Digital marketing is an endless fountain of opportunity. You can reach out to potential customers on social media or email or through Google advertisements. You can also engage customers via blogs, downloadable white papers, landing pages, and more.
There’s just one problem, your team, somehow, has to demonstrate direct ROI for each activity, even if the conversion is ten steps down the road after a social media video is watched. The difficulty of this is why 40% of marketers state proving ROI as their top marketing challenge.
That’s why marketing attribution exists.
What is Marketing Attribution?
Marketing attribution is an essential analytics model that helps you attribute conversions to marketing actions and channels. Think of it as a set of rules that help you assign credit to every marketing tactic that moved the customer toward a conversion. Using a basketball analogy, marketing attribution is how you assign assists. It’s fundamental to your marketing strategy.
For example, let’s say a customer discovers your website thanks to a Facebook Ad. Then, a few days later, they see a Google Ad and sign up for your email list. A few days later, that brings them to your latest blog, and from there, they finally make a purchase on your website.
With marketing attribution, each touchpoint—Facebook Ad, Google Ad, and blog—is an assist for the final conversion and deserves credit, which you report as ROI. The key is being able to aggregate and normalize all your incoming customer data, so every interaction is properly weighted. This is why it’s critical to choose the right attribution model.
There are several attribution models you can use, which we’ll talk about later, and each works best for particular tactics and strategies. Ultimately, no matter what attribution model you use, it should help you follow your customers through every stage of their journey—from awareness to consideration and decision.
The Benefits of Marketing Attribution
When you can measure the effectiveness of every marketing activity and channel, you can prioritize and optimize what works best while weeding out what is a waste of your effort.
Marketing attribution is crucial to your budgeting and planning. When you know which channels help you generate more leads/demand, convert those leads to customers, and reduce the cost of customer acquisition, you’ll know where to increase your budget and where to decrease it.
According to the 2018 State of Pipeline Marketing report, marketing organizations with sophisticated attribution:
- Are 46% more likely to grow their revenue year over year by more than 20%.
- Are 68% more likely to feel confident about their ability to hit their revenue goals.
- Are 127% more likely to feel that they are effectively measuring marketing performance.
- Are 71% more likely to report positive ROI.
- Are 84% more likely to be aligned with sales.
- Are 59% more likely to have a reputation as a “revenue center.”
What Are the Most Common Marketing Attribution Models?
Now, you just need a marketing attribution model—the right model. There’s not a one-size-fits-all solution. In fact, every business and even every campaign can require a different model to be effective.
Before you jump off the deep end and set up your attribution model, let’s talk about the most most popular types.
First Touch gives credit to the very first point of contact with a potential customer—where you originally generate interest. In our example above, it would give full credit to the Facebook Ad that initially interested the customer regardless of whether the Facebook Ad directly influenced the final sale or not.
This model is most effective when you want to see which strategies and channels generate new customers the best.
Lead Conversion Touch
Lead Conversion Touch can be confused with First Touch, but this model is different because it helps you understand which marketing channels drive marketing qualified leads (MQLs).
In the example above, while the Facebook Ad would be considered the customers first touch, the Google Ad, which led to the customer signing up for your email, would be the Lead Conversion Touch because that’s when the lead was generated.
This model is most effective when you want to determine which channels generate the most leads/contacts.
Last Touch or Last-Click gives credit to the last touchpoint. In our example above, it would give 100% of the credit to the blog because that was the last touchpoint before the customer made a purchase from your website.
This model is effective when you want to determine which channel provides the most conversions and contributes the most to revenues.
Multi-Touch is the most complicated method of attribution. It takes all touchpoints into consideration, no matter where they happen in the customer journey, providing fractional credit to every tactic. In this way, you can see how every channel influences the final sale, which helps to eliminate bias and skewed data.
There are multiple types of Multi-Touch attribution, each with their own benefits.
- Linear: The Linear model gives equal credit to every channel or tactic that impacted the buyer before converting. In the example above, that means the Facebook Ad, Google Ad, and blog would all get equal credit for the conversion. This is a valuable method for measuring all of your marketing efforts holistically.
- Position-Based: Also known as the bathtub or u-shaped model, in the Position-Based model you give the most credit to the first and last touchpoints on the customer journey. For example, the Facebook Ad and blog would be weighted more heavily than the Google Ad. This model is best for telling you which marketing channels are best at acquiring a new audience and which are best at converting that same new audience.
- Time Decay: In this model, you gradually increase the credit of each touchpoint leading up to the last. So the Facebook Ad would receive 25% of the credit, the Google Ad would receive 30%, and the blog would receive 45%. This model is best for determining which channels regularly drive conversions and are at the top of your funnel.
- Custom: The Custom or Data-Driven model allows you to assign credit based on your end goals. You can weigh each channel based on the effectiveness of accomplishing those goals. Using technical algorithms and machine learning, you would assign fractional credit to every tactic based on your customers and business. This is the most effective model at determining which channels are actually driving the most overall success.
How to Choose the Best Model for Your Company
In the end, as we stated at the beginning, there’s no perfect model that works for every business or marketing strategy. You’ll never be 100% accurate. Instead, you should test each model to see which one is most effective for optimizing your marketing efforts.
To get started, we recommend taking advantage of HubSpot. HubSpot offers five different attribution models: First Touch, Last Touch, Last Interaction, First and Last, and Simple Decay. In this way, you can run each report and see which model works best for your company.
Ready to get started? Contact us at KeyScouts to benefit from HubSpot’s robust marketing analytics and reporting. By working with us, you don’t have to worry about setting it all up and understanding all the pieces. We will do it for you, so you can focus on doing what you do best.