The road to making a sale can involve many factors. It’s almost never as simple as someone seeing your ad and pulling out their wallet. Rather, they might have watched a video advertisement, then seen an image, made a mental note to check out your product, and then clicked on your site a few days later. With so many touchpoints, advertisers need to know which ones have influenced the consumer to take action so they can most efficiently allocate their ad spend. That’s where attribution models come in.
What Is an Attribution Model?
An attribution model gives you insight into the customer’s journey to purchase. The models range from simple to complex, and they each prioritize different aspects of the journey. With attribution models, you can track which touchpoints led to a sale, so you can more effectively allocate your spending and your focus.
Types of Attribution Models You Should Know About
Attribution models generally fall into either single touch or multitouch versions. With single touch, one point is tracked and credited, and with multitouch you can see other important factors that led to the final moment in the sale.
For example, if you have a social media presence on Instagram, you might create a post highlighting a new product you just launched. Your potential customer remembers the Reel, but doesn’t click though. The idea has been planted, however, and she searches for a similar product on Google. Your Google ad comes up, and she clicks through to your website. After browsing for a few seconds, your website serves her a pop-up ad asking if she wants to receive your email newsletter. She signs up, but is distracted, and doesn’t make a purchase. Finally, after getting her first email, she clicks through to make a purchase.
First-Touch Attribution
The single-touch model credits the first trackable touchpoint where someone engages with your brand. In our hypothetical case, your user saw your product on an Instagram story. It’s easy to see the purpose of this type of attribution since it was the first step in gaining customer participation. Unfortunately, it only tracks that first touch so you won’t know what happened afterward that steered the customer to make a purchase.
Last-Touch Attribution
Crediting just the final action before purchase, last-touch attribution is also single touch and easy to comprehend. While it’s nice to know where the customer landed right before actually clicking “buy,” this method doesn’t take into account what the customer viewed or listened to leading up to the sale.
Position-Based Attribution
This multitouch attribution model gives different weights to different touchpoints. The first and last touchpoints each get 40% of the conversion credit, and the middle touchpoints get a combined 20%. The method serves to point out places where the introduction was made and where the action occurred while not ignoring what happened in between.
Linear Attribution
Linear attribution is a multitouch model that gives equal weight to each touchpoint along the marketing funnel. It attempts to give advertisers a more thorough picture of the customer journey by acknowledging each engagement as an equal part of the conversion. That said, not every interaction was necessarily as important as the ones that came before or after, so while holistic in scope, this method could provide an inaccurate assessment.
Time-Decay Attribution
This multitouch method credits recent interactions more heavily than past ones. While marketers should know which lower-funnel stops led up to a sale, the model can unfairly minimize the earlier steps that led to conversion.
Lead-Conversion Touch Attribution
This complex, multitouch system credits the touchpoints that turned a lead into a customer. It combines data collection, touchpoint-scoring based on perceived impact on conversion, weighted attribution for each touchpoint based on the first two factors, ongoing evaluation, adjustments, and optimization.
Custom Attribution
With custom attribution, a marketer can set up their own preferences and priorities for which factors are assigned value and how highly they are weighted. This allows marketers to get more granular with their analysis and look at things like email campaigns, offline marketing, and website analytics. Though it takes more time to set these up, custom attribution models can be the most effective way to understand your specific customer journey so you can make informed campaign decisions.
Learn also about the importance of mobile attribution for ecommerce businesses.
How to Choose the Right Attribution Model
- First-touch attribution: This is helpful for understanding top-of-funnel customers, as it shows which method captured their attention. Use it when focusing on lead forms and demand generation.
- Last-touch attribution: This helps you learn what drove customer action at the end of a conversion, even if they’ve already experienced previous brand exposure. Use this if you’re focused on driving conversions.
- Position-based attribution model: As this gives you a full picture while also attributing different weights to different touchpoints, use this when you want to credit all aspects of the trail while acknowledging that the intermediate stages might carry less weight than the beginning and end.
- Linear attribution: This gives you a broad picture of how your strategy and various channels came into play. Use this when you believe all your touchpoints play a relatively equal role in helping you meet your sales goals.
- Time-decay attribution: This can be helpful if you have a slower sales cycle that takes place over time. Use this when you want to account for all channels but still place more emphasis on recent and bottom-of-funnel interactions.
- Lead-conversion touch attribution: As this gives you a sense of milestones along the customer journey, use this when you want to focus on which channels turn a lead into a customer. It’s best to use the lead-conversion touch attribution model when you want to determine which channels are the best use of your advertising budget.
- Custom attribution: Use this when you have the time and capabilities to design a program specifically tailored for the nuances of your business or brand. It can help you focus on the channels that reap the most rewards and work out the issues with channels that aren’t maximizing your campaign’s potential.
On Taboola’s leading native advertising platform, each marketer can choose the best attribution model to analyze Taboola Ads performance campaigns, and experiment with different solutions to improve their campaign goals. Marketers can also access robust, real-time data and analytics reports to help track campaign performance across the web and improve conversion rate optimization.
The Role of Data in Attribution Models
Data is essential in attribution models. Think of it as breadcrumbs tracing a trail. Each little bit provides information about how a consumer got from start to finish, and it’s up to the advertiser to decide which of those breadcrumbs they want to track.
Impact of Attribution Models on ROI
Attribution models can significantly impact ROI. Choosing the right one for your brand is key to seeing the highest benefits. By using the right attribution model, you can see if your budget is being allocated effectively or if spending has been wastefully sent toward channels or campaigns that don’t serve your goals. Without the right attribution model, it can be harder to know why your customers make the choices they do, which in turn makes it more challenging to know how to steer your advertising dollars. Learn more about how to avoid attribution errors.
Common Challenges and Misconceptions About Attribution Models
Some common challenges involved with attribution models are restrictions in tracking, inability to see the entire customer journey, and difficulty picking the most helpful attribution model for your brand. The more information you can attain about your customer, and the more you know which information is the most valuable to your goals, the better your outcome with an attribution model can be.
Popular misconceptions include:
- All touchpoints are equally important: While there might be cases where this is true, in general each touchpoint carries its own value and some will be more essential to the customer journey than others.
- Last-click attribution is all that matters: While there’s something to be said for that final action before conversion, it ignores everything that came before it and won’t give a full picture to the marketer trying to understand what motivates their consumer.
- Attribution models are always accurate: Single-touch attribution models, for example, don’t account for cross-channel journeys. Without every bit of information, some of it very granular and hard to attain, you can’t know exactly what motivated your consumer to finally click “buy.”
Attribution models offer brands a chance to join their consumer on the path to purchase. Brands would do well to choose which attribution model best serves their needs and is likely to provide the history they need in order to determine future ad spend.
Frequently Asked Questions (FAQs)
What is the main purpose of attribution modeling?
The purpose of attribution modeling is to attain information about a customer’s path to purchase. This lets the marketer know where to spend more or less money, and where to increase, decrease, or alter their advertising efforts.
What is the formula for attribution models?
Each attribution model has its own formula. The formula for each model is based on various factors like first click, last click, or a combination of clicks. The formula you choose will determine the type of outcome you get and the kinds of things you will learn about your consumer.
What is a potential limitation of attribution modeling?
There are some limitations of attribution modeling. For example, factors like economic conditions, competitor strategies or offerings, and cultural or seasonal trends can all impact buyer behavior in ways that might not be viewable. It can also be hard to know which touchpoints are most essential to track for any given brand, and which system is the best way to track them.
