Marketers have no shortage of options today. There are a wide array of channels that can be effective with the proper investment and execution. Options range from current favorites, like email, search, and social media, to traditional staples, like in-person events, direct mail, and phone calls.
Marketing efforts are largely defined by the channels they choose (and don’t choose) to invest in. Due to budget constraints, the choice often comes down to one channel over another. These decisions are tough and they come with major implications, so it pays to get them right.
Unfortunately, channel decisions aren’t objective by default. It’s natural to have biases for and against certain channels. These biases are fine as long as they are not allowed to impact critical decisions.
We need an unbiased basis of comparison. That’s where the marketing attribution model comes in. Marketing attribution allows you to tie conversions and revenue to the channels that were involved. This provides hard numbers to inform your decisions and justify your reasoning.
There are three basic schools of marketing attribution:
- First Touch Attribution
- Last Touch Attribution
- Multi-Touch Attribution
We’ll explain the models, provide some examples, and talk about the pros and cons of each.
First Touch Attribution:
First touch attribution is the first of the single touchpoint attribution models. It’s exactly what it sounds like: the credit is assigned to the first marketing touchpoint. More specifically, 100% of the deal value is assigned to the channel and/or activity that acquired the contact.
As far as variations, there’s not much room for debate with first touch attribution. The acquisition channel gets the credit. This clarity is actually a strength of first touch. It’s easy to explain and implement. There aren’t any confusing cases that could lead to errors or inconsistencies.
A defining feature of first touch attribution is that it puts emphasis on top-of-funnel efforts. These will be the channels getting the credit and, thus, the channels that get optimized.
Depending on the quality of your lower-funnel processes, this can be a good or a bad approach. This approach favors the channels that turn out the most leads. If you have reasonably consistent lead conversion rates across your channels, it’s an effective way to generate the most leads. If conversion rates differ greatly, you risk missing a channel that is producing fewer higher-converting leads.
Last Touch Attribution:
As you might expect, last touch attribution is the opposite end of the single touchpoint attribution spectrum. In a last touch model, 100% of the value is assigned to the final touchpoint before the opportunity was created.
Say, for example, a contact completed in an inbound form, attended a webinar, and replied to an email campaign where they accepted a sales meeting. In a last touch attribution model, the email campaign would be attributed 100% of the value of the deal closed from the resultant sales call.
A notable benefit of a last touch approach is that it doesn’t require any sort of advanced reporting. Unlike a first touch model and most multi-touch models, which rely on accurately tracing engagement back to a lead’s first activity, last touch only requires that you connect the opportunity with the conversion that immediately preceded it. In businesses with long sales cycles, leads could interact with your brand for months before advancing, let alone being converted to an opportunity.
Last touch attribution comes in several variations. Essentially, most of these variations come down to the last touch other than _____. For example, if your nurture process dictates that you call every lead after a particularly valuable conversion, you might choose to ignore this step for the purposes of attribution (because the call would gain a disproportionate amount of attribution, diluting usable data).
Where first touch attribution emphasizes discovery and puts pressure on conversion, last touch attribution emphasizes conversion and puts pressure on discovery. Marketers who can keep leads flowing in will find that last touch helps them to prioritize productive channels. On the other hand, spotty traffic can steer you in the wrong direction by overemphasizing low-producing, high-converting channels.
Multi-touch attribution is the other major bucket of attribution models. It’s by far the largest and most diverse of the three. As the name suggests, multi-touch attribution is any model that assigns some share of the credit to more than one touchpoint.
There are a nearly limitless number of variations when it comes to multi-touch approaches, based on the number of steps credited and the percentage of credit attributed.
Some models only worry about crediting channels at key phases like the discovery, capture, and opportunity creation. Other models set out to credit each touchpoint from start to finish.
Likewise, the percentage of revenue attributed to each step changes from model to model. Some models spread credit evenly through the funnel, while other models assign larger or smaller shares to certain touchpoints.
Variety is both a strength and weakness of multi-touch models. A multi-touch approach can be finely tuned to closely align to the needs of your business. However, that presumes you know your funnel well and understand how to mirror needs with your attribution model – which certainly isn’t the case for most beginners.
Along the same lines, the more complicated logic of a multi-touch model is more difficult to communicate and execute. Marketing automation helps a great deal in managing a multi-touch attribution model, but it also further raises the bar for entry.
Other characteristics of multi-channel attribution come down to the specific model. Two notable examples of multi-touch attribution models are the time-based multi-touch attribution and the W-shaped attribution model.
A time-based model assigns an ascending or descending percentage of credit based on the proximity of the touchpoint to the opportunity creation. It works a lot like a more balanced version of a last touch or a first touch model.
W-shaped attribution assigns a large portion of the credit to three major points in the conversion process, typically the first touch/discover, the acquisition, and the last touch/opportunity creation. The remaining credit is distributed to activities between these points. The W-shaped model does a good job of assigning credit throughout the funnel, though it can also suffer from a lack of focus.
So, Which Attribution Model is the Best?
No approach is the best in all circumstances. Multi-touch attribution has the power to be the most accurate but relies on a properly chosen model and effective data collection. Unless your company has a particularly complicated marketing mix, a single touchpoint attribution can be just as effective.
A good starting point is to choose either first touch or last touch, depending on whether you’re stronger at converting leads or at driving new traffic, respectively. From there, if you’re unsatisfied with the attribution of the single touchpoint model, use it as a basis to upgrade to multi-touch.
Let us know what you think:
- What type of marketing attribution does your company use?
- Which models do you think are most effective?
- What technologies are important in enabling marketing attribution?