As marketers, we’re well aware of the impact our efforts have on driving revenue. However, historically, proving it hasn’t been easy. Pinpointing the exact moment a prospect or lead makes the decision to purchase a product or service is often impossible, because we can’t read their minds. Was it when they opened a promotional email? Was it after they read a blog post? Did a sales rep push them over the edge? Or did they wake up in the middle of the night and make the decision based on the accumulation of knowledge they’ve collected across multiple interactions with the brand?
Unless they tell you, you may never know – and that makes taking credit for the conversion difficult. How do you prove that marketing had anything to do with a sale (even though to you, it may seem obvious)?
Enter attribution models – formulas for attributing the successful conversion of a lead or prospect to a specific activity or group of activities.
Attribution models are rules or sets of rules that determine how credit for a sale or conversion will be assigned to various touchpoints along the customer’s journey. These models enable us to better understand not only customer behavior, but the effectiveness of marketing activities and materials, so we can fine-tune them to deliver maximum impact and value. Importantly, attribution models give marketing teams a way to demonstrate that their efforts are essential to a company’s success.
There are different types of attribution models, each with its own set of benefits and drawbacks. Let’s take a look at the six most common models:
1. First click attribution
A “first click” attribution model assigns all the credit for a conversion to the very first channel – an ad, email or downloaded deliverable – with which a prospect engaged. For example, a prospect within the target audience sees a paid social ad on Facebook, clicks through to the website, and eventually buys something. In this case, 100% of the credit for the sale would be attributed to the Facebook ad, disregarding any impact made by the prospect’s experience with the website after clicking through the ad. First-click attribution models fail to provide a full picture of what prompted a customer to buy, because prospects typically interact with a brand through multiple touchpoints on their purchasing journey.
2. Last click attribution
Last click attribution models give 100% of the credit to – you guessed it – the last channel that the prospect interacts with prior to making a purchase. Say someone links to your website from a blog post that your content team created. In last click attribution, the blog post wouldn’t get any credit at all; the sale would be attributed to the website. This model assumes that the last touchpoint is what convinced the buyer to make the purchase (and ignores the impact of previous touchpoints).
3. Linear attribution
This model is a multi-touch attribution model that distributes credit evenly across all touchpoints along the buyer’s journey, acknowledging the impact of multiple brand interactions prior to the decision to buy. For example, if a customer clicks through a social ad to the website, downloads an ebook, then requests a meeting with a sales rep after receiving a follow-up email that was triggered from the download, the social ad, website, ebook and email would all receive 25% of the credit for the sale.
4. Time decay attribution
Time decay is a weighted attribution model that assigns more credit to interactions that happen closer to the moment of conversion. For example, a time decay model might follow a 7-day half-life formula, where an interaction eight days prior to conversion gets half as much credit as an interaction one day before conversion. Like linear attribution, time decay is a multi-touch attribution model, which takes into account the impact of multiple touchpoints along the buyer’s journey.
5. Position-based (U-shaped) attribution
For this attribution model, picture a horseshoe. The first interaction is on one side, and the last interaction is on the other. In between could be any number of touchpoints. If a buyer converts, more weight is given to the first and last touchpoints – typically 40% each – and the rest of the credit is distributed evenly amongst the other touchpoints in between. For instance, if a prospect receives a promotional email, clicks through to a blog post, then browses your website, the email and the website would each receive 40% of the credit, and the blog post 20%. Position-based attribution is another multi-touch model that takes into account the influence of various brand interactions on a sale.
6. Data-driven attribution
This model differs from the other models in that it leverages account data to calculate the actual contribution of various interactions throughout the buyer’s journey. It looks at the keywords, ads and campaigns with which the prospect interacted, and compares the paths of those who converted to those who didn’t. The goal is to identify patterns and enable you to zero in on the activities and deliverables that work the best. Data-driven attribution is more accurate than other models, because it tells you which interactions have a higher probability of prompting a lead to convert to a customer.
Which attribution model should you use?
Well, that depends. Today, most organizations choose to leverage multi-touch attribution because they understand that the decision to purchase a product or service is a complex one that requires a lot of convincing, particularly in B2B scenarios where substantial investments are being made. A single ad or email is unlikely to convince a buyer to take the leap – they’ll need to read supporting materials, join informative webinars (like this one we hosted with Adobe), review case studies, and see product demos. Multi-touch attribution models also provide marketing teams invaluable insights that can be used to improve their strategies and materials, to achieve higher conversion rates in the future. Overwhelmed yet? You're not alone.
If you need help determining the best attribution model for your organization, BDO Digital can help. Learn about our Reporting and Analytics capabilities, and reach out to us to discuss your specific needs and explore potential solutions for attributing credit for conversions. With attribution data and reporting at your fingertips, you’ll find it much easier to demonstrate marketing’s impact on revenue to management, the sales team and other stakeholders throughout your organization.
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