Imagine you hop into your car in the morning, and on your way to work, you glance at a billboard and think nothing of it. Later that morning, a radio ad plays on the office stereo, and you continue your scheduled meetings.
That afternoon, you comb through email clutter as you avoid deep project work, and the same brands fill your social media feeds. That evening, on your way home from the office, you find yourself in a fast food drive-thru, thanking the cashier for your card and receipt.
You ponder to yourself which marketing message was the tipping point in your decision to have burgers and fries for dinner.
Marketers also think about those ponderings when they take on attribution modeling. That is the process of giving credit to or attributing the marketing efforts and messages buyers get exposed to throughout the sales cycle that makes them a customer.
Marketing attribution models help identify areas of opportunity, the highest-performing marketing channels, and how much ROI each strategy produces. It can also help senior leadership define marketing budgets and financial justifications.
However, there are many channels, both online and offline. The most advanced business scenarios need a technological solution that can keep up. That solution is HYROS. Our ad-tracking platform brings a new level of machine learning and AI to attribution, giving business leaders a data-driven position to make decisions.
What Is Attribution Modeling?
Marketing attribution is assigning credit to the touchpoints a customer interacts with before making a purchasing decision. In that vein, marketing attribution modeling is the method of giving credit you use to analyze which touchpoints receive credit.
Different attribution models provide unique insight into how each marketing channel works together to convert a lead into a paying customer. Marketing attribution models help reveal which marketing efforts generate the biggest payoff for your business.
Various models can help discover trends, especially with long-term strategies like SEO, which can take years to bear fruit. These trends can guide marketers to make improvements, changes, or recommendations on campaigns and give executives a framework for distributing resources.
Carefully tracking and analyzing attribution data provides an understanding of how strategies and actions impact bottom-line returns. Likewise, different types of attribution models can show gaps in the buyer’s journey or areas where you can condense the process to make buying more accessible for your customers.
The Types of Attribution Models Explained
When exploring marketing attribution models, it’s essential to consider the various types you can use and how each gives credit to the multiple touchpoints throughout the customer journey. But, while each has its utility, they also have drawbacks.
Single-touch attribution models only give credit to one touchpoint a customer interacts with. In some cases, it’s the last touchpoint; in others, it’s the first. However, you could encounter a last non-direct click attribution, which gives all the credit to a specific interaction.
Multi-touch attribution models consider every touchpoint a customer interacts with throughout the sales cycle. While these models are useful, they can neglect the importance of one or more interactions.
And then, there are cross-channel marketing attribution models. These models assign value to all marketing channels, both online and offline, across paid ads, organic search, PPC, and social media ads. These models are complex and data-driven, which can be challenging to establish.
Let’s take a deeper look into the different types of attribution models you can deploy in your business.
The first-click or first-touch attribution model gives all the credit to the very first interaction, marketing channel, or touchpoint a customer has with your business. The first-click attribution model is a single-touch model, attributing 100% of the credit to this initial instance.
An example of this first click would be if a customer clicks on a Facebook ad or Google ad and later reads a blog post that leads to a sale. In this instance, credit for the sale would go to the initial ad.
First-click attribution models are ideal for short sales cycles. Likewise, this attribution model could be a great way to measure your brand awareness. But be aware this model neglects touchpoints after initial contact!
Last-click or last-touch attribution models are the opposite of first-touch models. They give all the credit to a customer’s last interaction before making a purchase. The last touch attribution model is also easy to use and implement but ignores initial marketing touchpoints before the final conversion event.
A last interaction attribution model is also useful for short buying cycles and clarifies final touchpoints despite muddy customer journeys. But remember, this model doesn’t give credit to initial marketing campaigns, such as display ads, which could skew decision-making away from these methods.
A linear attribution model is a multi-touch attribution method that distributes equal credit amongst all touchpoints a customer interacts with. That means each touchpoint receives the same weight and doesn’t neglect a specific touchpoint in favor of another.
Linear attribution makes it easy to explain the ROI of each marketing strategy. Although, there could be some significant over and under-estimations of the impact of any given marketing channel.
Bear in mind that a linear attribution method can make it challenging to isolate the most impactful touchpoints.
Another multi-touch attribution model is the time decay attribution model. This model also gives credit to all touchpoints throughout the conversion path. However, it considers the time it takes to finally convert a lead into a customer.
To consider that timeframe, a time-decay attribution model spreads credit across multiple touchpoints while giving the most credit to the touchpoints closest to the purchase. Time-decay models are ideal for businesses with long sales cycles and depend on building positive customer relationships.
While a time-decay model can be ideal for longer sales cycles, they are not well-suited for shorter ones. Plus, they could neglect the impact of earlier touchpoints as later interactions take the brunt of the credit.
Position-Based Attribution (U-Shaped and W-Shaped)
Position-based attribution models come in two flavors: U-shaped and W-shaped. They spread credit between various touchpoints in various amounts between the first, middle, and last touchpoints and everything in between.
Let’s explain. A U-shaped attribution model gives the majority of the credit to the first and last interactions a customer has with your brand. Alternatively, a W-shaped attribution model spreads credit equally to the first, mid-funnel, and last touchpoints.
In both cases, the remaining credit amount gets spread equally between the remaining interactions.
A powerful and advanced form of digital marketing analytics is algorithmic attribution modeling, which uses technology like machine learning and AI. These technologies use large data sets to create statistical formulas that distribute credit precisely to each touchpoint.
These algorithmic attributions are data-driven attribution models that can provide next-level ad spend optimization and an accurate view of which channels are driving conversions. Additionally, they can help personalize paid search results and email campaigns.
Advanced algorithmic attribution is the best way to ensure a high ROI on ad campaigns, and HYROS is leading the charge. HYROS’ next-generation ad-tracking brings cutting-edge technology to your marketing attribution from e-commerce to call funnels and more.
Custom Attribution Models
Custom attribution models allow businesses to assign a predetermined amount of credit to each touchpoint throughout the customer’s journey. These are fully customizable amounts that reflect your business goals and operating trends.
While a custom attribution model can also provide an accurate and detailed view of your marketing efforts, it relies on a considerable database of reliable insights. Some custom attribution tools can automate the analysis of these databases, which allows businesses to implement models based on business needs.
How To Choose the Right Attribution Model
As you can see, marketing attribution models come in various types, each with unique pros and cons. That’s why no single attribution model is best, and the right model depends on your business goals and sales cycle.
In some scenarios, evaluating marketing efforts through multiple models can be handy. For example, one model might be ideal for reporting and analysis, while another is better suited for more detailed investigation.
Before choosing which model(s) are right for your business, consider your buying cycle, metrics you evaluate, business goals, and how an attribution model will help you meet expectations.
Closely Monitor Your Attribution Models With HYROS
Attribution models are crucial for understanding which marketing channels and strategies offer the most conversion value. They provide insight into where to deploy marketing dollars and which creative resonates most with customers.
Although there are several types of attribution models, they provide their share of pros and cons. For instance, a business with a shorter buying cycle can benefit from a single-touch attribution model, whereas a longer sales cycle benefits from more advanced models.
When you need advanced technology and a robust attribution model comparison tool with machine learning and artificial intelligence, you need HYROS. Reach out today to see if we would be ideal partners and start maximizing your ad spend ROI!