Marketing used to be a lot simpler. Businesses had just a handful of channels to operate in, making assigning credit for purchases a fairly trivial task. These days, channels have proliferated and we have seen a vast increase in the number of consumer touch points. Attribution modeling is one of the best solutions for tracking sales costs and campaign success.
Attribution modeling explained
As the complexity of marketing processes has grown, simple yet critically important tasks — such as determining the source of sales and conversions — have become markedly more difficult. Customers typically don’t just go straight to a website and click the buy button. Sales are usually the result of multiple interactions across a variety of platforms prompted through a series of messages or interactions.
Attribution modeling is a framework that allows organizations to gain greater visibility into how credit for sales and conversions should be awarded or divided. There are multiple ways to model or map out credit. These model varieties serve as a set of rules for how credit is assigned to specific touch points within conversion paths.
To better illustrate how this works; let’s take a look at some basic attribution models.
First and last interactions models
Under these rules, a single source earns credit for the sale. Using the first interaction model, the touch point that initiates contact (perhaps a downloaded white paper) would receive full credit for any sale or conversion. Under the last interaction model, the final touch point (something like a sales call) earns all the credit. While these are fairly easy to implement and track, they don’t always provide a full picture of how a customer arrived at a buying decision.
Linear, time decay and U-shaped/position-based models
Under these rules, multiple sources can receive credit for sales. The linear model attempts to give every touch point equal credit, while the time decay model gives greater weight to touch points that are later in the buying process. The U-shaped/position-based model gives greater weight to early and later touch points and reduced credit to those in the middle.
Choosing the right attribution model depends on a variety of factors, including the amount of data that is accessible and the overall complexity of the marketing campaign. Simpler campaigns with fewer moving parts may have enough visibility to make one-source attribution models a viable choice. Businesses may also create their own custom attribution models that assign weight to touch points based on their own specified criteria.
Given the challenges businesses face in the realm of digital marketing, developing a useful model for assigning credit is an essential part of generating accurate ROI assessments. Companies that make this a priority will earn a significant competitive edge when designing sophisticated multi-platform marketing campaigns.
Modeling the next step
If your business is aiming for more ROI clarity and better multi-platform campaigns, a top Florida advertising agency like BIGEYE can help make this a reality. We have the technical chops and marketing expertise to help you deploy the most accurate and effectiveBack to Thinking