Every sales conversion has a unique story. It all begins with a prospective buyer that goes through a journey. The customer journey involves multiple touchpoints until the ultimate endpoint: conversion.
Identifying these touchpoints is the best way to understand how buyers reach the point of wanting to spend money on a product or service. They will then be used in marketing campaigns and advertising activities to increase conversions further.
In this article, we discuss these touchpoints through multi-touch attribution models.
What is multi-touch attribution?
Multi-touch attribution is a method that measures marketing effectiveness through all touchpoints on the customer journey. Each touchpoint is given a score to determine which one contributed the most to the sale.
It is an improved version of the traditional attribution approaches that credit only the first or last touch as the deciding factor of conversion.
Why is It Important?
People might think it doesn’t matter which marketing touchpoints impacted the buyer the most—the important thing is that a conversion occurred at all. But this data matters because it will be used to improve products, services, marketing strategies, and even the business as a whole.
When you don’t have a holistic picture of the conversion process, there is nothing to base marketing and advertising activities on. You will essentially be flying blind and spending money on tactics that may not work at all.
By scoring every touchpoint in a customer journey, you are eliminating biases in measuring effectiveness across all channels and even devices. This way, businesses can optimize their marketing and advertising budgets by allocating higher amounts to touchpoints that scored high in the attribution.
Let’s take this customer’s journey as an example: Taylor wants a new bag, so she enters a generic search term on Google on her laptop. After browsing a few e-commerce sites, she became overwhelmed with the options and decided to put off her shopping spree.
She clicked away from the online stores and went on with her day. But as she browsed unrelated web pages, she got targeted ads from Coach with previews of their new lineup. Taylor ignores them and clicks away from her browser. She opens up Instagram instead, where she finds a native ad from Coach at the top of her feed.
A few days later, Taylor checks her phone and finds a promotional email from Coach regarding new designs, along with a discount code. Taylor finally decides to buy a bag from the Coach website and uses the discount code she was given.
What were the marketing touchpoints she encountered?
Targeted ad (browser)
Native ad (Instagram)
Each of these touchpoints contributed to Taylor buying a Coach bag. Further data include seeing targeted ads on the browser on her laptop. She eventually purchased the bag using her mobile phone.
What are Attribution Models?
Multi-touch attribution models are measurements of marketing performance where first and last touchpoints are as significant as those in between. They clearly showcase what the complete customer journey looks like.
Attribution models entail assigning credit to all touchpoints so marketers can gauge the influence and efficiency of all marketing channels. The main advantage of doing so is that companies can identify which channel is making the biggest impact on conversions. With this data, it becomes easier to create more robust campaigns to increase sales.
This way, companies can maximize the return on their investment by dedicating resources and focusing marketing efforts on custom models that are proven to work based on data from multi-touch attribution.
There are several types of touch-attribution models with different approaches to assigning credit:
Types of Models
In this model, all credit goes to one marketing touchpoint within a multi-channel marketing campaign. First- and last-touch attribution models are examples of this.
Linear attribution gives the same credit across all touchpoints of the customer journey. Going back to the Taylor example, the targeted ad, native ad, promotional email, and discount code split the credit equally—they each get 25%.
While it’s a better approach than single-touch attribution, this method still makes it difficult to determine the most influential touchpoint.
This model is characterized by the letter U, where the endpoints get large chunks of the credit. The first touchpoint led to brand awareness, and the last touchpoint was the event that resulted in the conversion event.
The U-shaped attribution model gives 40% credit to the first and last conversion touchpoints. The touchpoints in between split the rest of the 20%.
Going back to Taylor’s customer journey, the marketing team can conclude that the targeted ad is an important digital marketing strategy to create awareness. At the same time, the discount code provided the conversion touchpoint.
This method is better than the linear attribution model because it gives marketers more actionable data so they can streamline their strategies.
At what touchpoint did customers interact closer to the conversion event? This is what time-decay attribution aims to determine. It is similar to the last-touch attribution model in that little value is given to the first touchpoint and the few succeeding ones. Touchpoints the customer interacted with closer to the moment of conversion get bigger credits.
While the time-decay attribution model credits multiple touchpoints within a customer’s journey, it does not recognize the importance of top-of-funnel marketing efforts.
The full-path attribution model is a complex design that assigns credit to all touchpoints and adds an additional factor, which is the lead creation touchpoint. To understand the highly technical full-path model, you need to know at what point there was lead creation.
In this model, more credit is given to the lead creation touchpoint, first touch, opportunity creation, and final touchpoint, with 22.5% each. The final 10% is divided between the other touchpoints in a consumer journey.
This attribution strategy is crucial for brands that employ multi-channel marketing strategies to optimize brand awareness and maximize sales conversions.
The model provides primary conversion credit to the first touch, lead creation point, and last touch. Each of those major touchpoints gets 30% credit, while the remaining 10% is shared by the touchpoints in between.
What is the Difference Between Multi-, first-, and Last-Touch Attribution?
First-touch attribution credits the first marketing touchpoint as the reason for the conversion. In the Taylor example, the targeted ad she saw on her browser is the one credited under the first-touch attribution model.
The opposite is the case in the last-touch attribution model, where the final touchpoint is considered the tipping point for the sale. In Taylor’s case, the discount code sent to her email address got her to buy the Coach bag.
The multi-touch attribution model considers all the touchpoints consequential in conversion. It is the most popular method used today because every touchpoint is actually deserving of credit and attention.
How to Choose the Right Model for Your Business
If none of the above-mentioned methods apply to you, you can create your own attribution model. Every business is different, and there are many touchpoints to consider, some unique to each marketing team and the strategies they develop. Creating a custom model allows companies to deliver impactful messaging based on customer data.
Marketing teams know firsthand the true significance of each touchpoint. For example, full-path attribution provides a complete credit system through the customer journey. However, a 22.5% credit may be too much for one touchpoint when five others have to share only 10% credit. It’s up to the marketing team to customize the attribution model as long as it is well-thought-out and considers the importance of each touchpoint.
You can also combine two models to optimize customer data. For example, the first-touch attribution can work well with the time-decay model. You can assign the most credit to the first touch and then use the time-decay principle to give more credit to activities closer to the point of conversion.
With so many models and techniques, how do you choose the right one for your business?
Know your KPIs
Before beginning to measure the effectiveness of your marketing strategies, you first need to identify your key performance indicators (KPIs). These quantifiable metrics provide a target for your company and every department within.
One helpful guideline for determining KPIs is the SMART formula: KPIs should be specific, measurable, attainable, realistic, and time-bound.
KPIs for your sales and marketing departments should cover all facets of sales conversions, such as new leads generated, qualified opportunities, total value, sales volume, and average order value, among many others. Marketing-specific KPIs include leads, conversion rates, and return on marketing or ad spend.
Based on your KPIs, your marketing team can choose the best multi-touch attribution models to boost your marketing messages. A custom model will work well for you because you will decide the metrics in which to assign credit.
How to Implement It for Your Ecommerce
Why is multi-touch attribution important for ecommerce? There are so many digital marketing and ad channels out there: Google paid search, paid ads on social media platforms, Adroll, and more. Additionally, there are an estimated 12 to 24 million ecommerce sites in the world, and more are created every day. As a result, more ad and marketing channels are also launched to meet demand.
With so many online channels, tracking marketing and ad success has become incredibly complex. Using a attribution model will make monitoring simpler.
Here are the steps to implementing your touch attribution model:
1. Create a dedicated team
Armed with their KPIs, your marketing team must first identify the touchpoints that will be assimilated into the model. This team is also responsible for gathering and evaluating data across all marketing and advertising channels. Make sure that only relevant data is included in these models.
2. Use marketing analytics software
Monitoring Google Ads, paid search, and pay-per-click metrics is a complex process, so it’s best to use analytics software to analyze your data using attribution modeling. Automation is crucial when you have to deal with voluminous data.
3. Analyze results
Once your software generates the needed data, you can analyze or measure marketing effectiveness from multiple models. The goal is to optimize your marketing spend and focus your resources on the touchpoints that led to conversions.
4. Continue to evaluate and refine strategies
Companies should regularly assess and recalibrate their marketing campaigns to ensure that they continue to work. New approaches and marketing channels emerge now and then, so it’s essential to keep up with marketing trends in your industry. Marketing teams should continuously test and measure new strategies to improve conversions and ensure long-term success.
Multi-touch attribution models help companies launch successful marketing or advertising campaigns. But not all attribution models will be suitable for your business, so your marketing team must understand the many different approaches and how they can be applied to your operations.
A custom multi-touch attribution model will allow you to enjoy the scientific approach of attribution, but based on your own rules. You need concrete business data to get the best results, which will significantly impact your conversions.
Multi-channel attribution is the process of identifying which part of the customer journey triggered a sales conversion.
Today’s businesses have the advantage (or disadvantage) of having multiple methods or avenues to increase brand awareness and encourage consumers to interact with specific touchpoints before conversion. There are traditional channels like newspaper and broadcast ads, online ads and social media, and search engine optimization and backlinks. With so many options, which way leads to the most conversions?
Multi-channel attribution helps businesses optimize their marketing and advertising budget by focusing on the channels that convert their target audience. The channels that lead to the most conversions over a certain sales cycle will get the funding and resources needed to take profits to the next level.