26 May An introduction to attribution modelling
Attribution modelling is the method used to determine the monetary impact a marketing communication has on sales, customer retention, revenue and profit. This attributes credit to the touch point(s) within the consumer journey that is considered to be responsible for a conversion.
A recent whitepaper from Bloom Worldwide titled ‘Digital Marketing ROI: An Introduction to attribution modelling,’ explains that “the primary objective of attribution modelling is to provide holistic, accurate information about the financial return activities are delivering so you can refine them, adjust what you’re doing, and use the same budget to deliver more value to your business and your customers.”
We are now going to take a look at the seven most common types of attribution models and provide a breakdown of how they analyse sales data:
John Murphy acknowledges in The Drum that this attribution model is both the “most commonly used and one of the most inaccurate.” This model credits 100% of a sale to the last touch point a user visits before purchase.
This is essentially the opposite of the last interaction model. An example of this would be a consumer discovering your brand via a paid search channel and then making a purchase. The paid search channel would receive 100% credit for the sale.
This is similar to the last interaction model; however, the credit for the sale goes to the latest non-direct click that the consumer interacts with before conversion, for example email. So the cause of that purchase is not the direct visit itself, but the one that pre-empted that direct visit.
Google Analytics states that when using this model ‘the first and only click to the Paid Search channel – would receive 100% credit for the sale.’
This model states that every point of the customer journey is equally responsible. Therefore, every touch point that the consumer clicks through, shares an equal credit for the sale.
This model takes into account the journey that the consumer takes, which leads to conversion. The position based attribution model assigns 40% credit to the first and last touch point, and the remaining 20% is spread evenly amongst the middle interactions.
The main principle of this model is that the touch point closest in time to the sale or conversion receives the most credit. The most recent touch points are considered to have a greater influence on the purchase decision.
Overall, no attribution model is perfect, and it is important for brands to recognise that the more bespoke these models are to a company’s communication strategy, the more accurate the results. Furthermore, brands’ attribution models need to consider offline engagement; this will provide a more detailed understanding of the consumer journey, and how factors such as WOM and television can affect a purchase decision.