Marketing channel attribution is a critical component in your marketing technology stack.
You’ve launched a brand new shiny campaign, the content and design are awesome, and everyone loves it. you’re looking on the sales graph and it’s exploding, YAY, you feel great — that is until you are being asked by the marketing manager “How much did it cost us? Did it have a positive ROI?”, Now you start to scratch your head. Marketing channel attribution function is to connect your marketing efforts to down-funnel sales data, including revenue. It is crucial to set it up correctly in order to make your marketing strategy effective.
Sadly, according to a survey of 2,628 top U.S. marketers at for-profit companies conducted by Duke University’s Fuqua School of Business along with Deloitte and the American Marketing Association, most firms lack quantitative metrics to demonstrate marketing spending impact. More than 60% of companies either haven’t been able to show the impact of their marketing spent or have a good qualitative sense of the impact, not quantitative.
In this post we will review the attribution capabilities and methods available through Google Analytics. We’ll also discuss how to evaluate which multi-channel attribution model is best for your organization.
So what is marketing channel attribution means?
Marketing channel attribution is simply how you assign credit for sales and revenue to touch points across the customer journey.
What’s a touchpoint? It’s basically every interaction or engagement your customer had with your company. Touch points typically includes data like, Date/time, source, medium, campaign, Landing page, Ad campaign (when applicable), Keyword (when applicable) etc.
Using Google analytics (or any other web analytics software) you can acquire this touchpoint data using several different ways: UTM parameters, native integrations (Adwords, Doubleclick etc.) and also through CRM campaigns uploads.
Channel attribution model
There are two main classes of attribution models: single-touch and multi-touch. Single-touch attribution models apply full credit to a single touch like Last Interaction/Last Click, Last Non-Direct Click, Last AdWords Click Attribution Model, First Interaction/First Click. Multi-touch attribution models enable marketers to apply fractional credit to the touchpoints based on their touchpoint position like Linear Model, Time Decay Model, Position Based or Customized/Personalized Model.
Let’s cover some of the most popular models using the following example:
In this case, the user had 5 interactions before conversion, the first from Organic Search then he came back through Direct, Social Network, Referral and then converted when coming from Paid Search campaign.
1. Last Interaction Model
In this model the full attribution credit is assigned to the last interaction, which in our example is Paid search, meaning, it disregards all other interactions the user had.
2. First Interaction
In this model the full attribution credit is assigned to the first interaction, which in our example is Organic Search, meaning, it disregards all other interactions the user had.
3. Linear model
In this model each interaction is credited equally, which in our example each channel will get 20% (⅕) for the conversion attribution.
4. Time Decay
In this model the last interaction gets most of the credit, however, unlike the last click model, the earlier interactions still play a role. In our example, Paid search would get most of the credit while the other channels would get the remaining credit based on the time between the interaction and the conversion.
Some consider this model the most “realistic” one.
5. Position based
In this model the last and the first interactions gets most of the credit while the rest of the interactions credited equally in the remaining. In our example, Paid search and Organic search would get 40% each and the remaining 20% would be shared equally between Direct, Social Network and Referral. It is possible to customise the amount of credit given to each position.
Choosing the right model is simply determined by what are you trying to measure and what fits your marketing strategy, for example, if you are a new business starting with a lot of paid campaigns in order to grow which will attract a lot of new buyers a first click attribution (with a defined look back window) might be a good option for you, However, if you are an existing business with a lot of returning customers and not investing too much in paid campaigns last click or time decay might be a good fit for you.
There is no right or wrong attribution model but there is right or wrong decision of which one to choose.
