Contents
- What is an attribution model?
- Why use an attribution model in marketing?
- Types of attribution models
- Which attribution model to choose for a business?
What is an attribution model?
An attribution model is a set of rules that allows the distribution of value among various consumer interaction channels. In most cases, the customer's path to purchase is complex and involves multiple stages. For instance, a potential buyer may first learn about a product through an advertisement on YouTube, then visit the website but not make a purchase. After that, they might see targeted ads on social media, click on one, and subscribe to a newsletter. Finally, upon receiving an email with a discount coupon, they return to the website and place an order. Each of these steps is important, and the attribution model helps determine the value of each in the purchasing decision process. Each contact point on the customer's path to purchase has its share of the total value, which amounts to 100%.
Why use an attribution model in marketing?
Using an attribution model in marketing offers numerous advantages, including, but not limited to, the following:
- Effective budget allocation among various promotion channels;
- Optimization of advertising expenses, especially when paying for conversions;
- Increased return on advertising investment;
- Optimization of promotion strategy by identifying the most effective channels and eliminating less productive ones.
Attribution models help understand the value of each touchpoint on the path to conversion. For example, the first contact may not lead to a high conversion rate but can still have a significant impact on the user's subsequent actions.
Types of attribution models
There are several common attribution models that allow for the assessment of the value of each touchpoint on the path to purchase:
- First interaction attribution: 100% of the value is assigned to the first contact point that initiates interest in the product.
- Last interaction attribution: 100% of the value is assigned to the last interaction channel that directly leads to the purchase.
- Last non-direct interaction attribution: 100% of the value is assigned to the last non-direct visit to the website, which may include clicks from ads or search engines.
- Linear attribution model: The value is evenly distributed among all contact points.
- Time decay attribution: The closer the contact point is to the purchase moment, the greater value it receives.
- Position-based attribution: The highest value is given to the first and last contact points, while the rest share the remaining value.
- W-shaped attribution: It is important to consider not only the first and last contact but also key interactions in the middle of the path.
- Full path attribution model: Reflects all interactions with the customer from the first contact to the sale.
- Data-driven attribution: Uses algorithmic methods to assess the actual significance of each touchpoint.
Which attribution model to choose for a business?
For successful application of an attribution model in business, it is recommended to test different approaches to choose the most suitable option for current goals and tasks. The main factors influencing the choice of model include:
- Conversion window: For niches with a short sales cycle, last-click models are preferable, while for longer processes, first-click attribution should be considered.
- Number of promotion channels: It is important to consider that the more interaction points there are, the more complex the attribution model will be.
- Volume of collected data: Small companies may use simple models, while larger firms can apply more complex algorithmic approaches.
- Marketing objective: Depending on whether you need reach or increased conversion, choose the appropriate attribution model.
Ultimately, the right attribution model can significantly improve the effectiveness of marketing campaigns, helping businesses better understand their customers' behavior and optimize their strategies.