How Can Attribution Models Improve Your Online Marketing?
Attribution in digital marketing is the craft of understanding how marketing efforts attract and convert prospects into customers. This is a complex exercise and the best way available to do this today is through touchpoints, which are interactions with your customer.
Marketing contacts the customer through channels, including email marketing, social media marketing, and search engine optimization (SEO). Answering the question – which are the most productive channels – is often difficult, but it’s the kind of question that must be answered if you want to understand which marketing channels are working for your company.
It’s not enough to track the actions of people who come to your site or say, click on your ad. You do need to understand why they took those actions and what the different channels were that brought them there.
All of this data can be visualized, making it easy to compare the performance of the different channels. There are different ways to do this.
An Engine That Drives Customer Intelligence, Oyster is not just a customer data platform (CDP). It is the world’s first customer insights platform (CIP). Why? At its core is your customer. Oyster is a “data unifying software.”
Digital Marketing Attribution
Digital marketing attribution is the science of grasping how your different touchpoints on the web attract and convert prospects. It can be tricky to measure attribution: the problem with attribution modeling is that it’s simultaneously too simple and too complex. For example, you might not be taking into account all the places where the customer has been before conversion. The good news though is that such attribution modelling techniques are constantly improving and evolving. There are newer tools being put out there to help you develop a clearer picture of what’s working and what’s not. In its most simplified form, attribution is a web of cross-channel data sources stacked one on top of another. In this article, we’ll explain what digital marketing attribution is, and its popular models.
Introduction to Digital Attribution Marketing
Marketing means the process of connecting your company’s message with the person who is most likely to be interested in it. But it’s usually hard to measure marketing effectiveness, because often, it’s tough to attribute the performance of your marketing efforts to specific individuals or specific channels. Maybe that individual came to your site by visiting a particular social media profile or through an ad, or did both? How much of that action was the result of the marketing you did and how much was the result of that person’s own interest in what you’re selling are questions that must be also addressed.
In your effort to understand which marketing channels are working for your company, it’s important to understand why your customers took the actions they did, too. This will help you identify the strengths and weaknesses of each channel.
One of the first steps to understanding your marketing attribution is to determine who, or what, is actually responsible for the conversion. As I said earlier here, digital marketing attribution is the process of assigning a value to different channels of digital marketing efforts.
The types of attribution include:
1. Last click or visit attribution – This method of attribution is determined by the last action before a conversion. For example, if someone clicked through on an ad and then signed up for your email list from your website, you would attribute their signup to the last action they took, i.e. signed up for your email from your site.
2. First touch or click attribution – This method of attribution is determined by the first action that occurred before a conversion. For example, if someone clicked on your social media post first, then went on to click on your ad, and then signed up for your email list, you would attribute their signup to the first action they took, i.e. the social media channel.
3. Goal-based attribution – This type of attribution is determined by goals. Goals are actions that are taken that you want to attribute a value to. They are defined by actions that indicate a series of steps have been completed before a conversion occurs.
4. Time-based attribution – This type of attribution is determined by time, which can be day, week, month, or year.
By understanding how each type of attribution works, you can begin to evaluate whether your digital marketing efforts are working the way you want them to or not.
Different Attribution Models In Marketing
Now, I shall explain some of the attribution models, their advantages and disadvantages. So, let’s get started.
Marketing attribution modelling is a method used by marketing specialists to assign value to each touchpoint of the customer’s journey. Let me explain it with an example. A new website visitor arrives at your site via online search. You can measure the effectiveness of your SEO efforts by giving each source a value between 0 and 1. If your website visitor arrived from a blog post, you would assign a 0.25 to the blog post and 0.75 to Google. Thus, the total value of all touchpoints will be equal to 1. The same applies for Facebook, Twitter, YouTube etc.
This scoring, however, does not take into account the quality of the post or the nature of your target market. So, as an alternate, you can use one of several models that takes into account the different channels, channels with different costs and create a multi-variate attribution model. But before that…..
Here are some of the advantages of digital marketing attribution modeling:
- It is flexible
- It also lends itself to detailed analysis of attribution data
- It can be used for marketing strategy making
In order to understand how to create a marketing attribution model you need to first familiarize yourselves with the following concepts:
Segmentation, Value Proposition, Customer Journey.
Segmentation is the process of dividing your customer base into categories.
A value proposition is a statement of what you offer to customers and how your business aims to differentiate itself from the competition.
Once you have segmented our customers in terms of their attributes, it is important to analyze their behavior. Then, you can start to understand which products they tend to buy. In order to get an understanding of their behavior, you can run a series of experiments or send surveys to them.
Once you have found the value proposition which you believe is attracting people to your product or service, you can then determine which attributes are associated with this value proposition. For example, if you have determined that your product’s value proposition is “reliable solution for storing and sharing documents,” then attributes such as “reliable” and “cost-effective” might be associated with this value proposition. The goal is to get you to connect the attributes of your product or service to the experience that people have when they interact with it in their customer journey.
Now, it is time to understand the popular types of attribution modeling. A marketing attribution model is a method that calculates which communications were most effective by weighing various aspects of the campaign. In fact, there are many models available, and many of them have obvious challenges, for example, combining offline and online data. When determining budget allocations or next steps, choosing the right model is paramount to accurate measurement of your campaigns.
1. Single-touch attribution models: These are less expensive, but their results are sometimes difficult to interpret. They are therefore often used in test groups. With these models, all touchpoints are considered equally for the value of a conversion.
The two main types of attribution models are last-click and first-click attribution.
Last-click models are used to measure the effectiveness of an ad, for example, by figuring out where users actually click. First-click models are used to measure the performance of a landing page by looking at the percentage of users who complete the conversion on that particular website or app. First-click attribution is an Internet marketing model that helps marketers determine the effectiveness of banner ads by tracking where users click on ads. A last touch might not accurately reflect the many other factors that influence the decision to purchase
First-click models are often used in direct response, while last-click models are used for branding or awareness campaigns.
A first-click model is mainly relevant for organizations focusing on identifying leads sources like webinars. Is there a disadvantage to this method of lead generation? The first touch of a campaign is only taken into account for the calculation. Therefore, your attribution model won’t tell you how effective your nurture campaigns are, possibly leading you to underinvest in them. First touch attribution can provide valuable insights about your new leads, but it can mislead you to invest in less effective marketing campaigns overall.
2. Multi-touch attribution model: The multi-touch attribution model considers all touchpoints the consumer engages with leading up to a purchase. Therefore, these models are considered more accurate. Different multi-touch models may give different values to different channels. Some calculate the conversion value based on the interaction a consumer had with a touchpoint, while others weigh them equally.
Multi-touch attribution models can be built for individual touchpoints, or they can be used to calculate the value of all touchpoints together. Multi-touch attribution models are typically more expensive than single-touch models because more data is required. For example, to calculate the value of both direct mail and online advertising together, you would have to incorporate response data from each medium. Many marketers have found that the results from multi-touch models are more reliable and useful than single-touch models.
Both attribution models give valuable insights about where your marketing dollars are best spent.
Multi-touch attribution models can be used to calculate both direct and indirect conversions. They can also be used to create a buy-ability matrix, which shows the cost to acquire a conversion. For such models, you need to collect all the possible data as the first step.
There are three different types of data to collect:
- Customer response data, such as phone calls, e-mails, visits to web sites, and order forms.
- Sales data, including sales leads generated by the media channels, sales conversions made after the media channel, and sales profits generated by the media channel. Sales data will usually be more difficult to collect than customer response data.
- Other marketing activities, such as increased acquisition costs, increased product line price, or other marketing activities caused by the media channel.
Here are some popular multi-linear models:
In “linear attribution” model, each touchpoint leading to the purchase is recorded. It gives equal weightage to each of these interactions, i.e. equal credit for all touchpoints leading the conversions. The drawbacks of this model is that it is too simple, and treats all the touchpoints in the same manner.
“U-shaped” model, as opposed to linear attribution, provides different scores for engagements, noting that some have a greater influence on purchase decisions than others. Accordingly, we credit each of the first touch and conversion touch with 40% of the responsibility for a lead. Twenty percent is divided between the touchpoints engaged with between the first and lead conversions.
The final 20% of the responsibility is attributed to the touchpoints between the lead conversion and the second conversion touchpoint. Understanding how the strengths of each touchpoint’s interactions differ from one another will help you determine how they influence conversions.
An attribution model that resembles a “U” shape, this one is relatively comprehensive. Its multi-touch nature means it does account for all the different customer touchpoints along their journey, but only gives credit for the most important ones. An organization that seeks to optimize each aspect of its marketing strategy will especially benefit from this.
On the flip side, although there’s ease-of-use, this model is not meant for all businesses. What’s more, it tries to give a very simplistic view of a customer’s journey.
The “time decay” model weighs every touchpoint differently. This model gives more weightage to the touchpoints that were engaged with closer to the conversion than those engaged with in the first part of the journey, assuming these had a more impact on the sale. It works on the assumption that the first touchpoint was just the start, so does not get the amount of weightage that the subsequent channels get. It’s a good model to measure long sales cycle, but on the cons side, it deals with customer journeys as a straight line, which is often not the case.
The “W-shaped” model uses the same concept as the U-shaped but there is one more touchpoint here – opportunity. Therefore, the first touchpoint, lead conversion, and opportunity creation touchpoints each receive 30% credit for the W-Shaped model. The remaining 10% goes toward the additional engagements. It gives a great overview of all your marketing touchpoints, and how they are connected to each other. On the flip side, it is still a simplistic model, that sometimes fails to acknowledge the complex customer journey, which goes beyond the three touchpoints that this model takes into account.
3. Multivariate analysis techniques
A more advanced method is a multivariate test. In marketing, multivariate means analyzing many variables from customer records so as to gain a better understanding of their behavior. So here, the model takes into account several variables of interest to determine which elements influence conversion. A variate is a weighted combination of variables.
In contrast to A/B tests, multivariate tests require more sophisticated software and statistical models. This makes multivariate tests more difficult to run and interpret, but the results can be much more accurate as compared to other methods. While A/B testing is a great way to find out what works for your website or app, multivariate testing allows you to fine-tune your message and target your customers more precisely.
This can be a crucial step to creating a truly effective campaign. There are several techniques available under a multivariate analysis like multiple regression or cluster analysis. The latter can be further classified as hierarchical, non-hierarchical, and a combination of both techniques. Using cluster analysis, for example, you can divide the individuals in your pool into groups and measure the performance of the different groups.
When it comes to digital marketing , each group could be considered a specific person in your target market. Your audience is divided into three groups by age, gender, or other factors. Then each group is measured to determine the best message for each group. After running the test, you’ll know which message drives the best results in each group.
Benefits Of Digital Marketing Attribution Modeling
- Measuring and improving the RoI of marketing campaigns
- Understanding the customer journey
- Determining how each touchpoint impacts consumers and whether they made a purchase or converted
- Choosing a channel
- Understanding which channels are most effective and focus on them
- Determining how customers engage with your brand and channels, helping your business, among other things, devise a plan on how to improve marketing campaigns
- Competing against rival companies. Competitors are constantly improving their products and service offerings. Therefore, understanding your competitors helps you to develop an effective marketing strategy.
- Helping you understand your business sector and its trends
In conclusion: In digital marketing, attribution models are the process of understanding how marketing efforts attract and convert prospects into customers. Touchpoints, or interactions with your customers, are the best way to do this.
Marketing contacts customers through a variety of channels, including email marketing, social media marketing, and SEO. In order to know which marketing channels are most effective for your company, the question – which are the most productive channels – must be answered.
Simply tracking the actions of people who visit your site or click on your ad is not enough. What drove them to take those actions and what were the different paths that brought them there is important to understand.
An Engine That Drives Customer Intelligence
Oyster is not just a customer data platform (CDP). It is the world’s first customer insights platform (CIP). Why? At its core is your customer. Oyster is a “data unifying software.”
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