What Is Marketing Attribution? Definition, Models, and More

Posted by Rebecca Hey | Jul 13, 2021

What Is Marketing Attribution?

Marketers use multiple channels (or touchpoints) and messages to convert customers. How conversions are defined varies from business to business, but we can define it as a customer completing a set goal. A click, a sign-up, a sale, or a video view can all be conversion goals.

With so many channels to use, manage and grow, marketers are confronted with waves of information that can be tricky to sort through – let alone gather insights from.

Do you know where your customers first engaged with your company? How did they discover that package they signed up for? Which channels deliver the best results and the highest value to customers? 

To make their marketing spend as effective as possible, marketers need to know which tactics deliver the best results at the lowest cost. Some messages and channels deliver better results than others, and some will become less effective over time.

Marketers need to know which campaigns are bringing in business at any given moment, and this is where the science of marketing attribution comes into play.

Marketing Attribution Definition

The Simple Definition: Marketing attribution can be defined as an analytical methodology to determine how various tactics contribute to conversions.

The Long Definition: Marketing attribution is the analytical process of evaluating marketing tactics used to convert consumers on their path to purchase to establish which channels and messages had the most significant impact.

Several different attribution models can be used to test how and why consumers interact with brand messages.  

The History of Attribution in Marketing 

To understand what attribution means in marketing, we have to look at how marketing has developed over time. In the 1950’s, marketers used a cross-channel approach to a measurement called Marketing Mix Modeling (MMM).

This statistical analysis used multivariate regressions (measures the degree at which more than one independent variable and more than one dependent variable are linearly related) and marketing time series data (e.g.: sales per month, prices over the last few years, market shares per week​) to create sales forecasts and led to the first models of attribution advertising.

While the tool was useful, there were many shortfalls, including: 

  • Speed: Results were only available weeks after the campaign. Ideally, marketers need insights during a campaign so that they can make adjustments in real-time. 
  • Spending: It was difficult to measure brand impact and requirements, which led to overspending.
  • Optimization: MMMs measure at an overall aggregate level, bucketing impressions into large groups, which do not allow marketers to optimize the message and targeting before making recommendations.

The gaps left in the market by MMMs led to the creation of attribution models, which gave marketers the ability to measure in much more granular detail, including the most effective targeting strategies, creativity, time of day, and messages.

Today, several popular marketing attribution models in use, such as lift studies, time decay, and multi-touch attribution, paint a much clearer picture than the MMM.

Why Is Marketing Attribution Important to SaaS Startups?

Marketing attribution can evaluate several datasets across online and offline marketing campaigns. If used effectively, these insights will help you reach the right audience, at the right time, with the right message.

You can use these insights as part of your Customer Relationship Management toolset. Anecdotal evidence and theories can be tested and monitored in real-time.

It’s advantageous to SaaS businesses at launch. Person-level attribution can provide helpful insight into the needs of their customers. Once a company knows what their customers are looking for, they can tailor their marketing messages to highlight the functionality their customers want from a SaaS provider.

attribution models assigning value to interactions

The Benefits of Marketing Attribution

Although advanced attribution models can be time-intensive and expensive to perfect, the benefits outweigh the costs. Some of the benefits include:

Knowing What Is Working (and What Isn’t)

Customers aren’t bound by a single channel, and a single message won’t necessarily convince them to take action, which is why modern marketers use a variety of on- and offline tactics and elements when they launch their campaigns.

If you want to optimize your campaign, you need to know which combination of elements (website, social media, apps, emails, etc.) deployed during the conversion process had the most significant impact on your customer.

This knowledge will help you design a targeted marketing strategy at an optimal cost.

You’ll also be able to identify how your customers move through various channels and mediums, where they drop off or take action, and which elements they skip over entirely. This information will allow you to improve engagement at every point of the buyer journey.

Let’s say you are promoting your referral program online via a form that customers fill to obtain a free whitepaper you’ve advertised on LinkedIn. If you notice that customers are more likely to abandon the form after introducing this link, you may want to change tactics and send the request for referral in an email after the paper has been downloaded.

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Another example of channel attribution analysis could include following the route to conversion. A client that sees your CEO’s post on Linkedin is most likely to visit the blog linked in the post, read a few posts, and then complete a contact request form. A client that sees a blog post on Facebook might like the post but not click through to read more information.

Knowing this, you can put more spend behind Linkedin, change your call to action on Facebook, or both.

Understanding what works (and what doesn’t) means that you are saving time and money.

Scaling up Successful Efforts

Marketers can understand how campaigns are performing and the role they play in customer journeys – as they unfold. Adjustments can be made in real-time.

If a podcast sponsorship delivers higher returns than a social media campaign, you can ramp up your spending on podcasts and lower the social media spend. If campaigns underperform over weekends and holidays but peak on a Monday, you can time your spending so that you generate the bulk of your impressions on Mondays.

Channel attribution will collect and integrate all of the relevant data from different channels so that you can quickly determine what motivates your customers, how they behave, and what they expect from you at various touch-points and across devices.

facebook attribution model screen

Image: Marketing Attribution determines which channels deliver the most value

If you notice that a customer will seek out information on their mobile device during the initial interest phase (e.g, reading reviews or other forms of social proof) but will complete a form, download a white paper, or request a meeting on their desktop, you can change your marketing promotions according to devices to match their user journey.

Knowing how different channels perform and which messages will help you build virality into your communication channels so that your existing assets will keep delivering, even once you’ve reduced spending.

Cutting Budget for Failed Experiments

According to Forrester, 67% of companies have used attribution to assist with future marketing decisions. The attribution process fundamentally gives marketers insight into performance as it unfolds, along with a real insight into drivers of customer behavior.

Attribution modeling provides insight into the cost of acquiring a conversion, including acquisition cost, the cost of delivery, the value of a customer (e.g., whether a customer goes on to make larger purchases or sticks to low-cost sales items), the quality of the leads generated and more.

Because of these insights, it’s easy to shut down experimental channels or messages that aren’t delivering without wasting your budget any further.

You can spend more money on channels that deliver the most significant number of high-value conversions. Over time, this can significantly improve your bottom line and reduce wasted advertising dollars.

6 Marketing Attribution Models

Marketing attribution measures different campaign elements to determine which advertisements or messages were the most effective. You can choose from several marketing attribution models. The process attributes a value to a touchpoint or several touchpoints in the customer journey amounting to 100%.

Last Click Attribution

Last Click (or last-touch attribution) gives credit to the last clicked ad and keyword that the user interacted with as converting the customer into taking action. It doesn’t consider prior interactions.

It’s the most commonly used attribution model and is generally applicable to mass marketing campaigns, e.g., promoting a big online retailer’s annual sale. 100% of the success is attributed to the last click.

Companies using this methodology would spend the bulk of their budget on retargeting or branded search campaigns and very little on brand-building efforts.

First Click Attribution

First Click (or first-touch) attribution views the first touchpoint as the most important in the funnel. All conversion credit is attributed to the first advertisement or keyword that the customer has clicked on.

It is most commonly used during brand-building or awareness campaigns where the aim is to find new audiences.

Linear Attribution

Linear attribution is a complex, multi-touch attribution model that distributes conversion credit across all clicks along the customer journey. If there are ten touchpoints within the path to purchase, each touchpoint is assigned 10% as a value.

It is limited as it doesn’t provide insight into which channel had the most significant impact.

Time Decay Attribution

This model is similar to the last-click methodology but provides some credit to the other interactions along the path to purchase. Clicks are giving a higher weighting the closer they are to the time of conversion.

Position-Based Attribution

The position-based (or U-shaped) model gives equal weighting to both the first and the last click.

In percentage terms, the first and last clicks are given 40% of the credit, and the remaining credit is equally distributed along with the other clicks in the user journey.

Ultimately, this methodology sees the first and last clicks as the most critical interactions.

A variation of the U-shaped model assigns more credit to the first and last touchpoints before conversion while also giving more credit to the mid-funnel touchpoint.

The theory is that customers in the midpoint of the consumer journey can be considered an active lead.

Value is then assigned evenly across the remaining touchpoints.

This model is helpful to understand the touchpoints that deliver and convert leads while also taking into account touchpoints that influence engagement along the way.

Algorithmic Attribution

Custom (or algorithmic) attribution is most commonly used when there are large data sets available. Using machine learning, this model can determine which touchpoints should be given the highest weighing within a customer journey.

How Do You Choose the Right Attribution Model for Your Business?

Choosing the suitable attribution model for your business depends on several factors. Start with your typical sales cycle. How long does it run? Are most of your marketing efforts online or offline?

If you use a mix of offline and online methods, it’s essential to choose an attribution model that can correlate both for accurate insight. You may want to opt for a mix of MMM and multi-touch attribution methodologies to get the complete picture.

You will likely have to use several models in tandem to gain real insight into the effectiveness of your marketing efforts.

A typical SaaS startup would require a Customer Relationship Management System (CMS) to track their customer relationship marketing efforts (and sales), as well as a Marketing Automation Platform (MAP) to track touchpoints.

You may also benefit from marketing attribution software that can be configured to the attribution model of your choice.

Marketing attribution models are essential tools that improve our understanding of who our customers are, how they relate to our brand messages, where they like to interact with us, and how we can reach them with our campaigns.

During your campaign, you can deploy any of the six principal methodologies:

  • Last click attribution
  • First click attribution,
  • Linear attribution
  • Time decay attribution
  • Position-based attribution 
  • Algorithmic attribution

Whichever methodology you choose, marketing attribution models will help you figure out what’s working (and what isn’t), which communication methods to scale up or scale down. They will ultimately cut wasted spend and improve your bottom line.

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