The role of attribution in marketing — Review
I’m now at the halfway mark of the Growth Marketing minidegree program by CXL Institute. This week, I’ll be talking about attribution and the role it plays in marketing.
What is attribution in marketing?
In short, attribution in marketing is the analytical science of determining which marketing tactics are directly contributing to sales or otherwise conversions. The key is understanding the context behind the data which begins by understanding the consumer and their respective journeys.
The practice involves evaluating marketing touch points that consumers encounter on their path to conversions. The goal is to determine which channels and messages had the greatest impact on the decision to convert, or otherwise take the desired next step. There are a number of attribution models that have been developed and are used by modern day marketers of which its insights as to how, where and when a consumer interacts with a brand allows marketers to alter and customise campaigns to meet the specific desires of individual consumers, thereby improving marketing return on investment (ROI).
Why is attribution in marketing important?
Attribution requires marketing teams to aggregate and normalise consumer data from across channels to ensure each interaction is properly weighted. This allows marketers to better understand how well campaigns are performing. In order to achieve a desirable marketing outcome, marketers needs to change the concept of how attribution is viewed from being less of a math problem and more about understanding how marketing impacts consumers.
In order to achieve the level of data granularity required for effective attribution, marketers need to accurately and efficiently distill big data into consumer-level insights that can be used to optimise campaigns. It becomes important to then determine what data goes into attribution models.
A good food for thought for marketers before embarking in attribution is to ask yourself: what do you wanna get out of attribution? This is something that is individual to each business.
Attribution in marketing tools
Today, there are many tools that can be used to calculate attribution such as Google Attribution and Nielsen Attribution (formerly known as Visual IQ).
Attribution in offline marketing
As digitally-led as we have become, marketers need to remember that attribution is still required to understand the performance of offline marketing activities such as print, TV, radio and out of home. These days, there have been many advancements made in offline channels that has made tracking possible. For example, television has now evolved to video on demand. Soon enough, we’ll be able to track videos being viewed to individual households. This unlocks a vast amount of information that we can put into attribution models to align the performance of media and subsequently, the campaigns of an individual purchase and conversion online and to store. Retail has a huge opportunity to connect points of sale dates such that when consumers go into a store, the details of when that consumer purchased and what they purchased can be passed up back into an attribution model. A trend that we’ll see is ROPO — research online, purchase offline or research offline, purchase online. This would depend on one’s goal and how to make use of the data available.
Attribution models
There are five main attribution models:
Last Non-Direct Click
This model gives full attribution credit to the last touch point the consumer interacted with before making a purchase, without accounting for prior engagements. Google Analytics uses this as a basis for conversions.
Last Interaction Attribution
This model takes into account the actual last interaction in the customer journey, which is useful when linking offline to online. Brands who use PPC thrive on this kind of attribution whereas display ads and SEO will do poorly.
Linear Attribution
This model distributes value to every interaction equally. The flaw with this model is that it doesn’t show the specific campaigns or channels that directly impacted the consumer, so it cannot be used to understand why a consumer interacted with a specific marketing activity.
Time Decay Attribution
This model redistributes value back to pre-historic visits that are scaled back over time when conversion happens. This means that the lowest attribution value is placed on the first interaction and the highest attribution value is placed on the last interaction. Many organisations find value in this model as it accounts for how far back the previous interactions took place in the customer journey. There are two ways to implement this attribution model:
- Static: In this instance, marketers assign a fixed percentage to all interactions
- Variable: This takes into consideration the amount of time between each interaction when giving a value distribution
Position-Based Attribution
Popularised by Google Analytics as the most accurate attribution model, the first and last interactions are given the credit. The benefit of this model is that it is aligned with how consumers actually behave.
All of the above attribution models will generate different results as it measures the importance of consumer touch points differently. When it comes to inputting the needed values into the attribution models, marketers need to be conscious about not deciding the importance of a touch point but instead consider the factors to include in the model. The more apt question would be — what is most important to a consumer that we want to give to an algorithm to gauge how important it is? This could be the device (mobile versus tablet versus laptop) or certain keywords.
Which model do I choose then?
This would largely depend on your business. The right model is the one that’s right for your business. Some questions to think about when choosing the right attribution model includes:
1. What type of sales cycle do you use?
2. How long does your sales cycle run?
3. How much of your sales takes place online versus offline?
4. How much of your marketing efforts are focused on offline activities?
Ultimately, you may find yourself utilising several attribution models in tandem for a more complete and holistic understanding of the impact of your marketing efforts.
