Defining how your marketing efforts are measured is a key focus for any marketing team. But how do you decide which of the attribution models you should use? Honestly, the answer is “it depends”.  The right marketing attribution model for your business depends on various factors such as your marketing goals, the complexity of your sales funnel, the nature of your industry, and the available data sources. 

Let’s start with a review of the 5 common marketing attribution models and the business cases best solved by each:

  1. Last-touch attribution: This model gives credit for a conversion to the last touchpoint that a customer interacted with before making a purchase. On the positive side, it is simple to implement and is a good choice if you’re just starting your attribution journey.  The downside is that it only takes into account the very last interaction, regardless of how many touchpoints have contributed to the sale or conversion. Marketers should consider using last-touch attribution when they already have a lot of traffic and leads but need to optimize the last step in the sales funnel. If your business has a long sales cycle, it may be advantageous to use last-touch attribution to identify those high-converting marketing touchpoints so that you can optimize those activities to drive greater conversion.
  2. First-touch attribution: On the other end from last-touch, this model attributes the conversion to the first touchpoint that initiated the customer’s journey. Since you can’t sell your service or product to someone who doesn’t know about you, this model prioritizes the activity that generates the initial customer acquisition. The first-touch attribution model has the advantage of being easy to set up and very straightforward to track but ignores the influence of other touchpoints that may have nurtured or contributed to converting the lead to a purchasing customer. It also does not account for multiple interactions and touchpoints that may occur after the conversion, such as retention, loyalty, or advocacy engagements. 

    First-touch attribution models work well in organizations where offerings are highly transactional and sales cycles are short. In these cases, it is most important to identify the moment that potential customers find you so that you can concentrate more of your marketing budget on initial funnel activities.  
  3. Linear attribution: This model assigns equal weight to each touchpoint throughout the customer journey. It offers a balanced view of all touchpoints but may not reflect the varying impact of different interactions. Put simply, every interaction gets a participation award that can give organizations a clear picture of all of the channels and activities that contribute to a conversion. Many businesses choose this model because it considers the entire customer journey, gives credit to multiple engagements, and provides a comprehensive view of the overall marketing strategy. By taking all touchpoints into account, linear attribution models mean that you will gain complete oversight of your customers’  entire buying journeys. This makes the model perfect for companies who are just starting, or who are adopting a completely new digital marketing strategy. The biggest downside is that this model assumes that each touch is equally influential. By using linear attribution, you risk being able to optimize your marketing efforts for higher conversions based on the most effective channels and content.
  4. Time-decay attribution: In this model, touchpoints closer to the conversion receive more credit because it is assumed that they had a stronger influence,  the diminishing impact of earlier interactions. This model is especially helpful to businesses that have longer sales cycles, as the time between channel interactions will serve to highlight the difference in conversion credit they receive. It demonstrates how tactics build the relationship between the lead and the organization. The drawback to this model is that it diminishes your acquisition and welcome activities because it assumes that the most impactful engagements are the ones closer to conversion, thereby discounting the sustained touchpoints throughout a long lead journey.
  5. Position-based attribution: Also known as the U-shaped model, position-based attribution assigns a higher weight to the first and last touchpoints while distributing the remaining credit among the intermediate touchpoints. This model acknowledges the importance of both acquisition and conversion stages but diminishes the impact of mid-funnel activities. While every touchpoint receives some credit toward conversion, this model becomes less meaningful with longer lead cycles.

Now that we understand the 5 common attribution models we can deploy, how do we choose? Choosing an attribution model involves considering several key factors; here are some steps to help you make an informed decision:

  1. Define your goals: Start your attribution journey by clearly outlining your marketing objectives and deciding what you want to achieve with your attribution model. Do you primarily want to optimize your marketing spend? Understand customer behavior? Or do you want to evaluate the impact of specific channels? Identifying your goals will guide your choice.
  1. Understand your sales funnel: Examine your sales and marketing funnel to identify the touchpoints customers interact with before converting. Take the time to map out the complexity and length of your typical customer journey. This exercise will influence the attribution model that best suits your business.
  1. Analyze available data: It is important to assess the quality and quantity of your data sources. What data do you have access to? Is it full data regarding customer interactions and conversions? Do you have the details you need regarding marketing channel performance? At the same time, consider whether you have the necessary tools and resources to collect, process, and visualize the data for attribution analysis.
  1. Consider your industry: Different industries have different customer behavior and marketing dynamics, so you must understand your industry’s characteristics. Do you typically experience long sales cycles, or are they more transactional? How many touchpoints on average does it take from acquisition to conversion? Do you have high or low customer churn rates? This understanding will help you choose an attribution model that aligns with your industry-specific nuances.
  1. Test and iterate: It is important to consider conducting tests with different attribution models to compare their performance and impact on your marketing insights. A/B testing or using a control group can provide valuable insights into the effectiveness of different models. Once you understand the attribution model that works best for your business, iterate and refine your approach based on the results.
  1. Seek expert advice: Last, but not least, consider consulting with marketing analytics professionals or agencies (like Relationship One!) who are experienced in attribution modeling. This expert advice can provide valuable insights and guidance tailored to your specific business needs and help you make a sound business decision.

To recap, it is important to analyze your specific business needs, and data availability, and consider using an attribution model that combines various approaches to gain a comprehensive understanding of your marketing efforts’ effectiveness. Additionally, you may need a combination of technologies such as a robust marketing automation platform, CRM, CDP, and a data visualization tool like PowerBI to accurately track and measure attribution across your organization. 

Remember that no attribution model is perfect, and the right choice may vary based on your unique circumstances. It is essential to regularly review and adjust your attribution model as your business needs evolve, new data becomes available, or marketing strategies change. Need help wading through the options? Relationship One is here to help.