Don't Let Your Marketing Data Play You: A Guide to Attribution Models

Marketers today have a powerful arsenal of measurement tools at their disposal. But with this power comes responsibility – the responsibility to understand the data and avoid misinterpretations that can lead to wasted resources.

This article equips you with the knowledge to navigate the world of marketing attribution and make informed decisions based on accurate data.

Demystifying Attribution: The Foundation

Marketing attribution assigns credit for conversions (sales, leads) to specific touchpoints a customer interacts with on their journey (ads, emails, etc.). By understanding which channels drive the most results, you can optimize your budget allocation.

However, some internal teams, agencies, and even platforms might inflate metrics to paint a rosier picture. To combat this, let's explore seven key attribution concepts and how they can be misused:

1. Multi-Touch Attribution (MTA): A Holistic View

MTA assigns credit across various touchpoints a customer interacts with before converting. Common models include last-touch, first-touch, and decay models.

Why it's valuable: MTA reveals the impact of all contributing channels, providing a comprehensive picture.

Example: A customer clicks a Google ad on Monday, sees a retargeting ad on Wednesday, and converts on Thursday. MTA would credit all three touchpoints.

Watch out for: Cherry-picking models to fit a desired narrative.

Actionable Tip: Prioritize early-touch attribution for brand awareness campaigns and later-touch models for retargeting and branded search. Be cautious of "black box" models, as they can be subjective.

2. Beyond Averages: Unveiling Marginal Efficiency

Marginal efficiency represents the additional revenue generated per marketing dollar spent. It follows a diminishing returns curve, meaning the cost per conversion increases as you spend more.

Why it's valuable: Understanding this helps you determine the optimal cost-per-acquisition (CPA) you're willing to pay for conversions.

Example: Spending $100 on 10 conversions yields a $10 average CPA, but each conversion might have cost slightly more than the previous one.

Watch out for: Focusing solely on average return without considering diminishing returns.

Actionable Tip: Don't be misled by inflated average CPAs. Analyze marginal efficiency to identify the sweet spot between spend and return.

3. Isolating Real Impact: Non-Incremental Conversions

Non-incremental conversions would have happened even without marketing efforts. Identifying these ensures you accurately measure campaign effectiveness and allocate budgets efficiently.

Why it's valuable: Understanding non-incremental conversions prevents you from overvaluing the impact of certain campaigns.

Example: Loyal customers might purchase regardless of marketing efforts. Similarly, strong brand awareness from past campaigns can lead to conversions without additional marketing pushes.

Watch out for: Overcrediting brand search and retargeting campaigns for conversions that would have occurred naturally.Don't Get Gamed by Your Data: A Marketer's Guide to Understanding Attribution