Choosing the best Attribution Model for your eCommerce Business

You're interacting with clients across various platforms, and now you must track and uncover the effectiveness of these interactions. However, with numerous touchpoints in the customer journey, comprehending the genuine significance of each channel and its collective impact can be challenging.

Imagine trying to figure out exactly where a sale or conversion came from – it's not always easy. That's where a marketing attribution model steps in to help. There are different ways to attribute the success of a sale to different touchpoints, but the trickiest part is figuring out which method makes the most sense for your specific business.

No worries, diving into the article will provide you with a comprehensive perspective on all these aspects, empowering you to make informed decisions for your marketing strategies. Let's begin and uncover valuable insights together!

What Is Marketing Attribution?

An attribution model is a rule, or set of rules, that determines how credit for sales and conversions is assigned to touchpoints in conversion paths. As a marketer, it can help you better understand the customer journey and answer important questions like:?

• Which channels and campaigns are most effective
• How customers interact with different touchpoints
• Where to allocate resources for maximum impact

I'll outline the idea in this fictional scenario:

A user sees an ad for a t-shirt while scrolling through their TikTok feed. They click the ad, navigate to the website, agree to subscribe to marketing emails in exchange for a discount, and submit their email in the subscription form. Then they continue to browse menu items on the website, but something comes up, and they decide not to purchase that night. A day or two later they get an email that reminds them of the product and includes the discount code. After three days, they turn to Google to search for places to buy a t-shirt. Interestingly, your store's Google ad pops up right at the top of the search results. This time, they revisit the website and successfully place an order, utilizing the discount code.

So what ultimately led the user to make a purchase? Was it the TikTok ad? The email subscription? Browsing the site? The follow-up email with the discount code? Or the Google ad?

A good understanding of attribution models and best practices can help you determine that.?

Exploring Attribution Models

There are a variety of approaches to marketing attribution, each oriented around a different type of analytics model and approach to weighing the various data points that influence customer behavior. At a high level, these models can be broken into two categories:

• Single-source models, which are simpler and focus on identifying just one touchpoint that is most influential in conversion.
• Multi-source models, which are more complex and weigh the relative influence of multiple touchpoints.

Now let’s look at the various attribution methods available within these categories:

Single-Source Attribution Models: Single-source attribution models focus on giving credit to just one specific marketing touchpoint within the buyer's journey.

There are two primary single-source attribution models:

1. First-Touch Models: These assume that a customer's conversion is a result of the initial marketing asset they come across. The entire credit is attributed to this first touchpoint, regardless of any subsequent interactions with other channels.

Pros:

• Valuable for understanding the preferences of new customers, particularly those at the top of the funnel.

Cons:

• Fails to consider any customer interactions following the initial touchpoint.
• This can create a bias against other channels, as successful ones in this model might generate website views but not actual sales.

1. Last-Touch Models: With this approach, full credit is given to the last touchpoint a customer engages with before making a purchase. It disregards any earlier interactions and assumes that the final marketing asset is responsible for the conversion.

Pros:

• Useful for uncovering what prompts customers to take action, even if it's after being influenced by other channels.

Cons:

• Doesn't account for interactions preceding the final touchpoint.
• Offers no insight into how much other channels might have contributed to the final outcome.

Multi-Source Attribution Models: Multi-touch attribution modeling aims to appropriately attribute value to each touchpoint or channel encountered by the buyer. These models are often deemed more accurate as they distribute value across all touchpoints in a customer's journey.

One challenge of attribution modeling is the difficulty in accurately assessing the contribution of each channel. Factors like word-of-mouth and brand equity are hard to quantify, and the decision-making process is psychologically intricate. Even if customers are surveyed about their buying influencers, they might not recall every factor or encounter with messaging.

Despite these challenges, multi-source models strive to piece together the puzzle in various ways. Several types of multi-source attribution models cater to different purposes and levels of complexity:

1. Linear Models: These consider every interaction and evenly distribute credit across all touchpoints, regardless of their chronological order in the customer journey.

Use this model when you want a broad picture of your marketing strategy and a general accounting of all channels.

1. Time Decay Models: Weight is assigned more heavily to interactions occurring later in the buyer's journey, with the most credit given to the final interaction leading to a sale.

Use this model when you are most interested in the channels that drive conversions or work better at the bottom of the sales funnel — and when you want to place less emphasis on the top of the funnel but still want to account for all channels.

1. U-Shaped Models: Here, 40% credit goes to both the first and last interactions. The remaining 20% is divided between the second and penultimate touchpoints or distributed evenly across intermediate touchpoints.

Use this model when you want a balanced approach or when intermediate stages of the decision-making process are more difficult to ascertain, but you still want to consider their influence.

1. W-Shaped Models: Characterized by three spikes like the letter "W," this model allocates 30% credit to three touchpoints: the initial visit, lead conversion, and opportunity creation. The remaining 10% is split equally between the two low intervals.

Use this model when you want a detailed view of all channels along the customer journey. It can help you identify how channels are interrelated and which channels are more effective at different stages.

Get Started With Attribution Modeling Today!

Now that you've got the basics of attribution modeling under your belt, you're ready to take the next step. Choosing the right model can make all the difference in how you divvy up your marketing budgets, elevate your campaigns, and draw in a crowd of potential customers.

With the perfect model in hand, you'll be able to really grasp how various touchpoints impact your customers, and you'll know exactly where to attribute the credit for generating leads and closing sales.

interrelationships at different stages.