Today's marketing landscape is more complex than ever. The average customer journey involves interacting with many different ads and marketing touchpoints before making a purchase. As a marketer, it's essential to understand how these touchpoints contribute to conversions in order to optimize your campaigns for maximum ROI.
At its core, attribution modeling is a way to assign credit for marketing conversions to different marketing touchpoints. This information is essential for making data-driven decisions about where to allocate your resources. By understanding how marketing touchpoints interact with each other, you can create a well-integrated marketing strategy that reaches buyers at every stage of the buying process.
There are many marketing attribution models to choose from, and it can be tough to determine which one is right for your business. To choose the right model it's important to understand the options available and how they work. In this article, we'll break down the different types of marketing attribution models and explain how to choose the right one for you.
Single-touch attribution models
The are two main types of attribution models: single-touch and multi-touch. Single-touch assigns credit to a single touch point. Multi-touch attribution models, on the other hand, assign credit for conversions to multiple touchpoints.
Within each category, there are several models you can choose from.
1. First-touch marketing attribution
First-touch marketing attribution models assign all credit to the first marketing touchpoint a buyer interacted with. For example, if a buyer saw an ad on social media, then clicked on a paid search ad, and finally made a purchase, first-touch marketing attribution models would assign all credit for the conversion to the social media ad.
First-touch attribution models, like single-touch models in general, are simple to use and easy to understand. However, they don't take into account all the other interactions a buyer has with your business along their journey and give a disproportionate amount of credit to a single point.
2. Last-touch marketing attribution
Last-touch marketing attribution models are a type of marketing attribution model that assigns all credit for conversions to the last marketing touchpoint a buyer interacted with. For example, if a buyer saw several paid search ads, then an Instagram ad that they clicked on and made a purchase, last-touch marketing attribution models would assign all credit for the conversion to the Instagram ad.
Since this type of marketing attribution model assigns all credit to the last marketing touchpoint, it helps you identify which marketing channels are driving the most conversions. It's often difficult to track the interactions that a single buyer has with your company and easier to pinpoint their last touchpoint before conversion. However, last-touch marketing attribution models may obscure the impact of marketing touchpoints that come earlier in the buyer journey.
3. Last non-direct click
Last non-direct click marketing attribution models assign all credit for conversions to the last marketing touchpoint that was not directly influenced by the buyer. Let's imagine a buyer saw an ad on social media, then Googled the brand and bookmarked the online store. Later, they clicked on a paid search ad and then clicked to the brand's online store from their bookmarks. Last non-direct click marketing attribution models would assign credit for the conversion to the paid search ad.
Last non-direct click helps you better assign credit than the last-touch model because it stops credit from going to clicks where a buyer already knows about your business. However, just like with first and last touch models, it gives all the credit to a single touchpoint.
Multi-touch attribution models
A multi-touch attribution model assigns credit for a conversion to more than one marketing touchpoint. There are a variety of different multi-touch attribution models, and they all weight credit for conversions differently, according to a set of rules.
4. Linear attribution model
Linear marketing attribution models assign equal credit for a conversion to each marketing touchpoint in sequence. For example, if a buyer saw an ad on Instagram, then a paid search ad, then a Facebook ad, and finally clicked to purchase from another Instagram ad, linear marketing attribution models would assign equal credit to all these touchpoints.
Linear marketing attribution models can be an effective way of measuring the impact of each marketing touchpoint on the overall conversion process, and they give you a more balanced view than a single-touch model. However, they aren't great at highlighting the most effective strategies.
5. Time decay attribution model
Time decay marketing attribution models assign more credit for a conversion to marketing touchpoints that occurred closer in time to the buyer's interaction with the brand's online store. The closer to conversion a touch point was, the more credit it gets. Time decay models highlight the impact to mid-bottom of the funnel touchpoints, so they're a good choice if you have a product with longer sales cycles.
6. U-shaped or position-based attribution model
U-shaped marketing attribution models (also known as position-based models) assign more credit for a conversion to marketing touchpoints that occurred early in the buyer's journey and marketing touchpoints that occurred near the end of the buyer's journey.
U-shaped marketing attribution models can be especially effective for businesses that have complex marketing funnels with multiple marketing touchpoints. Credit is assigned across the buyer journey, with an emphasis on the first and last interactions.
7. Custom attribution
Custom marketing attribution models are marketing attribution models that are built according to the specific needs and marketing funnel of a particular business. Custom marketing attribution models can be based on any combination of marketing touchpoints, and they may assign varying amounts of credit to different marketing channels, strategies, or tactics.
Unlike other types of marketing attribution models, custom marketing attribution models allow businesses to create marketing attribution models that are tailored specifically to their marketing funnel, marketing objectives, and conversion goals. This can make them a valuable tool for marketers who want to gain a deeper understanding of how marketing channels, strategies, and tactics are influencing conversions.
8. Algorithm
Algorithm-based or data-driven marketing attribution models use complex algorithms to assign credit for conversions to different marketing channels, strategies, or tactics. Unlike other types of marketing attribution models, these models often use advanced machine learning techniques to continuously learn and adapt over time as marketing campaigns evolve.
Algorithm-based marketing attribution models are useful for businesses that have a large number of marketing channels, strategies, and tactics. They are the most accurate way to identify the marketing touchpoints that are most likely to lead to conversions. However, the complexity means they're difficult and costly to set up. Additionally, marketing attribution models may not always provide an accurate picture of marketing performance if they do not take into account all relevant marketing data, such as marketing touchpoint interactions and customer interactions outside of marketing channels.
How to choose an attribution model
The right model for you ultimately depends on your marketing goals, plus the complexity and type of sales funnel you have. For businesses that have a straightforward marketing funnel with a limited number of marketing touchpoints, traditional single-touch or simple multi-touch attribution models may be sufficient for measuring marketing performance and optimizing marketing spend over time. Test out different models, then choose the model that best reflects the kind of sales funnel you have.
If you have a more complex marketing funnel with many marketing touchpoints and marketing channels (and a bigger budget!), then you may want to consider using an algorithm-based marketing attribution model.
Make your strategy even more effective by introducing SMS marketing
Now that you understand marketing attribution models and have chosen one for your business, it's time to start analyzing your marketing efforts. Once you have a good idea of which channels and ads are driving the best results, you can replicate them across the board to improve the efficiency of your advertising and drive more conversions.
If you're looking to boost conversions even more, a fantastic tactic is SMS marketing. Text marketing allows you to reach out to people who have interacted with your brand and signed up to share their contact information with you. By using personalization and behavior-based flows, you can engage with people who are interested in your business and encourage them to convert.
Emotive is an SMS platform designed for ecommerce brands who want to scale. Sign up for a demo today.