Marketing Attribution: From Prehistory to Conversion
Product Information Management
Wouldn’t it be ideal to be able to look directly into the customer’s mind to understand exactly what made them buy – was it the Google ad, the Facebook post, the TV advert or the billboard? With today’s multitude of advertising options, researching the causes seems challenging. This is exactly where marketing attribution comes in: It helps to measure the impact of individual touchpoints. In this article, we explain what exactly is behind it.
What is Marketing Attribution?
The term ‘attribution’ comes from psychology. It refers to a process for identifying the cause or source of an action or behaviour. In marketing, attribution refers to a process of analysing the entire customer journey using special analysis tools (e.g. Google Analytics, Econda or eTracker). Marketing attribution is used to analyse which touchpoints the customer had with the product before the purchase and in which order these led to a conversion. The aim is to find out which marketing measures are most successful and what contribution they make to achieving the company’s goals. This allows future marketing budgets to be utilised in a more targeted and efficient manner.
Marketing Attribution: The Journey is the Destination
‘Fifty per cent of advertising is always thrown out. You just don’t know which half.’ Would Henry Ford still say that today if he knew about marketing attribution? However, one of his statements remains timelessly relevant: ‘If you don’t advertise, you die!’. You can’t do without advertising today, even if you’re an old hand. You have to stay in the conversation, despite or even because of competitors and changes (communication channels, technologies, etc.).
But nothing is more annoying if the budget used fails to achieve its intended effect. It is therefore all the more important to allocate marketing costs sensibly. After all, the aim of all these endeavours is to avoid wastage. The means to this end is marketing attribution. After all, the goal of all goals is not to acquire a new customer. Today, it is much more about understanding which touchpoints played which role in the customer journey in order to maximise the benefits of marketing measures. There are various marketing attribution models for analysing people’s behaviour and the reasons behind their purchasing decisions.
Marketing Attribution Model
A customer rarely decides to make a purchase after just a single contact with a company or brand. Instead, several touchpoints are usually involved. In this case, it is interesting to find out which touchpoints in which interaction have led to the conversion (e.g. purchase, registration, etc.). Attribution models are used to get to the bottom of these questions by assigning values to the touchpoints and thus obtaining a picture of reality. Ideally, even sales shares can be allocated. In this context, a fundamental distinction is made between two different methods that form the basis for attribution models: Data-driven and rule-based marketing attribution.
Marketing Attribution Methods
Marketing attribution is about the weighting of touchpoints. There are basically two methods available for this, which form the basis for the actual attribution models: The data-driven and the rule-based attribution method.
Data-driven Attribution Method
Data-driven attribution is based on a detailed analysis of the company’s actual data. Algorithms and machine learning are used to individually assess all touchpoints and their influence on conversion. This method uses historical data to calculate the specific contribution of each touchpoint and dynamically adapts to customer behaviour. Due to its flexibility, this method is also known as dynamic attribution.
- Advantages: Data-driven attribution offers the most accurate and flexible evaluation of touchpoints as it is based on real data. It can recognise patterns and correlations that rule-based models overlook and enables the precise allocation of budgets.
- Disadvantages: Implementation is more complex and costly, as it requires advanced analyses and often the support of data scientists. In addition, high data volumes and robust data quality are required.
Rule-based Attribution Method
Rule-based attribution follows self-defined, fixed rules to distribute the value of a conversion to the various touchpoints in the customer journey. These rules, set by the advertiser, are clearly defined in the attribution models, such as the first touch or last touch model. The value is therefore distributed independently of the company’s specific data or the actual performance of the touchpoints.
- Advantages: Rule-based attribution is easy to implement and offers a clear, comprehensible structure. It is well suited for companies that need a basic view of their touchpoints.
- Disadvantages: The approach is subjective and static and does not take into account the actual interaction or the specific effect of the individual touchpoints. They are therefore less flexible and can lead to inaccurate results.
Marketing Attribution Models at a glance
As described above, the marketing attribution models depend on the previously selected method: Data-Driven or Rule-Based Attribution. While there is only ‘one’ model for data-driven attribution, data-driven, rule-based attribution can be divided into the models last touch, first touch, linear, time decay, position-based and custom. These can in turn be divided into two groups: Single Source Attribution and Fractional Attribution. In the former, which is also the most commonly used form of marketing attribution in practice, 100% of the conversion is attributed to a single measure. With fractional attribution, on the other hand, the conversion is attributed to several touchpoints.
Data-driven Marketing Attribution
- Data-driven: Dynamic, self-learning model based on data that determines the weighting of the individual touchpoints according to a mathematical algorithm and includes both successful and unsuccessful interactions (e.g. Google Ads or Google Analytics)
Rule-based Marketing Attribution
Single Source Attribution (one touchpoint receives 100%)
- Last Touch (also Last Click or Last Cookie Wins): As the name suggests, the conversion is assigned completely or 100% to the last touchpoint (common in conversion campaigns where the focus is on completing the purchase)
- First Touch (also First Click or First Touch Wins): As the name suggests, the conversion is assigned completely or 100% to the first touchpoint, even if further touchpoints should follow (common in branding or awareness campaigns, especially when brands are new and not yet known)
Fractional Attribution (multiple touchpoints)
- Linear: The conversion is allocated equally to all touchpoints, e.g. with 4 channels 25% per channel (common for brand building and long journeys)
- Time Decay:The conversion depends on time and the touchpoint that was closest in time is assigned the highest value or the value is chronological (common in campaigns with short sales cycles)
- Position-based (also known as bathtub or U-shaped attribution): 40% of the conversion depends on the first and last interaction and the remaining 20% is evenly distributed among the rest (common in campaigns that focus on attention and closing sales)
- Custom: The advertiser determines the conversion according to individual criteria and decides for himself which touchpoints are the most suitable
Summary: Marketing Attribution
Choosing the right attribution model is crucial for the effective analysis of the customer journey and the optimisation of marketing measures. Each model has its strengths and weaknesses and the decision should be based on the specific goals and needs of your company. Well-founded attribution not only helps you to increase the efficiency of your advertising measures, but also to gain valuable insights into the behaviour of your customers and to improve your marketing strategy in a targeted manner.
Through the targeted use of attribution models, you can manage your marketing expenditure sensibly, minimise wastage and build a stronger bond with your customers. Use the findings of marketing attribution to make the success of your campaigns measurable and to sustainably optimise the customer journey!
And make sure you convey the right, customised, channel-specific product information at every relevant touchpoint. Our OMN software suite, which includes a PIM and DAM, will help you with this so that you can concentrate fully on marketing attribution!
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