What is an attribution platform?
by DJ Team, on April 9, 2020
In the world of marketing, there are a lot of words and phrases that get thrown around that might sound confusing at first - marketing attribution being one of them.
Simply put, an attribution platform is a software application that helps you attribute value to the different marketing interactions your brand has with customers. It helps you quantify the value of your marketing efforts. In order to fully understand the functionalities of a marketing attribution platform, it helps to go over exactly what marketing attribution is.
Good attribution platforms will allow you to compare many attribution models side by side, while the most advanced attribution platforms will incorporate algorithmic or data-driven attribution models to give your teams the whole story. But we'll dive into the benefits of each marketing attribution model later.
What is Marketing Attribution?
Marketing Attribution refers to the science of understanding which marketing interactions contributed to a purchase, or conversion, and how. There are a variety of attribution models that may help marketers understand the impact of their marketing efforts, such as first or last click attribution, multi touch attribution, data-driven or algorithmic attribution, linear attribution, and many others. The differences between these models all lie in where they distribute the credit of the conversion. But we’ll get into those later.
Think about a buyer's journey: any customer has many touchpoints with your company and each event is meant to set off the customer's next step down the sales funnel. The purpose of marketing attribution is to quantify the influence that each impression or touchpoint has on an individual as they make their buying decision.
Proper attribution enables you to assess the value or ROI of the channel you use to connect your audience with your brand. It also helps you see your marketing funnel in ways you couldn’t before. By evaluating first-touch attribution reports, you can understand what your top-of-funnel marketing channels are.
Inversely, by evaluating last-touch attribution reports, you can come to understand what channels are driving conversions and sit at the bottom of the funnel. In other words, attribution weighs out the segments by which people came to know your product or service.
In the analysis of attribution methods, while there are many others you might be using, there are four very common models that we’ll discuss today. An attribution model is essentially a rule that determines how much credit a certain channel gets for sales and conversions along a buyer's journey. Let's take a brief look at each of them.
In this model, all credit is assigned to the first channel the lead engaged with. In this case, they might have discovered your brand from a social media post a week ago where they clicked through to your website. Then later, they look you up in a search engine and interact with some of your organically ranking content before buying. In this case, social media would get the credit for the conversion in a first-touch attribution model because it was the first touchpoint this customer had with your brand.
Last-touch attribution only gives credit to the very last interaction the customer had with your brand before the final sale. From the example above, because the customer’s last channel they interacted with before buying was organic search, organic search would get the credit for that conversion using Last-Touch Attribution.
With multi-touch attribution, each touchpoint is given some credit for its part in contributing to the final sale. This method accounts for the entire customer journey, meaning it processes multiple touchpoints along the way. But the amount of credit they get varies based on which multi-touch attribution model you’re using. Unlike its counterparts, multi-touch attribution isn't as simple as a one-stop shop. In fact, there are several ways in which this method may be measured.
- Linear: This is the simplest multi-touch attribution model, giving equal weight and revenue to all affected touchpoints.
- Time Decay: This model gives more credit to recent interactions while minimizing the impact of earlier touchpoints.
- U-Shaped: This model gives two pivotal points: the first and last interactions,the most credit, with 40% of the credit going to each touchpoint. The remaining 20% is dispersed to the interactions in the middle.
- W-Shaped: This model is similar to the "U", but with an extra source of credit in the middle. The beginning, middle, and end each get 30%, while the remaining middle touchpoints share 10%.
- Full Path: This model builds upon the "W", giving more weight to the major milestones of the customer's journey and less weight to the middle touchpoints. It accounts for the sales team's post-opportunity follow-ups.
- Custom: Of course, you can always design your own attribution model, given the metrics your company wants to measure.
- Algorithmic or Data-Driven Attribution: This attribution method uses more complex data science and statistical modeling to understand how interactions on one channel influence the likelihood to convert through another, and therefore gives a more holistic view of the influence of each channel on the buyer journey.
Learn more about DemandJump’s data-driven attribution model with a free demo.
The best attribution tools will show you a combination of all of these attribution models. In order to fully understand what’s going on with your marketing budget and how users are discovering your brand and moving down the funnel, it’s important to compare these attribution models side by side. Each one tells you something different about the customer journey. Therefore, when evaluating marketing attribution platforms, ask yourself, how do these sets of attribution help me make better decisions? Are they giving me the full picture of my cross-channel marketing campaigns? If not, they’re probably not worth the investment.
The world of marketing attribution isn't as difficult to understand as it may seem on the surface. When you have the right tools, everything falls into place.
If you’d like to get a better picture of your marketing spend by comparing multiple attribution models side by side and leveraging algorithmic attribution to give you the whole story, reach out! We’ll be happy to chat.