Today’s marketers face a challenging landscape as the average customer engages through 10 different channels to communicate with companies, contributing to a more fragmented digital marketing environment than ever before. As customer expectations escalate, the pressure on marketing Attribution Models management intensifies.

Recent research highlights that marketers prioritize optimizing the marketing mix for maximum returns and updating their tools and technologies to align with modern demands. Additionally, marketing teams are overhauling their metrics to suit a new era. According to the survey, 41% of marketing organizations employ marketing attribution modeling, such as marketing mix modeling and multi-touch attribution, as a means to measure ROI.

Now, let’s explore the prevalent types of marketing attribution. Whether you’re delving into marketing concepts for the first time or seeking a refresher on definitions, this comprehensive overview of marketing attribution models serves as a valuable guide.

What is Marketing Attribution?

Marketing attribution involves the assessment and monitoring of the effectiveness of your marketing channels. The primary objective of marketing attribution is to attain a more precise understanding of the various interactions and touchpoints that customers engage in with your brand throughout the conversion journey.

This process enables the attribution of credit to specific channels and campaigns that play a role in a conversion. Consequently, it provides valuable insights into how and where to strategically allocate your resources and attention.

The Role of Attribution Modeling Across the Business

While the term “marketing attribution” suggests a focus on marketing alone, the current multifaceted approach to branding, campaigns, and customer experience has transformed it into a company-wide initiative, especially with the adoption of more intricate models. Successfully implementing multi-touch and weighted multi-touch attribution models may necessitate the involvement of IT, while finance teams become crucial participants in goal-setting and ROI aspects.

This integrated approach extends to Customer Relationship Management (CRM) as well. Multi-touch attribution programs that integrate with a company’s CRM can benefit by seamlessly feeding attribution data directly into the sales apparatus. This integration enables both sales and marketing teams to rely on a unified tool for tracking, monitoring, and reporting on the performance and strategy of their campaigns. Without this integration, the data collected remains isolated from the rest of the organization, posing challenges in its application to future campaigns for optimization.

As marketing attribution evolves toward multi-touch models, businesses are now measuring marketing touches that occur with existing contacts. While these contacts are still prospects due to their yet-to-purchase status, they are not treated as entirely new leads since they already have a sales team assigned. In advanced multi-touch models, businesses focus on measuring marketing’s influence on prospects rather than solely “sourcing” new opportunities for sales. The challenge lies in convincing sales teams that marketing’s impact transcends pure lead-based demand generation, emphasizing a strategic partnership to accelerate the maturation and closure of deals.

Why Marketing Attribution is Only Getting Harder

While the concept of marketing attribution appears straightforward in theory, effectively tracking marketing touchpoints can prove intricate in practice. As technology advances and consumer behaviors evolve, the methods for tracking attribution also undergo changes. Consider the following factors:

Living in a Multi-Device World:

In today’s landscape, individuals often possess multiple devices such as smartphones, tablets, work computers, home computers, and smart home devices. Each of these devices may register as a distinct visitor to your site, even though they all belong to the same customer.

Stringent Privacy and Tracking Regulations:

The global landscape is becoming more stringent regarding privacy and tracking practices. Devices and browsers are becoming more cautious about storing user information and allowing tracking. With the prominence of regulations like GDPR and growing privacy concerns, consumers are increasingly required to opt in for online tracking.

Click-Based Attribution Models:

The majority of attribution models rely on click-based behavior and UTM tracking. However, this approach tends to overlook the impact of merely viewing ads or content without clicking on them. As a result, the full spectrum of user engagement may not be accurately captured in the attribution and reporting process.

Various Marketing Attribution Models

Explore the diversity of marketing attribution models, each offering distinct perspectives on crediting touchpoints:

First-Touch Attribution:

This model attributes the conversion to the initial touchpoint or interaction a customer has with your brand.

Last-Touch Attribution:

In this model, the conversion credit goes to the final touchpoint or interaction that directly precedes the customer’s conversion.

Multi-Source Attribution:

A comprehensive category encompassing diverse approaches to attribution, each shedding light on different facets of the customer journey.

Weighted Multi-Source Attribution:

This model assigns varying weights to different touchpoints based on their perceived significance in the conversion process.

The landscape of marketing attribution spans a spectrum from basic, single-factor models to sophisticated ones integrating complex algorithms and logic. However, each attribution method comes with its set of advantages and drawbacks, contributing to the ongoing debate and evolution in this highly contested realm of marketing.

Understanding Single Source Marketing Attribution

Single source attribution models allocate all credit to a single touchpoint, typically either the first touch or the last touch.

First-Touch Attribution:

First-touch attribution assigns all credit to the initial channel with which the lead engages. For instance, this could be attributed to the download of a resource, such as a datasheet. While it is a straightforward implementation (by tagging the lead source and attributing it to the final conversion), first-touch marketing attribution overlooks any customer interactions subsequent to the initial touch. This oversight can distort the perceived effectiveness of other channels in the customer journey.

Last-Touch Attribution:

In the last-touch model, credit is attributed to the touchpoint immediately preceding the final sale. This is typically the last interaction, such as a final pitch deck or sales call. However, it does not consider any prior interactions, such as the prospect’s website visits or interactions with the lead qualification team. Consequently, it misses crucial insights about the contributions of other valuable marketing channels.

Understanding Multi-Source Marketing Attribution

In the multi-touch attribution (MTA) framework, each contributing channel is acknowledged for its role in the final conversion. MTA comprehensively considers the entirety of a customer’s journey, attributing credit to multiple touchpoints. These touchpoints may range from ads, social posts, webinars, to e-newsletters. Despite its impartial nature, MTA faces challenges in precisely determining each channel’s actual contribution and is known for its complexity in implementation. Six MTA models are identified, including:

Linear:

The simplest MTA model, linear attribution allocates equal weight and revenue credit to all touchpoints.

Time Decay:

Tailored for longer sales cycles, the time decay model assigns credit to more recent touchpoints, prioritizing their impact over earlier interactions.

U-Shaped:

The U-shaped MTA model credits two pivotal touchpoints—the first touch and lead creation—along with any intermediaries. Forty percent of the credit goes to the first touch, 40% to lead creation, and the remaining 20% is distributed among middle touches.

W-Shaped:

Similar to the U-shaped model, the W-shaped MTA includes an additional touchpoint—opportunity creation. Each of the three main touchpoints receives 30% credit, while the middle touches share 10%.

Full Path:

Expanding on the W-shaped model, full path attribution encompasses the final close. It primarily attributes credit to significant milestones in the customer journey but also assigns lower weight to intermediary touchpoints. A notable advantage is its consideration of post-opportunity follow-up interactions by the sales team, equating them with early-stage marketing activities.

Custom:

The custom MTA model offers the flexibility to assign custom attribution weights, making it one of the most sophisticated options. Teams can tailor weighting percentages based on industry, utilized marketing channels, and typical buyer behavior.

Understanding Weighted Multi-Source Attribution

Weighted multi-source attribution models offer a comprehensive approach, allowing you to account for all interactions across the sales cycle while providing added precision by assigning varying weights to the touchpoints that exerted the most significant influence. Despite providing a more accurate portrayal of the customer journey, implementing weighted attribution models proves to be highly challenging.

In weighted touchpoint modeling, a percentage of revenue credit for a customer is allocated to an array of touchpoints, as dictated by the chosen multi-touch attribution model embraced by the organization.

Determining the optimal model remains a perplexing question for marketers globally. The effectiveness of each model hinges on the unique dynamics of the company. Leveraging diverse tools and engaging in the traditional process of trial and error can assist in evaluating marketing attribution models, seeking the best-fit outcome for your organization.

Consider this—any touchpoint attributed value consistently receives budgetary support, ensuring sustained high performance, while potentially leading to the perceived ineffectiveness of upstream channels. Embracing multi-channel attribution techniques allows you to showcase the value across all significant channels, potentially influencing budget decision-makers to allocate more funds strategically.

Understand attribution to make your marketing dollars work

Gaining insight into the realm of marketing attribution, identifying its limitations, and exploring various applicable models constitute an initial stride toward enhanced tracking, more organized customer databases, and informed decision-making. Although the landscape of marketing attribution is growing in complexity, the undeniable benefits it brings cannot be overlooked.

Marketing attribution serves as a crucial tool, providing invaluable insights into the intricacies of customer interactions with your brand on their journey to a purchase. This attribution data becomes instrumental in shaping marketing campaigns and refining your overarching marketing strategy, ultimately optimizing return on investment (ROI).

Final Thoughts

Utilizing attribution modeling can guide your team toward the right path and prevent unnecessary expenses on channels that do not generate conversions. Although attribution modeling is a powerful tool, it has certain limitations you should consider. 

We have yet to identify or create an attribution model for marketing that can accurately interpret, evaluate, and allocate credit to external and offline factors such as referrals and word of mouth that ultimately result in conversions. Additionally, attribution modeling could be more effective in measuring the impact of organic behavior on the success of advertising campaigns.