Mastering Marketing ROI

If you're a marketer, you always use the right marketing levers/channels and marketing creative to achieve the best ROI.

Last night, this small but mighty group of Georgetown University School of Continuing Studies students used A/B split testing, their gut, and data science to determine the best media distribution spend in a simulation model that closely mirrors reality.

If you need a refresher, here are the six most common attribution models:

1. First-Touch Attribution Model:Attributes 100% of the credit to the first interaction introducing a customer to the brand.Limitations: Offers limited optimization ability as it ignores subsequent interactions that lead to conversions
2. Last-Touch Attribution Model:Approach: Attributes 100% of the credit to the last interaction before the conversion.Limitations: Ignores influences on the path to conversion, providing no visibility into earlier touchpoints contributing to the sale.
3. Linear Attribution Model:Approach: Assigns equal credit to every marketing touchpoint throughout the customer journey.Limitations: It does not allow for optimization for specific outcomes, as every touch receives the same credit regardless of its value.
4. Time Decay Attribution Model:Approach: Attributes more credit to touchpoints closer to the conversion, with decreasing credit as you move back in time. Limitations: Underestimation of the first touchpoint; difficulty determining the optimal decay rate; neglect of interactions outside the timeframe; complexity and resource intensiveness; potential oversimplification of the customer journey.
5. U-Shaped (Position-Based) Attribution Model:Gives significant credit to both the first and last interactions, with the remaining credit distributed evenly among intermediate touchpoints. Usually, 40% on the first and last touch. It acknowledges the importance of initial interest and final conversion in the customer journey.Limitations: Equal weighting of first and last touchpoints; neglect of middle touchpoints; favors simplicity over precision; limited customization.
6. Data-Driven or Algorithmic Attribution Model:Analyzes vast datasets to determine the actual impact of each touchpoint based on factors like timing and user behavior.Benefits: Provides insights into the actual influence of each touchpoint, offering a more accurate representation of their impact on conversionsLimitations: Cost-intensive implementation; time-consuming data rollout; complex for smaller and medium-sized companies; potential conflict of interest if a company providing attribution insights also serves as an ad server.

#marketingrefresher #learning #attributionmodels #BestMROI #testing #datascience