaces. Multiple touchpoints can offer potential customers a wide range of digital tools, platforms, and technologies to provide them with the best conversion experience.
Furthermore, data from a marketing technology platform can be delivered safely and efficiently to a data warehouse using APIs, making the process faster, easier, and more efficient.
4. Pixel tracking
This form of tracking is mostly done by advertisers. Here pixels are embedded in the images in a website or email. The pixel is sent to an advertiser when a customer interacts on the website or email. This allows them to track their behaviour and assign the conversion to the right touchpoint.
5. Integrations of CRM software:
This is one of the most common and proven ways of collecting data to attribute your marketing channels. CRM software is integrated into a digital marketing platform. Through this, you can track and analyse customer behaviour across various touchpoints. This allows businesses to understand the impact of different channels and campaigns. On this basis, they can create and adapt their strategies accordingly.
Marketers need to implement marketing attribution in this competitive environment to maintain a competitive edge. The key to determining which of your digital marketing campaigns and the fundamental elements that make up those campaigns will perform well and which won’t.
The goal of marketing attribution is to enable you to get the most out of your marketing budget and to prove your return on investment. Unfortunately, the complexity of marketing attribution models makes them difficult to use and apply accurately, as we have seen from our previous discussion. Using these models to collect insightful, meaningful data requires a lot of time and skill, but the payoff can be considerable.