What is an attribution model?
Simply put, ‘attribution model’ is a term that refers to any system designed to assign a specific value to a marketing or sales touchpoint or goal in the buying process. These systems come in two basic forms: linear and weighted.
A linear attribution model assigns an equal and consistent value to all active touchpoints and goals. A weighted one, on the other hand, as the name suggests, assigns each touchpoint and goal a more or less value depending on the impact it has on the buying process.
For instance, a weighted system might assign a much higher value to the ‘customer completes checkout process’ goal than the ‘customer clicks on social media ad’ goal. In contrast, a linear one would assign the exact same value to both.
Both models, however, are designed to do the exact same thing: give you a clear picture of how the different customer touchpoints in your business are performing so you know which ones to double down on and which ones to work on.
If you wish to learn more about this topic, check out the FAQ section below:
Question #1: Why should I bother using an attribution model in my business?
The main reason you should consider using an attribution model in your business is that different customers convert at different stages of the buying process. If you only focus on a single touchpoint, you miss critical data that can help you optimise your sales funnel and boost your conversion rate.
To give you a better idea of how this works in the real world, let us take a look at the following example:
Let’s say you are running a special deal on the latest iPhone and decided to advertise it on social media. Two people, John and Kelly, end up buying a unit each. At first glance, both transactions are exactly the same: they are both purchases of the same phone.
But what if John stumbled upon your website after searching for iPhone deals on Google and immediately made the purchase where Kelly saw your ad, asked questions via your Facebook page, visited your website, and then left to compare your prices with other sellers before coming back to make the purchase? Clearly, the endpoint for both customers was the same, but the journey was completely different.
An attribution model would allow you to keep track of each customer’s journey and figure out exactly how to more effectively guide future customers to whatever final action you want them to take in your sales funnel.
Question #2: What are the different types of attribution models I can use?
As we have seen earlier, there are two main types of attribution models we can use: linear and weighted. But attribution models can be further divided into six core types:
- First Touch – gives value to the first customer touchpoint before converting (anything that happens in between does not matter)
- Last Touch – gives value to the final customer touchpoint before converting (anything that happens before does not matter)
- Linear – as we have seen earlier, it assigns the same value to all touchpoints and goals
- Time Decay – gives value to the touchpoints customers most recently engaged with
- Position-Based – Gives an equal 40% weight to the first and last touchpoints and distributes the remaining 20% equally between the rest
- Data-Driven – assigns values to touchpoints and goals based on their impact on the conversion process
Question #3: What attribution model should I use in my business?
The attribution model you should use in your business would ultimately depend on your business’ unique customer lifecycle, the type of insights you are looking to get, your unique business, marketing, and sales process, and other related variables.