The Online Attribution Guide: What Marketers Should Know
Imagine a company selling their product online using several marketing channels, i.e. Google Ads, Meta Ads, email marketing, influencer marketing, and SEO.
When they get, let’s say 5 sales, how do they know which channel drove the sales?
At a glimpse, the marketing channel report may look like this:
Google Ad dashboard shows 4 sales
Meta Ad dashboard shows 3 sales
There are 3 sales made using coupon code from influencer
Does this mean email marketing and SEO don’t work? Not necessarily.
Why the channels report 10 sales when we actually only have 5 sales?
Because those channels only report from their own perspective. They claim whatever conversion they touch to be theirs.
And this is why online attribution is important. It helps us understand how our marketing effort drive conversions and impact our bottom line. It acts as referee to tell you how each channel contribute to the business.
What is Attribution?
Attribution in performance marketing is all about identifying which marketing touchpoints contributed to a conversion. Whether it's an ad click, an email open, a social media interaction, or a website visit, attribution helps you see the bigger picture of your customer's journey.
Why Do We Need Attribution?
Attribution is crucial for several reasons:
Clarifies Effectiveness: It helps you understand which channels and campaigns are driving conversions. Without attribution, you're essentially flying blind, making it difficult to allocate your marketing budget effectively.
Optimizes Budget Allocation: Knowing which touchpoints contribute the most to your goals allows you to focus resources on high-performing channels, ensuring you get the best bang for your buck.
Enhances ROI: With clear data on what works, you can make data-driven decisions that improve your return on investment, refining your strategies for better outcomes.
How Does Attribution Work?
Attribution works by tracking user interactions across multiple touchpoints—such as ads, emails, social media, and website visits—and assigning credit to each based on their role in the conversion process. This involves using tracking pixels, UTM parameters, and integrated data from various platforms. By doing so, you can create a detailed map of how customers interact with your brand before making a purchase.
Types of Attribution Models
1. Single-Touch Attribution
First-Touch: Attributes 100% credit to the first interaction. It is simple but ignores subsequent interactions that may be crucial. It’s like giving full credit to the person who opened the door without acknowledging those who helped along the way.
Last-Touch: Attributes 100% credit to the last interaction. Focuses on the final push but ignores initial efforts that may have sparked interest. It’s akin to praising only the closing act of a show, disregarding the buildup.
2. Multi-Touch Attribution
Linear: Distributes equal credit across all touchpoints. Fair distribution but lacks differentiation in touchpoint value. Think of it as splitting a pie equally, even if some pieces deserve more than others.
Time Decay: More credit to recent touchpoints. Reflects recency effects but can undervalue earlier interactions. It’s like giving more praise to the final sprint in a marathon without acknowledging the initial effort.
Position-Based: 40% credit to the first and last interactions, and 20% to the middle. This model balances the importance of initiating and closing interactions. Imagine giving significant credit to the first and last leg of a relay race while still recognizing the crucial middle stretches.
3. Custom Models
Tailored to specific business needs, using advanced algorithms and machine learning to weigh touchpoints uniquely. These models adapt to the nuances of your customer journeys and provide the most accurate insights.
Trends in Attribution
AI and Machine Learning: These technologies are transforming attribution by automating the process and providing deeper insights. They can identify patterns and predict future behavior, making your attribution models more sophisticated and reliable.
Cross-Device Tracking: As consumers use multiple devices, tracking their journey across these devices is becoming essential. Improved technologies now allow for a more comprehensive view of how customers interact with your brand, no matter the device.
Incrementality Testing: This involves isolating and measuring the true incremental impact of your marketing efforts. By understanding what happens when certain campaigns or channels are added or removed, you can optimize more effectively.
The Impact of Cookieless Future
The transition to a cookieless future, driven by privacy regulations and browser changes, challenges traditional tracking methods. This shift necessitates new strategies for accurate attribution without relying on third-party cookies.
What Advertisers Should Do
Leverage First-Party Data: Collect and use data directly from customer interactions to build a robust attribution system. This can include information from your website, CRM, and other owned channels.
Adopt Cookieless Tracking Solutions: Implement server-side tracking, user logins, and privacy-compliant methods. Server-side tracking, for instance, can help maintain data accuracy without relying on third-party cookies.
Invest in Advanced Attribution Tools: Choose tools that can adapt to a cookieless environment, such as Attribution App, Rockerbox, or Hyros. These tools are designed to work with first-party data and provide detailed insights even in a cookieless landscape.
Future of Attribution
As privacy concerns grow and technology evolves, marketers must adapt by:
Embracing Advanced Models: Utilizing AI and machine learning for more sophisticated attribution. These technologies can help you stay ahead of the curve and make sense of complex customer journeys.
Focusing on First-Party Data: Building strategies around data collected directly from customers. This not only helps with attribution but also enhances customer relationships and trust.
Staying Compliant: Ensuring all methods comply with privacy regulations. Keeping up with the latest laws and guidelines is crucial to maintaining customer trust and avoiding legal issues.
Attribution in performance marketing is essential for understanding and optimizing the customer journey. By adopting advanced models and tools, and preparing for a cookieless future, marketers can continue to make informed decisions and achieve better outcomes. As the landscape continues to evolve, staying agile and informed will be key to success.
By understanding and implementing effective attribution strategies, you can not only optimize your marketing efforts but also gain deeper insights into your customers' behavior, ultimately driving better results for your business.
