The Top Marketing Attribution Models for Measuring ROI

As a marketer, you know that customers don’t follow a single linear path through the funnel. Customer journeys are complex and distributed across channels, campaigns, and devices over time. To be a successful marketer, you should be able to understand and track these touchpoints. With one-third of marketers from an Oracle survey reporting marketing attribution and ROI as one of their top challenges, marketing attribution models are a crucial part of the marketing toolbox today. 

Marketing attribution models: A guide

What is marketing attribution?

An integrated marketing campaign for your product or service may include PPC, social media, CRM campaigns, SEO, and more. Yet, it can be hard to determine the impact of each of these in the final numbers. With marketing attribution, you can see the exact contribution of a channel to your campaign marketing ROI. 76% of marketers surveyed by Google indicated that they had, or were building, capabilities to use marketing attribution. 

With marketing attribution, you can credit the relevant touchpoints that nudged a prospect along the funnel and measure the effectiveness of your various marketing activities. 

Benefits of marketing attribution modeling

Some of the benefits of attribution modeling include:

• Improved campaign performance: Attribution shows you which campaigns and channels performed best, so you can optimize them further.
• A better understanding of the customer journey: Attribution models show you the customer’s path to conversion and potential roadblocks along the way.
• Increased ROI: Marketing attribution models help you spend your marketing budget more effectively.
• Knowing what to improve: Marketing attribution helps you to identify channels or campaigns that are less effective and need improvement. 

What are attribution models in marketing?

Attribution models are ways of assigning value to specific touchpoints in marketing campaigns. They help you understand which channels and tactics are most effective in driving desired outcomes. 

Marketing attribution can evaluate marketing channels, campaigns, and even individual pieces of content. There are many different attribution models, each with its advantages and disadvantages, so you should select the right one for your needs.

Types of marketing attribution models

Marketing attribution models are of two kinds:

• Single-touch attribution models consider only one touchpoint in the customer journey.
• Multi-touch attribution models can take many touchpoints into account. These models allow for more advanced marketing attribution.

Let us consider the different types of models under both categories. 

Five types of single-touch attribution models:

1. First-touch attribution assigns 100% of the credit to a prospect’s first interaction with your brand. For example, if their path is: Google search ad –> Facebook retargeting ad–> purchase, the first-click attribution model would credit the conversion to the Google search ad.
2. Last-touch attribution assigns all the credit to the prospect’s last interaction with your brand. In the previous example, the last-click attribution model would credit the conversion to Facebook.
3. Lead-creation attribution assigns the credit to the first touchpoint that created the lead. If a prospect fills out a form on your website, returns organically a week later, and converts, this model would credit the conversion to the website form.
4. Last non-direct click attribution assigns the credit to the last touchpoint that is not a direct click. If a prospect finds you organically on Google, clicks through to your website, and then makes a purchase, the last non-direct click attribution model would credit your website for the conversion.
5. Last most important touch attribution assigns credit to the touchpoint with the most impact on the conversion. For this, you would assign a weight to each touchpoint as per its perceived importance. Take the case of a prospect who clicks on an email campaign, then on a Facebook ad, and makes a purchase. If you have assigned greater weight to the email campaign, the last most important touch attribution model would attribute the conversion to this.

Five types of multi-touch attribution models:

1. Linear attribution assigns equal credit to each touchpoint in the customer journey. For example, if a prospect sees your Facebook ad, visits your website and researches products, and a month later clicks through from an email and converts, the linear attribution model would credit Facebook, your website, and the email marketing campaign equally.
2. Time decay attribution assigns more credit to recent touchpoints, with the idea that these would have a greater influence on the conversion. In the example quoted above, the time decay attribution model would give more credit to the email campaign than to Facebook and your website.
3. U-shaped attribution assigns more credit to the first and last touchpoints in the customer journey. If a prospect engages with your Instagram ad, researches products on your website, then signs up for your newsletter, and finally buys from your online store, this model would give credit to Instagram and the store. 
4. W-shaped attribution assigns a higher value to the first, middle, and last touchpoints. In the previous example, the W-shaped attribution model would give credit to Instagram, the store, and the website. 
5. Z-shaped attribution credits each touchpoint along the customer journey in a weighted manner. You would assign 90% of the credit across the four most important touchpoints, and 10% to the remaining interactions. Higher weightage would go to the first interaction, the one that generated the lead, the one that created an opportunity, and the point where the conversion occurred. 

Pros and cons of the different marketing attribution models

Many marketers prefer a single-touch attribution model as it is easier to set up. But, if your customer journeys tend to be cross-channel, then single-touch attribution could skew your data. You may lose visibility of channels or campaigns that have influenced the outcome. Each attribution model has its advantages and shortcomings, which are listed below for reference.

Advantages of single-touch attribution models:

• They are simple to set up and understand.
• They identify the most important touchpoint in the customer journey.

Disadvantages of single-touch attribution models:

• They can skew the view of the customer journey since they only consider one touchpoint.
• They can mislead since they often credit the touchpoint that is easiest to track, rather than the one with the most impact.

Advantages of multi-touch attribution models:

• They offer a more accurate view of the customer journey by looking at many touchpoints.
• They can help you understand the role of each interaction in the customer journey.
• They can help identify the most effective touchpoints for driving conversions.

Disadvantages of multi-touch attribution models:

• They can be complex to set up and understand.
• They can be resource-intensive since they need data from many channels.
• They can be less accurate than single-touch attribution models as they often rely on statistical models rather than actual data.

How to select the right attribution model

When it comes to marketing attribution models, there is no one-size-fits-all answer. The best attribution model for your business will depend on your specific goals and needs.

Here are a few factors to consider when selecting an attribution model:

1. Your business goals: What are you hoping to achieve with attribution? For instance, if your goal is to find the most important touchpoint in the customer journey, a single-touch attribution model would suit you. If your goal is to understand the role of each touchpoint in the customer journey or to know which are more effective, a multi-touch attribution model may be better. For example, say you are running an e-commerce business where the typical time gap between multiple interactions is small. You could opt for a multi-touch, time decay attribution model. If your goal is brand awareness, a first-touch attribution model will identify your prospect’s first interaction with your brand. However, if your goal is leads or conversions, a lead-creation attribution model will identify the specific touchpoint that helps convert the prospect. 
2. Your customer journey: If you know that your customers have a simple path to conversion across just one or two touchpoints, then you would prefer a simple single-touch attribution. Multi-touch attribution models would be more effective for complicated customer funnels with many possible touchpoints.
3. Your marketing mix: What channels are you using to reach your customers? A single-touch attribution model would work for a small business with only a couple of channels. If you have many marketing channels, you would prefer a multi-touch model. 
4. Your data: What data do you have available to you? If you have limited data, you may prefer a single-touch attribution model. A multi-touch model may be better if you have access to data from multiple channels.
5. Your resources: How much time and money can you invest in attribution? Marketers with limited resources can opt for single-touch attribution as it is easier to set up and manage.

Answering these questions will help you choose the best attribution model for your business.

Ultimately, the best attribution model is the one that works best for your needs. You can experiment to see which model provides the most insights into your marketing campaigns. Some organizations even create custom attribution models to meet their unique needs. 

How to implement a marketing attribution model

Here are the basic steps in setting up a marketing attribution model:

1. Define your business goals: What are you hoping to achieve with attribution? Clarifying this will tell you what you should track and how. 
2. Select an attribution model: Consider the many attribution models available, and select the one that best aligns with your goals.
3. Set up tracking: Once you’ve selected an attribution model, you have to set up tracking to collect data on your customer’s journey. Here are the steps you can take for this:
   • Identify all the marketing channels you wish to track – email marketing, paid search, social media, etc.
   • List the KPIs you will measure for each channel – clicks, conversions, cost per acquisition, and more.
   • Set up tracking on your website or app using tags or pixels that collect information about user behavior (e.g. Google tag manager, Facebook pixel, etc.)
4. Set up the desired attribution model: Once you have chosen your preferred marketing attribution model, you may need some expert help to set it up. You could set up attribution in Google Analytics (for simple single-touch attribution) or your marketing platforms. If you have multiple channels and data sources, then consider investing in an integrated marketing analytics approach like a data stack. With an integrated analytics solution data stack, you can integrate and analyze all your multi-channel data together.
5. Analyze the data: It is now time to analyze the data collected and generate insights. You could do a simple analysis in Hubspot or other marketing platforms, or use a data visualization tool such as Tableau, Power BI, etc. With a marketing data stack, you can combine the data from your ad platforms, product, CRM, website, and other touchpoints into a central data warehouse and view consolidated reports in your preferred analytics platform. 
6. Adjust your marketing strategy: Tweak your marketing strategy based on the insights gained from your attribution data.

Summing up

Marketing attribution models help you understand the customer journey and identify the touchpoints driving your business objectives. By defining your business goals and selecting the most suitable attribution model, you can collect data from different points along your customer journey and use it to optimize your marketing strategy. A well-thought-through and executed marketing attribution model can help your marketing team realize the maximum ROI from their efforts. 

While single-touch attribution models are simpler to operationalize, multi-touch attribution models will give you a more granular view of your customer journey, including cross-channel insights. If you have multiple marketing channels and data sources, an integrated marketing analytics solution can help you simplify the collection, consolidation, and analysis of all this data.