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Understanding Marketing Attribution and Marketing Attribution Models for Businesses.

Updated: Mar 13




What is Marketing Attribution?


Marketing Attribution is a systematic approach to understanding the relative impact of all marketing initiatives across all channels – paid search, organic search, display advertising, email marketing and direct traffic – and measuring their overall contributions to business goals. The process assigns credit for an interaction (e.g., a click) with your website to the appropriate marketing channel (e.g., organic search, display advertising).


The concept behind attribution is simple; every interaction contributes toward influencing a final outcome (i.e., purchase), and you must assign credit in proportion to its contribution toward that outcome. If 50 percent of conversions happen after three sessions, then 50 percent of the credit for conversions should be assigned to the session in which it occurred.


The model works because it's simple and logical, but there's no one-size-fits-all method; each organization must optimize its own process based on data, goals and business practices. This post aims to provide an overview of the ways you can approach attribution and achieve desired results.


First, let's define a few terms:


Terms;

Marketing Interaction – a click or other type of interaction with your marketing channels (e.g., paid search, organic search, display advertising) that generates traffic to your website; also referred to as "touch" or "touchpoint."


Marketing Channel – a group of marketing interactions taken together as a whole (e.g., paid search, organic search, display advertising). Marketers often create segments to focus on specific channels by excluding other channels that were not part of the interaction.


Firmographics – demographic data used to inform digital targeting (e.g., age, gender, income). Paid search marketers often use demographic data to help determine which keywords and audience segments to target.


Conversion – a conversion is an online action that has value for your business (e.g., making a purchase, completing a lead form or generating leads from social media). Goal conversions are an even more specific subset of conversions that represent website goals.


Outcome – the ultimate business goal for each conversion (e.g., revenue, leads or signups), also referred to as "business outcomes."


 



Marketing Attribution Models

The marketing Attribution model is a process that uses various data points and tools to measure the effectiveness of each marketing channel used on your website. The objective is to determine which channels are producing results both in terms of traffic and conversions as well as those channels leading to high-quality leads.


Without knowing how many visitors came from what source, you won't be able to optimize your marketing and advertising initiatives, which usually leads to wasted budget and missed opportunities.


Every website has a marketing attribution model embedded in it; the difference is that we use specific tools and processes that speed up the process of making sense of all the data. The idea is that by using these tools and implementing this model, you will be able to identify what works and what doesn't, maximize your revenue and learn from your mistakes.


An attribution model assigns conversion points to different touchpoints that are part of your sales conversion path.

First Touch.

The first-touch attribution model gives full credit to the first touchpoint on the customer's journey. This model is simple and easy to calculate, but it doesn't take into account that customers might be finding you through multiple channels.


The U-shaped.

The U-shaped (position-based) attribution model assigns the majority of the credit to two stages and the remaining credit is divided between every touchpoint in between. A typical scenario is either a big win at the beginning of the process or a big win at the end. This model is useful for understanding performance and optimizing your effort to bring more traffic and conversions into these strong positions, but it's not good for attributing revenue.


Geographical.

The geographical attribution model assigns credit to marketing interactions based on their geographic origin. For example, if the purchase came from Toronto then all of the credit goes to organic search; if it came from Winnipeg then all of the credit goes to paid search, and if it came from Calgary then all of the credit goes to display advertising.


The W-shape.

The W-shape (position-based) attribution model assigns the majority of the credit to three stages and the remaining credit divided between every touchpoint in between. This model assigns the majority of credit to the beginning of the process, but it also measures performance throughout. It's useful for attributing revenue and driving optimization efforts.


Linear Position-Based.

The linear attribution model assigns credit equally to each touchpoint on the customer's journey. The linear position-based attribution model assigns equal credit to all interactions within a marketing channel. At the end of each touchpoint, one hundred percent of the available credit is assigned to each interaction.


Time decay.

With a time decay attribution model, marketing interactions occurring closer to the conversion are given more credit and interactions occurring a long time before the conversion are given little or no credit.


Last Touch / Last Interaction / Last Click.

The last-touch attribution model gives full credit to the last touchpoint on the customer's journey. This model assigns 100 percent credit for all conversions to any marketing interactions completed in the last session. This method is at odds with a key tenet of attribution, which is that each interaction contributes to business outcomes in proportion to its influence.


Although it can be complex, understanding marketing attribution is crucial for business owners who want to make the most of their marketing efforts. Thankfully, there are a variety of helpful tools and models available to make the process easier. If you need help getting started or would like more information on how marketing attribution can benefit your business, reach out to us. Our team is happy to provide assistance and guidance as you work to create an effective attribution strategy that drives results.

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