Why Attribution Modeling Will Make You a Better Marketer

Which of your marketing assets created the most conversions last month? If you don’t know how well each step of your marketing funnel engages your customers, then gauging if you’re getting optimal returns on your marketing spend can be challenging. With attribution modeling, marketers can track the performance of their assets and spend more money on what actually works. Ready to stop wasting your marketing budget and start seeing better results from your campaigns? Attribution modeling provides critical insight into your marketing funnel to help you understand how your customers reach their ultimate destination.

 

What is attribution modeling?

Attribution modeling is the best tool a marketer has to understand and identify the organic customer journey. Google found that consumers consult an average of 10.4 sources before making a purchasing decision. Therefore, it can be difficult to discern which people or assets should get credit for “wins.” Attribution modeling helps marketers understand which assets are performing best and use that information to refine their marketing activities and get more revenue for each dollar spent on growth.

By providing better insight into your marketing assets’ performance, attribution modeling programs let you optimize your marketing resources to have the biggest impact, increasing your marketing ROI and giving you greater control over your advertising dollar.

 

How does attribution modeling work?

Attribution modeling tracks touchpoints along the conversion path to provide an understanding of how customers engage with your brand before they make a purchase. There are many different ways of assigning attribution, each with a different rationale. As our ability to track customer activities has become more precise, more complex and accurate attribution models have emerged.

Single-touch: The simplest methods of attribution modeling give all the credit to a single touchpoint. Usually, this is the first touch—the customer’s entry point—or the the last touch —the last action they take before converting or making a purchase. While these traditional models have a long history, they fail to take into account the complexity of the buying cycle.

Multi-touch: Attribution modeling systems take a more sophisticated approach to assigning credit throughout the buying cycle. These systems fall into three general categories:

  • Linear attribution models treats the path to conversion as a straight line, with each touchpoint along the way getting equal credit for the final conversion.
  • Time-decay models assume that the more recent a touchpoint is, the more relevant it is to the final action, and thus gives more credit to “fresher” touchpoints.
  • Parabolic models give the most credit to the first and last touchpoints, but don’t ignore engagements in the middle of the cycle—they give a portion of the credit to each touchpoint.

 

How do people decide which attribution model to use?

The best model for your business depends on many factors, including customer behaviors and  marketing and sales flows. For example, if you’re a new player in your industry and building brand awareness is an important objective for your marketing campaigns, then a first-touch attribution model, or one that gives more credit to the top of the funnel, maybe the appropriate model for you. However, if you are trying to measure the effects of a promotional campaign on your marketing funnel, then a time decay model might be a better fit for you. Fortunately, you don’t have to commit to a single method; many attribution modeling platforms allow users to test multiple models before settling on the one that best reflects their customers’ behavior.

 

What are the limitations of attribution modeling?

Attribution modeling isn’t always perfectly accurate; it divides up credit based on a set of assumptions about how users behave, which can be derived from anecdotal evidence or data. Think of attribution like watching a dolphin jumping in the waves — you can guess a lot about its movements underwater by watching where it comes up, but you can’t be sure what’s going on when it’s beneath the surface.

Another shortcoming of attribution modeling is that it only measures online interactions. Relying too heavily on attribution modeling can make it easy to ignore offline touchpoints, such as a customer seeing an ad for your product in a magazine. However, by understanding where these “missing touchpoints” lie within the buying cycle, you can account for them anyway.

 

Is attribution modeling still worth It?

No system is perfect, but attribution modeling gives marketers a more meaningful understanding the buying cycle. It takes the guesswork out of understanding your customers’ purchasing journey, and provides valuable feedback on your campaigns that will help you develop leaner, more cost-effective strategies. Combined with other analytics techniques, attribution modeling gives marketers a more holistic understanding of their marketing campaigns.

 

Should your company be using attribution modeling?

Yes. In order to get the most out of your marketing funnel, it’s important to understand where your strengths and weaknesses lie. By implementing attribution modeling, you can identify where your customers’ digital experiences are weak. With Kaizen, you can optimize your customer flow and improve those weak areas, resulting in a better conversion rate and greater ROI for your marketing materials.

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