With so many different avenues to market a business, it can be hard to zero in on your ideal customers.
Even if you discover your ideal customers, knowing the perfect time to target them doesn’t come easy. Fortunately, marketing attribution can help solve these problems.
What Is Marketing Attribution?
Marketing attribution is a process of identifying the set of customer actions that led to the final purchase. These actions, also known as touchpoints, include every instance in which the customer had contact with your brand.
The process helps determine which strategies have worked best for your business in the past. The goal is to know which messages and channels had the most significant effect on customers’ actions.
Tracking final sales is pretty straightforward. But do you think your customer goes straight to your website and buys a particular product right away? This almost never happens.
A set of messages and channels plays a role in their final purchase decision. This would include every part of your sales funnel, from the email they clicked on initially to the product ad they viewed on Instagram.
Most customers don’t share details of their experience with you directly. However, marketing attribution models help you determine which touchpoints had the greatest impact on the buying decision of customers or encouraged them to take the next step.
Third-party cookies play a key role in tracking customer journeys and collecting relevant data, which brands have utilized for years. Unfortunately, Google’s effort to phase out third-party cookies in 2024 will affect the entire marketing attribution model.
41% of marketers believe that it will become challenging to track the right customer data. Brands heavily relied on cookies to extract valuable information and target customers accordingly. Therefore, cookie elimination will impact marketing campaigns.
While targeting the customers will certainly become challenging and more complex, we cannot rule out the possibility entirely, and there is still light at the end of the tunnel. Google is currently planning for life after third-party cookie elimination by introducing Topics. Although not much has been revealed about the solution yet, Topics would identify five topics showcasing an individual’s interest in the light of their browsing history. Currently, 350 topics are available, which are expected to grow with time.
Common Types of Marketing Attribution Models
Online advertising has changed tremendously over the past few years. Today, marketers have access to a lot more data to track ROI and effectiveness. The internet has also changed the metrics themselves. “Clicks” didn’t mean much thirty years ago, but now they’re one of the most relevant currencies.
Picking the perfect marketing attribution model may take some time. Like most things in business, it’s a process of trial and error. Here are a few of the most common types of marketing attribution models.
Multi-Touch Attribution
The multi-touch attribution model typically looks at all the touchpoints that contributed to a purchase.
Consider customer X saw a product on your website and bought it right away — in a single step. Customer Z, however, went through an entirely different experience before purchasing the product. Z saw your company ad on Instagram, interacted with your brand on your official website, reached out to your customer support on Facebook Messenger, and made a purchase four days later.
Customer Z’s journey involved many steps — touchpoints — before a purchase was made. If you only give importance to the last step, you’ll miss out on other crucial stages that influence your customer’s purchasing decision.
Multi-touch attribution analyzes each touchpoint’s impact on conversion, yielding an evaluation of the importance of each touchpoint.
With the weakening of third-party cookies, the multi-touch attribution model will certainly become less reliable. Third-party cookies play an essential role in monitoring touchpoints. Fewer third-party cookies means less ability to monitor touchpoints.
The multi-touch attribution model suffers the most of any model from the demise of third-party cookies. There’s just no way to keep track of all this invaluable data without third-party cookies.
Lead Attribution
The lead attribution model considers the touchpoint that actually generated the sale. It helps marketers determine which touchpoints help generate leads.
Suppose you run a software company. A user types the name of your software into Google, clicks on the ad, and books a demo right away, converting it into a lead. In that case, Google Ads will be responsible for the conversion.
But because the lead attribution model focuses on a small section of an extensive customer journey, it is not the best example of attribution models.
First Touch Attribution
The first touch attribution model considers the touchpoints that lead a user to your site for the first time. Even if the visitor doesn’t buy a product, follow you on social media handles, or subscribe to your mailing list, simply getting someone to your landing page is enough to earn a touchpoint some credits when using this mode of evaluation.
This model is fairly simple and easy to understand. To purchase from your company, a user has to know that you exist. If customers never come across your company (or products), they’ll never convert.
Consequently, this model emphasizes implementing and refining strategies to make visitors aware of your brand and attract prospects. If you want to utilize this model for your business, you’d need to step up your game in the top-of-the-funnel activities.
Simply put, you’ll increase brand awareness to attract more prospects and generate more leads. As long as you track your customer’s journey, identifying the first touch should be very simple. In fact, you do not need to track the entire customer journey — only the first time the customer came across your brand.
This model helps marketers determine exactly what caught their customer’s attention at the top of the funnel. On the downside, it overemphasizes top-of-funnel activities and doesn’t consider the entire customer journey.
If you’re a relatively new company that needs to invest in brand awareness, the first touch attribution model might be right for you.
Last Touch Attribution
Last touch attribution is the exact opposite of first touch attribution. It gives all the points to the last step that contributed to your buyer’s journey and led them to purchase a product.
If your sole focus is on driving conversions, last-touch attribution is for you. It minimizes the importance of any non-converting touchpoints so that you can focus on the parts of your marketing strategy that get results.
However, note that this model discards other essential factors that affect a customer’s buying decision. For instance, imagine a customer stumbles across your product on Instagram. They browse through your page, follow you, and click through to your website.
Then they check out the price range of your products and sign up for weekly newsletters. In the next few weeks, they revisit your website often but don’t convert. Finally, you send out a newsletter announcing a 50% sale on your products. The customer clicks through the email and converts.
With the last touch attribution model, you’ll give all the credit to the last touch — the sales email you sent. But was that email the primary reason for the conversion?
Had it not been for your Instagram page, your brand’s seamless website, easy navigation, and the product availability, the user wouldn’t have converted. Perhaps they were keeping an eye on your products until you finally released the newsletter. Prioritizing end-of-funnel activities works for companies that often fail to bring prospects across the finish line.
If you think your conversion rates are already pretty high, the last touch model isn’t for you. However, if you have built brand awareness yet struggle to convert prospects, this model may be perfect.
Note that the first-touch and last-touch attribution models may be less effective due to the decline in use of third-party cookies. They won’t be as affected as the multi-touch model, but fewer third-party cookies means lower overall visibility on the factors that went into a purchase decision.
However, because the first and last touch attribution models only considered the first and the last touchpoints that resulted in the sales, the impact will be far less than the multi-touch attribution that utilized all the touchpoints to target a visitor and convince them to make a purchase.
Nonetheless, platforms like Google Privacy Sandbox offer an alternative to third-party cookies by helping brands and advertisers collect real-time consented user data without the need for cookies.
Benefits of Digital Marketing Attribution
Data reveals that 76% of marketers say they currently have or will use marketing attributing. On top of that, another 75% of companies say they use a multi-touch attribution model to measure their marketing performance.
Perhaps this explains why digital marketing attribution is essential and can contribute to business growth. We’ll discuss a few merits of marketing attribution below.
Increase In Customer Conversions
A successful marketing attribution analysis can help you learn the tactics necessary in order to reach the right customer with the right message at the right time.
When you know exactly what is converting visitors, you can tweak your strategies accordingly and increase customer conversions.
Higher ROI
If you know which channels have the most impact on your customer’s buying decision, you’ll be able to optimize your tactics and spending, allocating your budget to maximize your return on investment.
Understanding which touchpoints do the most to achieve the desired outcome is naturally crucial to your business’ success and growth, and attribution models give a deep insight into what tactics drive brand awareness and which channels encourage customers on the path to purchase.
Provides Actionable Insights
Marketing attribution will help you understand where and how to invest your future marketing efforts. This helps you improve your performance across the board by focusing your efforts on the channels, tactics, and touchpoints that are most effective.
Creates Understanding of the Entire Customer Journey
You might have spent thousands of dollars to run enticing ads, but if you don’t know what is working and what isn’t, you’ll fail to grow your business. Marketing attribution can help you to decipher the customer journey and help clarify customer motivations.
Was it an email, an ad, or an organic search that contributed to the sale? Did your customer buy the product right away, or did they travel through various channels before making a decision? Marketing attribution analysis can help you find out.
How to Determine Your Marketing Attribution Strategy
Digital marketing attribution is invaluable, and different models present several ways to determine what touchpoint drove sales. However, the real question is how to determine your marketing attribution strategy. As we look for ways to compensate for the challenges attribution models will face in the near future, we are considering all options. Media mix modeling (MMM), for example, doesn’t function in quite the same way as these attribution models but can analyze your data to help you optimize in similar ways and see some of the same benefits.
By defining clear ideas around the goals of your marketing program, you can help determine which attribution and optimization models will be most effective. There are pros and cons to all marketing models; you need to figure out the one that will yield positive results for your company.
For the time being, one suggestion is to give them all a try and picking the one with the most valuable outcome, though this can naturally be challenging for many brands and agencies. At AUDIENCEX, we can help you figure out the most ideal approach, monitor results, gather insights, and continuously optimize.
As we prepare for the elimination of third-party cookies, the data and insights that can be gained from current attribution models will also remain valuable to leverage in the post-cookie landscape. Furthermore, by working today to gather as much owned, consented data as possible, you will be able to effectively utilize approaches such as media mix modeling more effectively, as these require a great deal of information to work from to effectively produce actionable optimization insights. This zero-party and first-party data also offers a reliable way to assess actual customer information that can help you create more personalized campaigns while protecting your customers’ privacy.
If you’re looking to solve for attribution and optimization in your digital marketing efforts, or insight on how to build out more valuable owned data for your brand or agency, please feel free to reach out and request a consultation with one of our experts. As the digital advertising landscape faces ongoing change and we all prepare for the cookieless future, our teams are constantly working to stay ahead of the curve and simplify marketing, attribution, and optimization for all brands and agencies.