What is Attribution modeling? Why Does it matter?

Understanding the steps a customer takes before converting can be just as valuable as the sale itself. Attribution models are used to assign credit to touch-points in the customer journey.

For example, if a consumer bought an item after clicking on a display ad, it’s easy enough to credit that entire sale to that one display ad. But what if a consumer took a more complicated route to purchase? They might have initially clicked on the company’s display ad, then clicked on a social ad a week later, downloaded the app, then visited the website from an organic search listing and and converted in-store using a coupon in the mobile app. These days, that’s a relatively simple path to conversion.

Attribution aims to help marketers get a better picture of when and how various marketing channels play contribute to conversion events. That information can then be used to inform future budget allocations.

Attribution models

Following are several of the most common attribution models.

  • Last-click attribution. With this model, all the credit goes to the customer’s last touchpoint before converting. This one-touch model doesn’t take into consideration any other engagements the user may with the company’s marketing efforts leading up to that last engagement.
  • First-click attribution. The other one-touch model, first-click attribution, gives 100 percent of the credit to the first action the customer took on their conversion journey. It ignores any subsequent engagements the customer may have had with other marketing efforts before converting.
  • Linear attribution. This multi-touch attribution model gives equal credit to each touchpoint along the user’s path.
  • Time decay attribution. This model gives the touchpoints that occured closer to the time of the conversion more credit than touchpoints further back in time. The closer in time to the event, the more credit a touchpoint receives.
  • U-shaped attribution. The first and last engagement get the most credit and the rest is assigned equally to the touchpoints that occured in between. In Google Analytics, the first and last engagements are each given 40 percent of the credit and the other 20 percent is distributed equally across the middle interactions.

Algorithmic, or data-driven attribution. When attribution is handled algorithmically, there is no pre-determined set of rules for assigning credits as there is with each of the models listed above. It uses machine learning to analyze each touchpoint and create an attribution model based on that data. Vendors don’t typically share what their algorithms take into consideration when modeling and weighting touch-points, which means the results can vary by provider. Google’s data-driven attribution is just one example of algorithmic attribution modeling.

Custom attribution. As the name suggests, with a custom option, you can create your own attribution model that uses your own set of rules for assigning credit to touch-points on the conversion path.

So, there you have it. Confused? Unsure of what model to apply to your digital marketing investments? You’re not alone. Let’s chat.