What is Attribution Modelling?
Before someone purchases a product or service, they are exposed to numerous marketing “touchpoints". These touchpoints cover a wide range of interactions.
Attribution is the science of assigning credit or allocating revenue from a sale to these marketing touchpoints that a customer was exposed to prior to their purchase so the organisation can figure out the best performing channels.
Why use an Attribution Model?
Essentially attribution modelling allows unprecedented optimization of marketing expenditures.
How do the different Attribution Models work?
While there are many different ‘off the shelf’ attribution models, here are six of the most common (source: John Murphy, head of multi-channel at Bloom Worldwide)
Last Click is both the most commonly used model and one of the most inaccurate. The Last Click model assigns 100% of revenue generated to the last customer touch point before a purchase. For example if a customer saw a Facebook ad and bought the product, Facebook would receive the 'benefit' of the ad-spend.
In layman’s terms, First Click attribution is the polar opposite of Last Click, it attributes 100% of revenue to the first consumer touch point. For example, if a customer first comes across your brand by clicking on an organic search listing, and then later spends R100 on your website, organic search is said to have driven R100 of revenue.
Last Non-Direct Click
This model is similar to Last Click, except for cases when the Last Click is a direct visit. In such cases, this model finds the latest click that isn’t a direct visit and attributes 100% of the revenue to that channel instead. The rationale behind this model is the idea that once a visitor comes directly to your website they have already made the decision to buy from you, so the cause of that purchase is not the direct visit itself, but the one that pre-empted that direct visit.
Where the previous models deem that one part of the customer journey is solely responsible for the sale, the Linear model states that every step of the customer journey is equally important and responsible. Therefore every touch point gets credit for an equal portion of the revenue a customer spends. I.e. in a customer journey where the consumer had five interactions with the brand, each interaction will be credited with 20% of the revenue from that customer.
While the familiar path of Awareness > Consideration > Conversion has become more sophisticated in recent years, the fact that there is a journey, which starts with a potential customer finding out about a brand, is undeniable.
The Positional model acknowledges this by saying that the first touch point and the last touch point are worth X% each, and all the other touch points in between have the remaining percentage divided up evenly among them.
In the Time Decay model assumes that the closer (in terms of time) a touch point is to the conversion, the more influence that touch point had on the customer decision.
Then there are advanced attribution systems;
In advanced attribution modeling, relationships between various touchpoints are well understood and modeled accordingly. For example, customers that search for your product online after seeing an ad on broadcast TV will behave much differently than customers that come upon your product after doing blind internet searches for a type of product that they know they need. Understanding these interactions across marketing channels (TV to search) and across devices (tv to a smartphone, tablet, or PC) is the key to any attribution system.
Essentially brands should pick one model as a business rule and work with it consistently to ensure accurate data.
The first rule of fight club...we mean attribution modelling is that you can't allocate more revenue than you earned and the second rule is that you can't give credit for something that happened in the past.