The Ultimate Guide To Attribution For Dummies
The top 5 attribution models you must know
In the world of digital marketing, marketers are drowning in data. It is virtually impossible for us to manage each of them systematically, let alone scientifically.
Hence, we need priorities. We need to prioritize the data that are more important. For example, in the world of fitness you tend to do compound movements first to build that solid foundation for optimum overall muscle growth. Only then you proceed to isolated movements to fine tune and hit the muscle group individually.
Question is, can this be applied to the marketing world? Are certain data more imperative than others? If so, which?
If you ask me, the answer is clear — Attribution Data. More specifically, how do we attribute the importance of each touch point in a converted customer’s journey?
This is the exact data that can make you (unfortunately, it can also lose you) tons of resources if you attribute as accurately as possible.
Hence if you are running your own business and have ventured into the ambiguous yet magnificent world of digital marketing, you will want to read on.
Now let us get into it, what are the different methods of attribution?
Introducing to you a loving father to 2 children, John. His daughter has failed her Chinese subject in her recent school exams. John went to Google and typed “Best Chinese tutor”. Due to his very decisive nature, he clicks on one of the advertisement links and signed up for a class straightaway.
Now, in this overly simplified scenario, the tuition centre will attribute 100% of this sale to “Pay Per Click” advertising.
In a parallel universe, John now decides to go to Facebook and search up this tuition centre. He sees photos of impressive past students, the positive testimonials, and comments. He is amazed, he is sure that this tuition centre will be able to help his daughter! John then proceeds to hire the tutor on Facebook.
Now John’s journey involves 2 touchpoints before converting, Google PPC and then Facebook. How do we attribute this sale now? How much did PPC and Facebook individually contribute to the sale? Is it 50–50? Is PPC more important since that is the first touchpoint?
This information is CRUCIAL for marketers to determine where to double down on their marketing dollars to maximize their return-on-investment (ROI).
Keep in mind, this is only a 2-touchpoint scenario. A research from Teradata shows that an average online purchase of goods and services requires as many as 5 to 10 interactions. In certain cases, it can be more than 10 interactions!
In John’s case, he could have well left without buying after visiting FB. Due to his busy schedule, he had forgotten about this. A few days later he clicked on a retargeted ad while he was on Instagram, which he still did not convert. A week later he comes across a blogpost that had a backlink which directed him to the tuition centre’s website before finally converting.
This is where an attribution tool will come into play. Let’s try to visualize John’s journey:
There are 5 rule-based method of attribution namely first-touch, last-touch, linear(uniform), time-decay(exponential), and position-based attribution. Let’s go through each of these using John’s example as shown above.
1. First-touch Attribution
As the name suggests, it gives 100% of the credit to the first touchpoint of the customer’s journey.
In John’s case, the entire sale will be attributed to PPC. It completely ignores ALL other touchpoints that succeeds the first touchpoint.
This approach is slowly fading out from the industry as it is just inaccurate. Any sane person will tell you that each of these touchpoints play a role that leads the customer to the conversion.
In John’s case, recall that he has totally forgotten about the tuition centre after checking out their FB page. Without a retargeting IG ad, the sales will most certainly not go through.
Do you see how inaccurate this kind of attribution is now?
2. Last-touch Attribution
This is the mirror opposite of first-touch attribution. It attributes a 100% of the conversion to the last touchpoint in the customer’s journey.
In John’s case, 100% of the sale will be attributed to the blogpost (or SEO efforts).
This attribution rule is becoming less popular today as well. It is just a mirror of the first-touch attribution and it fails equally miserably at giving marketers a holistic understanding of the actual customer’s journey.
3. Linear Attribution (Uniform Attribution)
This attribution rule assumes that all touchpoints are EQUALLY important to the conversion. No one touchpoint is more important than another.
In John’s case, it will be 25% attributed to each of the 4 touchpoints. This tells marketers to pay equal attention to each PPC, FB, IG, and SEO.
Neil Patel has famously proclaimed his strong preference towards the Uniform Attribution. His reasoning is simple: If a customer saw your IG ad, but did not like your blogpost, he/she will NOT convert, period. Each medium helped to propel the customer closer towards the conversion.
Think about it, FB pages are most likely never meant to close deals for John’s case. Facebook just isn’t built for users to click a checkout button for tuition classes. But it is the perfect platform to post success stories of past stellar students. For example, a student who was barely passing his exams, scored an A after just 3 months with the centre. You get the picture now?
4. Time-decay attribution (Exponential Attribution)
This may sound like a complex model, but it is simply based on the assumption that touchpoints are increasingly more important leading up to the date of conversion.
This model gives the most credit to the last touchpoint, while still attributing previous touchpoints, albeit in lesser proportions.
Let’s go back to John again. SEO efforts are the last touchpoint which pushed him through the finish line to convert. This tells marketers to allocate more resources into blogposts, be it hiring more copywriters or implement more cross-content collaborations with related markets.
Time-decay tells marketers to place a huge amount on emphasis on blogposts AND still allocate resources into the Instagram page, Facebook business page, and paid-per-click in diminishing proportions.
Do not get me wrong, this model is not straightforward by any means. But it is worth delving into time-decay attribution to really understand how the different touch points contribute to your sales.
5. Position-based Attribution
This rule is particularly interesting. It typically assigns 40% to both the first and last touchpoints and divide the remaining 20% equally amongst the middle touchpoints.
The logic is that the first and last touchpoints are the most important in a customer’s conversion path.
The first touchpoint is what introduced the customer to the brand. If the tuition centre did not pop up when John searched “Best Chinese Tutor”, then he would not even had gone to the tuition centre’s Facebook page. Thus, position-based attribution gives more importance to PPC compared to FB.
Meanwhile, the last touchpoint is the final thrust to push the customer past the finish line. There could be some triggering points here that finally made an aware customer a paying customer.
It can be illustrated as such:
Here we attributed 40% to pay-per-click advertising, 10% to Facebook, 10% to Instagram and 40% to Blogposts (SEO efforts). It gives marketers a holistic understanding of the entire customer journey.
You may be wondering why is the first and last touchpoint given 40% attribution instead of any other arbitrary number.
And you are sharp because that is a very good question.
The standard is to attribute 40% to the first and last touchpoints. But I believe it can be 30%, 35%, 45% or literally any other numbers. It is up to you and your company to decide which one is the best for your product and your customers’ journeys. Many things in the marketing world are about testing, testing and more testings.
You decide what makes the most sense for YOU.
Thoughts
Cool. Let’s recap.
We have a total of 5 rule-based attribution models, namely first-touch, last-touch, linear, time-decay, and position-based attribution.
And if you are new to this, I implore you to spend some time on this for your company. It is THE one single bolt that cannot be missing in your E-commerce machine.
You may be wondering (at least you should), why isn’t every company with an online presence implementing attribution tools? Well, it boils down to one thing — ROI. Return-on-investment is based on 2 factors: The incremental money it helps you earn and the cost of implementing it.
In today’s market, a decent attribution tool is ONLY accessible to companies with tremendous funding or have big marketing dollars. It is easily a 5 to 6 figure commitment per annum and Small and Medium Companies (SMEs) simply cannot afford it.
Which is why we, at BeamDance are out to change this. We want to make attribution accessible to everyone. And we are putting the finishing touches to this revolutionary tool as we speak. So no, unfortunately, even if you wanted to use it now, it is not ready yet!
Gone are the days where you guess/estimate how you are going to allocate resources into each touchpoint. You will be able to pinpoint EXACTLY how much to spend to maximize your return-on-investment.
And more importantly, I do not want you to burn a deep hole in your wallet for this. It MUST be affordable. Our goal is to make it accessible to all companies, regardless of it being an MNC, SME or a start-up.
So, if you are serious about understanding your customers’ journey fully, you can use the tool for FREE once we roll it out. Just reserve your spot here as a free trial user for this revolutionary attribution tool.
Reserve a spot with us now and start understanding your customers’ journeys like never before.
See you at the product launch!
About the Author
As a data scientist, Admond Lee is on a mission to make data science accessible to everyone. He is helping companies and digital marketing agencies track and achieve marketing ROI with actionable insights through innovative attribution and data-driven approach.
His story and data science work have been featured by various publications, including KDnuggets, Medium, Tech in Asia, AI Time Journal and business magazines. Besides, he has been invited to speak at various workshops and meetups.
With his expertise in advanced social analytics and machine learning, Admond aims to bridge the gaps between digital marketing and data science.
Check out his website if you want to understand more about Admond’s story, data science services, and how he can help you in marketing space using data science.
You can connect with him on LinkedIn, Medium, Twitter, and Facebook.
