Customer Attribution

Customer Attribution

The Role of Attribution in the Customer Journey

If you are running an online store, the most pressing question you might have is, ‘What made the customer buy from your store?’.

Did they click an ad on Instagram? Did they land the website through email promotion? Did they visit your website again after a push notification? Did they see your blog or visited your Facebook page?

There are so many different ways to find, attract, convert a customer. Keeping track of those ways can be a little cumbersome when you are reaching the audience through various touchpoints. This is where marketing attribution comes into play.

What is Attribution?

Marketing Attribution lays down a clear path of different interaction opportunities your customer have with your brand on their path to purchase so that you can credit the channels or campaigns that leads to the conversion. Too many buzzwords, right? Let me break it down for you -

Credit: The value you assign to a given marketing touchpoint. Let's say you have three different campaigns on Google Analytics, Facebook Ad and Display Ads. Credit describes the importance you give to these different channels. Depending on the type of attribution you decide to run, different credit is given to different marketing channels.

Touchpoint: A touchpoint is any interaction a prospect has on their path to becoming a customer. For example, clicking on a Google Ad.

Conversion: A conversion is any action taken by a visitor that's important to you, most commonly referred as the visitor making a purchase

Types of Different Marketing Attribution

There are many different attribution models available to marketers, and there is no one size fits all for every business. It just depends what you hope to distill from the data. Once you have that understanding, you then select the model depending on your specific strategy and campaign objectives. Some of the questions you can ask yourself before you implement the right attribution model are, Do you want to see what source is driving the most conversions? Do you want to see what product someone viewed before they made a purchase? Where is the best place to invest my marketing resources?

We have briefly outlined the six common attribution models below to help you understand the customer journey.

Recurring Example - Let's say a customer finds your site by clicking one of your Facebook ad. He returns one week later by clicking the link in the email. That same day, he comes back a third time via one of your Display campaigns, and a few hours later, he returns again directly and makes a purchase.

Now, we'll see how each attribution model assigns different credit to each marketing channel mentioned above.

First Click Attribution —

This model assigns 100% credit to the first touchpoint in the customer’s conversion path. This model is good in showing which of your TOFU (Top of the funnel) campaigns is best at generating traffic and capturing the attention of the prospects, however, the downside of implementing the first click model is the high-value touchpoints down in the sales funnel are overlooked.

Another great thing about the First Click Attribution model is its ease of implementation with Google Analytics.

Analysis - In the first-click attribution model, Facebook Ad will receive 100% of the credit.

First Click Attribution

Last Click Attribution - 

The last-click attribution model is the exact opposite of the first-click attribution model. This model assigns 100% credit to the last touchpoint in the customer's conversion path. It can tell you what channels are most effective at driving conversion at BOFU (Bottom of the Funnel). Hence, you can give the prospects the final push they need. However, opposite to the first click model, it undervalues the upper-funnel campaigns.

If a long research process is involved in buying a product, then the Last click is not the most effective attribution model, as the model will neglect all of the other marketing campaigns that played a part in influencing the sale.

Let's say a customer finds your site by clicking one of your Facebook ad. He returns one week later by clicking the link in the email. That same day, he comes back a third time via one of your Display campaigns, and a few hours later, he returns again directly and makes a purchase. In the first-click attribution model, Facebook Ad will receive 100% of the credit.

Analysis -  Here the Direct channel would receive 100% of the credit for the sale.

Last Click Attribution

Linear Attribution-

A linear attribution model distributes the credit for the conversion equally across all ad interactions on the path. Every point is considered and valued — but the problem is when all the channels receive equal credit, how can you possibly tell which channels are contributing the most value to the conversion path? This model is most effective in measuring overall campaign conversions and finding which channels are consistently influential during a customer journey.

In Linear Attribution, “Basically everyone on the team gets a trophy.” as it is near impossible to choose a winner.

Analysis - In Linear Attribution model, every channel would share equal credit (25% each) for the conversion.

Linear Attribution

Time-decay  Attribution -

The time decay is a simple algorithmic model that gives some credit to the interactions that led up to the conversion, with more weight given to clicks that happened closer in time to the conversion. It is useful in showing you all of the channels that played a part in generating the conversion and which channels did the best job of getting leads to convert into a sale

Time decay can give you a great idea of what's closing purchases, but not always what attracts a customer in the first place. If you have a business with TOFU (Top-of-the-funnel) campaigns, the campaigns that pay the most attention to the first interaction with the customers, then this is not the best attribution model to implement.

Analysis - In this particular case, the third and the fourth channels would receive the most credit because the customer interacted with them within a few hours of conversion, while the first and second will be given less credit.

Time-decay  Attribution

Position-based attribution (U-shaped attribution) - 

A position-based (or U-shaped) attribution model gives 40% of the credit to both the first and last ad interactions, with the remaining 20% spread out across the other ad interactions on the path.

The model can help you find out which channels to focus on to attract new customers in and which channels to focus on increase conversion. But, keep in mind that it can drastically undervalue the middle and over-report on both ends.

Analysis - In this case, Facebook Ad and Direct marketing will get 40 percent of the credit, and the remaining 20 percent credit will be divided between Email and Display campaigns.

Position-based attribution (U-shaped attribution)

and lastly,

Custom Attribution

This model is often referred to as data-driven attribution. It distributes credit for the conversion based on your past data for this conversion action. When you have enough data available to acquire an in-depth understanding of your customers and their buying behavior, you can allow machine learning and AI to dictate which touchpoints deserve the most amount of credit. This is the only model that gives marketers the most accurate representation of their marketing campaigns.

Conclusion :

This wraps up an overview of attribution modeling.

Marketing attribution is an intricate process, and there is no quick way around it.  As a business owner, your first step should be to list down top goals. You can then play with different models to get invaluable insights about how and where customers are interacting with your brand on their path to making a purchase.

Ultimately, your business will likely have to utilize several attribution models in tandem to understand each prospect’s journey.

For more information or questions; or to learn how aarzoo could assist you in understanding the landscape of attribution, talk to us at listen@aarzoo.co

Author
Siddharth