How Does Marketing Measure Influence and Impact?

For the better half of the last century, marketing lacked the measurability that allowed it to effectively determine the return on investment (ROI). Fortunately, digital marketing today is much more data-driven. Many tools out there are ROI-focused. But when you’re running multiple campaigns in today’s multi-device world, it can be extremely challenging to measure ROI across all channels, devices, and touchpoints.

Digital media has transformed the way businesses market their products and services and how customers arrive at the point of purchase. Now, more than ever, customers need to be found and nurtured across a growing number of established and emerging channels. Companies need to know not only how to find and convert prospective customers but also how to determine their ROI.

But let’s be real. It’s rare that a customer ever goes straight to a website and makes a purchase. In fact, it is extremely rare. In reality, multiple channels and messages were responsible for the final buying decision, including the LinkedIn, Twitter, Twitch, Facebook, or Pinterest ad they initially clicked on or the email they received after they signed up for a product newsletter. In a perfect world, you’d be able to track the entire customer journey from start to finish with every touchpoint accounted for and tallied up.

And, to add a whole new level of complexity to this, the series of touchpoints of customers span multiple channels and devices. As a result, marketers are increasingly challenged to map where customers are coming from, where they’re going, and how they make decisions. The job of marketing was much simpler when calculating the impact of campaigns was limited to television, yellow pages, radio, and print. But as digital platforms proliferate, marketers must find solutions to measure how ads across different channels, mediums, and devices all interact to nurture customers through the sales funnel.

The?Online Marketing Institute ?suggests that it takes "7 to 13 touches to deliver a qualified sales lead." The advent of digital marketing techniques and the various ways to track leads means that it can be difficult for marketers to know which of their efforts — or which combination of efforts — ultimately drove the transaction or sale.

Measuring Touchpoints

So how can marketers know which of these channels is responsible for the final sale or conversion? That’s the real challenge.

With so many touchpoints to consider, operational marketing roles are becoming more and more complex. So how do businesses or marketing departments distinguish between high-performing and low-performing marketing campaigns in a multi-channel environment? Simple: attribution.

Marketing attribution refers to the way in which marketers assess the value or ROI of the channels that connect them to potential customers. An attribution model is a way to assign credit or value for how important each of the marketing activities is to the ultimate conversion. It gives organizations a method to measure the ROI of the entire marketing program and the individual components of the program.

In its simplest form, 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. Attribution assigns revenue credit to customer touchpoints along the path to conversion. It considers all digital channels including, search, social media, display ads, email, referrals, etc.

But just as digital channels have multiplied, so too have attribution models. Here are the most common attribution models and how you can use each to optimize your company’s marketing campaigns while making the most of limited marketing dollars.

Single-Touch Attribution Models

Single-touch attribution models allocate revenue credit to a single point of contact on the customer path. There are both advantages and disadvantages to single-touch attribution. Single-touch attribution models are easy to implement and understand but they fail to consider other touchpoints within the buyer's journey to purchase.

Single source attribution models assign all the credit to one touchpoint, usually the first touch or last touch.

1. First Touch

With first-touch attribution, all credit is assigned to the customer’s first point of contact. You can use this model when you want to distinguish what channels bring in new leads. The disadvantage is that it fails to measure the effectiveness of nurturing campaigns and ignores the value of processes that move customers closer to conversion.

2. Last Touch

Last-touch attribution gives full credit to the last contact point before conversion. It prioritizes the most recent interaction an individual had with your brand over any preceding step that might have contributed to awareness or consideration. But it doesn’t account for any prior interactions, missing out on key insights about other valuable marketing channels.

However, for businesses new to attribution, experimenting with single-touch models can be an important first step in finding a general view of the customer’s path to purchase.

Multi-Touch Attribution Models

Multi-touch attribution is best used when you have a large volume of data coming from many sources. Also, multi-touch attribution models more accurately give credit to the entire range of customer interactions. Because you are recognizing more than one touchpoint, you’re able to identify which channels are underperforming or overperforming within the context of the total media mix. This will give you the insight you need to adjust your strategy and properly allocate your marketing budget.

1. Linear

With a linear attribution model, each touch is treated as equally responsible for the sale and thus would receive a part of the credit. For our example, that would look like the following. The linear attribution model gives equal credit to every touchpoint along the path to conversion. This is best used if you want to look at all the channels that are contributing to a customer journey. Linear Attribution is the right model when your focus is on maintaining engagement over a long sales cycle and each of the touch points is designed to work together as one campaign. However, attributing equal credit to all touchpoints doesn’t enable businesses to optimize marketing investment.

2. Time Decay

This model gives proportionally increasing credit as the lead gets closer to conversion. Time decay is best used when you have a long sales cycle and you want to identify which channels have the greatest impact on moving things along. On the downside, this model overlooks the value of the sources that pulled leads into the funnel in the first place.

3. U-Shaped

This attribution model gives the highest credit (typically 40% each) to the first and last touch and divides the remaining 20% among all touchpoints in between. This model and approach are best used when you want to measure end-to-end performance. However, the inherent flaw is that the first and last touches have more value than mid-funnel touches.

4. W-Shaped

Similar to U-shaped attribution, this model gives a high value to the first touch and last touch (30% each). However, it also assigns an equal value (again 30%) to the touchpoint that coincides with lead creation. It then divides the remaining 10% value among all other touchpoints. Essentially, this model attributes the most credit to three main areas — visit, lead, and opportunity. This model works best in processes with a marketing-to-sales handoff — most commonly used by B2B marketers.

5. Custom

The custom attribution model allows businesses to attribute varying amounts of credit to touchpoints across the purchase path. This model is best for marketers who have been tracking performance metrics and numbers for years. It requires companies to have an in-depth understanding of how different campaign formats have worked in the past. For example, a content marketer could give higher credit to a particular piece of content like a case study, white paper, webinar, or video, if there is significant data or evidence indicating what types of content have driven engagement or results in the past.

Determining the Right Attribution Model

These attribution models allow companies to account for all interactions throughout the sales cycle with the added detail of weighting the touchpoints that created the biggest lift. Even though custom attribution creates the most accurate picture of the customer journey, weighted attribution models are also extremely difficult to implement.

Weighted touchpoint modeling assigns a percentage of the revenue credit for a customer to an array of touchpoints, as defined by the respective multi-touch attribution model chosen by the organization.

Marketing Influence and Impact

The success of each model depends on the company. Successful implementation of multi-touch and weighted multi-touch attribution models will require organization-wide support. That said, whichever touchpoint businesses attribute value to will continually be budgeted for and supported by the business to keep performance high, making upstream channels suffer from a perceived lack of effectiveness. With multi-channel attribution techniques, businesses can show value across all effective channels and result in a balanced budget allocation for each.

Multi-touch attribution programs that integrate a company’s marketing automation and CRM stand to benefit the most by sending attribution data directly into the sales engine. Together, as symbiotic partners, marketing and sales should rely on the same tools to track, monitor, and report on the performance and strategy of their campaigns. Without it, the data collected remains siloed from the rest of the organization, making it much more difficult to apply to future programs, initiatives, and campaigns for optimization.

The marketing technology landscape is maturing but attribution still isn't perfect. However, perfect or not, organizations must invest in these technologies if they want to measure marketing influence and impact.

About the Author

Bray Brockbank is CMO and VP of Strategy for Brandegy, a specialized brand and digital marketing agency for technology companies. Bray has led marketing efforts for a variety of B2B and B2C SaaS startups and tech enterprises. He has also served as a fractional CMO for several SaaS technology companies.