Many marketers including myself face tough questions about how their efforts are bringing ROI to a company. For some marketing channels like search engine marketing, email marketing, or SEO, this can be a relatively straightforward process. Simply go through Google Analytics, figure out what channel was responsible for an individual clicking on an RAQ or "buy now" button, and report that as a win for said channel. However, there is something fundamentally wrong with this - particularly in the B2B space. What if someone has come to your site 6 times - once from social media, once from search engine marketing, once from a display ad, twice from SEO, and once directly. What about the other five visits in this example - should they not get credit? In my mind, the answer is unequivocally that all sources should get some sort of credit for the leads they are involved in regardless of where that is within a conversion funnel, and the reasoning is simple: just because a channel wasn't responsible for the final visit that led to a conversion, doesn't mean it isn't providing any value to the company or not helping to close the lead. If we go back to the example above for instance, if I no longer spend marketing budget on social media because it was only the first touch point in a lead, who is to say whether or not that the lead ultimately even converts from a direct search 5 visits later? While it might seem very difficult to solve this issue with multi-channel attribution, there is something you can do to make the value you assign to each of your marketing channels a bit more reflective of the role they actually played in generating a conversion - set up a multi-channel attribution model. Multi-channel attribution modeling is the process of understanding or assigning credit to each channel that played a role in helping a lead eventually generate a conversion for your business. Using an attribution model that reflects the various touch points a visitor makes when interacting with your business is a great way for a marketing team to allocate credit to the channels that preceded the final conversion during a customer's buyer journey. By looking not only at the last touchpoint before a conversion but at the entire sequence of events, it's possible to better allocate credit between every channel and campaign. While taking the time to set up an attribution model obviously doesn't increase the value of each of your marketing channels and touchpoints, it does allow you to spend your budget more effectively by ascertaining what each channel's actual value is to every sale your business makes. The success of digital marketing to generate a lead is often attributed to one channel, when in reality there are many assists from other channels that need to be taken into account as well. The purpose of attribution modeling should be to better understand the buying behavior of your website visitors. Any efficient attribution model you set up should be able to tell you why people buy from your website, what happens before they make a purchase, what prompted them to make the purchase in the first place, and what your most effective acquisition channels are so that you can properly invest in them moving forward.
Why Do You Need An Attribution Model?
Chances are that your business does currently have an attribution model. The problem is that your attribution model is most likely a first or last touch modeling, which is to say you're only considering the first or last source that brings a user to your website before they make a sale. What most businesses need in order to take themselves to the next level is a multi-touch attribution model. While they aren't perfect, multi-touch attribution models are infinitely more useful for a business than a simple last or first touch model. In fact, almost any type of multi-touch attribution model is preferable to a first or last-touch model in terms of getting your business one step closer to understanding marketing's true impact on your bottom line. Multi-touch is how actionable marketing impact modeling should be for any business moving forward. It is the only real way to gain visibility into a short time frame so that your business can make agile decisions around where to spend a marketing budget with the greatest ROI. With more and more budget moving into the digital landscape and tracking of real-time marketing getting more efficient, the need to for a model that is immediately actionable for a company is more important than ever before.
While attribution modeling can be extremely helpful when set up correctly, there are a few challenges that marketers and business owners need to solve before they are ready to get a working attribution model in place. The first is to form a very simple understanding of the fact that consumer interest is influenced by your marketing efforts as a whole. This means that things like paid search and display impressions, social media engagement, and PR placements play a direct role in the success or failure of your business. While it is almost impossible to untangle the tangible value of these efforts from marketing efforts that create direct leads like email or search engine optimization, understanding that the role they play is paramount to creating an attribution model that accurately reflects how each marketing channel is bringing value to your business. In addition to problems tracking impressions and engagement, companies also need to consider the existing brand equity that influences customer decisions, as well as offline marketing efforts that are difficult, if not impossible, to correctly track. While it is particularly challenging to factor these elements into an attribution model, marketers need to understand that while they might not see direct ROI elements like customer loyalty, offline efforts are certainly playing a role within their attribution funnel and should be included if possible. Aside from elements of your marketing efforts that can't be tracked or measured perfectly, marketers need to make sure that the attribution they currently have for their various marketing channels is correct. For most digital marketers this translates into making sure that your analytics are giving proper attribution and not attributing a visit or a lead to an incorrect channel. The best example of this is not correctly categorizing when traffic is coming from an email or a search engine and attributing it to direct marketing instead. This can cause serious issues for any business or marketing team because ROI is not correctly understood and mistakes are often made when trying to consider which marketing channels need more or less budget.
Attribution Models to Consider
There are many different attribution models to consider. When trying to figure out which one would make the most sense for your business it is important to think about how your sales process works - specifically which steps in the buyer process are the most important for generating actual sales. Each step in the buyer journey should be assigned credit for the work it did to close a lead - and the percentage assigned should be reflected of how much of a role they are playing in the conversion process. Here are some the traditional models that you might consider as a baseline for starting to set up the attribution model for your business: Last Interaction As we discussed earlier, last interaction is the default model for most companies who have attribution modeling set up. This model gives all of the credit for a conversion to the last touch point or traffic source of a lead and totally ignores any previous visits or touch points that a lead might have had with your business. The shortcoming of this channel is fairly obvious - other channels that are involved with your lead should be getting some of the credit for their work as well, not just the last source a lead came from. Another issue is that standard last interaction modeling can't take into account things like offline behavior or disconnected devices like mobile phones or tablets where behavior may continue before or after a lead has been created. First Interaction Although not as common as the last interaction attribution model, first interaction is a close second. This model gives all of the credit for a conversion to the first touch point or channel that brought a visitor to your site. This kind is best used if you suspect that a channel is undervalued because it is bringing a lot of visitors to your website, but few conversions. The obvious shortcomings of this model is that there is no consideration given to what channel is doing the work to actually close a lead and make it into a conversion and there is no way to measure how the channels between the first and last interaction are working to make sure that users are staying within the conversion funnel. Linear The linear attribution model takes an egalitarian approach to how each channel that was involved in a conversion receive credit, and gives equal value to each. So if you have a lead that came to your website 5 different times from 5 different sources, each source would receive 20% of the credit for closing the lead. While this model is a great way to evaluate the overall contribution of each of your channels, it doesn't take into account their position within the conversion funnel. First and last interactions are weighed exactly the same as all other touchpoints. Time Decay The time decay attribution model takes into account how close to a conversion each interaction occurs and rewards appropriately. This means that the last interaction will get the largest percentage of credit, followed by the second to last interaction, etc. This might be helpful if you're running a promotional giveaway or if you know that each interaction closer to a conversion is more important to get in the grand scheme of generating conversion for your business. This only drawback of this model is that it may undervalue earlier touchpoints if your business needs to play a large emphasis on generating an initial touchpoint with audiences. Position-Based The position-based attribution model is a variation we use at Blue Fountain Media. This is because the model gives more credit to the first and last interactions with a business while equally distributing the rest of the credit to middle interactions. For us, this is the most accurate default marketing attribution model to start with, as getting the initial interest in our service and expertise and closing our leads are the most difficult and important things for us. The middle touchpoints are more or less equally important for us because we want to make sure that people are moving down our conversion funnel and not losing interest, but they aren't as difficult or as important for us to get than the first and last touchpoints. The drawback to this model is if your business really needs a second or third touchpoint to close a sale for whatever reason - maybe you find that it is on second visits that people generally tend to so something important for you to turn that lead into a conversion further down the road, such as downloading a whitepaper or signing up for a newsletter. Customize While selecting the attribution model that most accurately reflects what your business looks for within your sales cycle is a good start, there should be customization around what kind of attribution each channel gets. Chances are, none of these attribution models really correctly or exactly capture what your brand needs from an attribution model, and they should be tweaked accordingly. For example, our position based model is slightly customized to reflect a sort of "W" attribution model that gives the most value to our first, middle, and last touch points. It is important for us that people come back in the middle of the conversion funnel so that we don't lose the lead's attention, and we make sure to result that step in the conversion process accordingly.
Attribution Isn't Perfect
When thinking about adding marketing attribution for your business it is important to remember that no matter what attribution model you pick, it won't give you perfect data. However, position-based, time delay and other customized variations that more accurately reflect the value that each touchpoint a customer has with your business will provide more actionable insights for your business than a simple last-click attribution. None of these models will give you an exact picture so understanding what model is as good as it will possible get is the sweet spot you're looking to achieve. Your model should provide you with more insights than you would have otherwise and allow you the confidence to spend your marketing channel in line with what your attribution model tells you. That being said, remember to not sideline attribution models after picking one - continuously test as you're able and go with the model that you find gives you the most actionable data.