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Types of Attribution Modeling & Which One Is Right For You?

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12th Aug, 2020
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Types of Attribution Modeling & Which One Is Right For You?

When a visitor first stumbles upon your brand’s official website, they would immediately convert into a lead in a perfect and ideal world. But unfortunately, we don’t live in an ideal world. 

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A visitor hardly ever converts into a lead at the first go! Thanks to the rapid influx of smartphones and the increasing adoption of digital and social media channels, modern consumers are informed, customers. Once they become aware of your brand, they’ll scourge the online world to compare and contrast your products/services with other brands and then choose the best-suited solution that closely resonates with their needs. 

In essence, they’ll browse your website, check out a few blog posts and products, and maybe return a few days later and click a retargeting ad. So, as you can see, converting from a visitor to a lead is a long one!

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Once your visitors convert into leads, you need to trace their source to understand your potential leads’ present and future patterns. Now is the time to ask a few crucial questions like:

  • From where did the visitor arrive on your site?
  • Which sources drive most visitors to your website?
  • Which marketing channel gets the credit of converting the visitor into a lead? 
  • Which solutions (products) are getting the maximum attention of potential leads?

All of these questions form the heart of an Attribution Model. 

A customer goes through multiple touchpoints before finally purchasing a product from you. From the starting point of their buyer’s journey (when they are merely a visitor) to the endpoint (when they become customers), each marketing channel has a vital role to play. 

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What is an Attribution Model? 

An attribution model is a framework designed for analyzing different touchpoints (marketing channels) in the customer’s buyer’s journey. It is an analysis tool that evaluates the performance of various marketing channels, highlights how each distributes the value of conversion, and offers credits to the channels that drive maximum transformation. 

There are 6 types of attribution models: First Interaction, Last Interaction, Last Non-Direct Click, Linear, Time-Decay, and Position-Based. 

When you analyze individual attribution models, you get a better sense of the ROI each marketing channel brings. When you compare multiple attribution models, you can understand how two or more marketing channels collaborate to facilitate conversions. When combined, this data allows you to assign a conversion value to each touchpoint in the buyer’s journey.

Now, let’s talk about the six different types of attribution models in detail!

Read: How to do Conversion Rate Optimization?

1. First Interaction Attribution

As the name suggests, the first interaction model places all the credit on the first click or interaction. In this sense, it gives a full 100% credit for the lead conversion to the customer’s first interaction with your brand. So, if a visitor comes to your site via Pinterest, the primary interaction model will give Pinterest full credit for all the sales that follow after that interaction. 

Although the first interaction model is pretty straightforward, it completely ignores the potential impact that any other marketing channel at a later point following the first interaction. The first interaction model is beneficial for businesses with a short buying cycle where the customers mostly convert immediately. 

2. Last Interaction Attribution 

Just as the first interaction model gives total preference to the first click, the last interaction model considers the last click or the last touch to be of prime importance. Essentially, this model gives 100% of the credit to the final interaction that a potential lead had with your business.

For instance, suppose a visitor discovers your site through organic search, and they return a week later after seeing and clicking a Facebook ad. Finally, the same day, they visit your website and make a direct purchase from your brand. Thus, the last interaction model gives all the credit to direct traffic.

Last interaction attribution is both accurate and straightforward as in, while it’s challenging to track the entire journey of a customer, you can always be sure of their last touchpoint. However, the downside of this attribution model ignores everything that occurs before the last click. The previous interaction model is a good fit for companies with a short buying cycle with a few touchpoints. So, tracking only the last touchpoint gives a good idea of the most effective channels.

3. Last Non-Direct Click Attribution

The last non-direct click attribution is a more comprehensive model than the last-click model. While this model assigns 100% of the value to a single interaction, it does not consider any “direct” communications just before the conversion. The last non-direct click model seeks to find answers for two questions – how did visitors become aware of your brand and encouraged them to visit your website directly. Since this model eliminates direct traffic, it lets you assign the right value to the marketing channel/strategy that led to the conversion.

4. Linear Attribution 

In a linear attribution model, the credit for the conversion is equally split between all interactions (touchpoints) between a customer and your brand. Let’s assume, a potential customer finds your brand on Facebook, subscribes to your email list, and also clicks an email link. The next interaction is when they directly visit your website and make a purchase. Here, we find three touchpoints, and each touchpoint is assigned 33% of the credit.

Thus, linear attribution provides a more balanced outlook and analysis of your complete marketing strategy. It does not negate any touchpoint and assigns equal importance to all channels responsible for the conversion. However, due to this reason, it also fails to highlight which marketing channel/strategies are more effective than the others.

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5. Time Decay Attribution

This attribution model is quite similar to the linear attribution model because it distributes the credit across multiple touchpoints. The only difference between the time decay attribution model and linear attribution model is that the former considers “when” a particular touchpoint happened. Hence, it places more emphasis and value on those interactions that occur closer to the time of purchase – the first interaction will get less credit, and the last interaction will get the maximum confidence. 

The time decay attribution model is best for brands that prioritize relationship-building and have lengthy sales cycles. One thing to remember here is that this model minimizes the effect of those marketing techniques that lie at the top-of-the-funnel. 

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6. Position-Based Attribution

The position-based attribution model divides the credit for a sale between a potential customer’s first interaction and the moment they convert to a lead. It assigns 40% of the credit to each of the two touchpoints and allots the remaining 20% among all other interactions that take place in between.

Suppose if a prospect first interacts with your brand via Google search, goes on to browse your Facebook page, and then later registers for your email newsletter. The position-based attribution model then credits the first and third touchpoints, each with 40%, and Facebook gets 20% if the credit. 

The position-based attribution model is the right tool for businesses characterized by multiple touchpoints that occur before lead conversion. It ensures that all touchpoints get at least some percentage of the credit.

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The Bottom Line

Each attribution model has its unique advantages and disadvantages, and hence, there isn’t one perfect attribution model. It largely depends on your goals, how many touchpoints you have in the buyer journey, and what touchpoints you wish to focus on. 

If you wish to explore and become an expert in Digital Marketing, check out MICA and upGrad’s Digital Marketing Certificate Program. Become an expert in social media marketing, content marketing, branding, marketing analysis, and PR.

He is working as Associate Director of Digital Marketing at upGrad. Apart from marketing he is a crazy and courageous traveler. He has traveled from Kashmir to Kanyakumari through his bike(bullet).
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Frequently Asked Questions (FAQs)

1Why is Attribution Modeling important for marketing?

A customer can go through multiple interactions with a brand prior to making a purchase. While knowing which landing page your customer converted on is essential, you cannot ignore the influence of social posts, content, and site pages on a customer's decision to buy. To maximize ROI, you should allocate resources based on all these interactions. But this complex buyer's journey makes your job harder, and it means you need a more refined way to regulate what channels and assets create sales possibilities. This is where Attribution Modeling comes into the picture.

2What is Attribution Modeling?

The set of rules that govern the assigning of credit to several touchpoints in the conversion path is known as Attribution Modeling. It aids marketers in analyzing the trends that influence a buyer's thought process through the course to purchase. Multi-channel attribution modeling is complex but essential, as without it, understanding what marketing activities result in increased ROI and better results is difficult.

3What is Last Interaction Attribution Modeling?

Google Analytics has seven different standard attribution models that you can apply using the model comparison tool. The attribution models allow you to control how credit is given to your other marketing touchpoints based on conversions taking place on your website.

Among the standard attribution models is the last interaction model. As the name suggests, this model gives all of the credit to the final touchpoint leading to a conversion. This is the model that will be applied when you see gold conversions and transactions inside all of the standard reports.

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