What are attribution models? – ShareASale Blog

It’s important as a merchant to understand
which online channels are driving sales and conversions. Attribution models can
help analyze the data.

What are attribution models?  
It’s important for merchants to understand where
their sales and conversions come from. An attribution model is a set of rules
that helps gather and analyze this information. Attribution modeling can come
in a few shapes and sizes, so let’s explore some of the different ways to make
use of marketing attribution models. 
Why is marketing attribution important? 
There are many pathways a customer may take before ultimately
making a purchase or conversion. They might simply click an ad, visit your
website and make a transaction – but in most cases, there’s a lot more to the
journey than that.  
For example, a customer might first click on a banner ad and
visit your website but not make a purchase. Then, days later they might be
served a retargeting ad, which they click, but again does not lead to a sale.
While on your site they may have visited your blog and learned a little more
about the brand and product, and they might then follow your business on social
media. The following week they see a post with a link that ultimately leads to
them finally making the conversion.  
Which marketing channel should be credited for the sale? Was it
the original ad that introduced the brand? Was it the retargeting ad? How
important was the blog? Did it all come down to the social media
post?  
As a business, understanding which marketing channels have the
greatest impact is essential to your continued success. It helps you align your
strategy with the data, so you can place more emphasis and budget on what you
know works.   
Marketing attribution models allow businesses to analyze each of
these channels, or touchpoints, and determine which of them had the most significant
impact on gaining a conversion.  
What are the
different marketing attribution models? 
There are a number of different attribution models that each
distribute the value across touchpoints differently. Touchpoints describe any
point where a potential customer interacts with your business on the sales
journey: it could be display advertising, SEO, social media, email marketing,
paid search, and so on. 
The most common marketing attribution models are:  
Last-click attribution models
Also known as last interaction or last-touch attribution,
last-click attribution places all of the credit on the last
interaction the customer had with the business before converting. In our
earlier example, the social media link would receive 100% of the credit, as this
was the last touchpoint before the sale was made.  
This is the simplest attribution model and is often the default
model for analytics platforms. Because there are so many journeys that can lead
to a conversion, many feel the most accurate way to look at it is to simply
give all the credit to whatever the final interaction was.   
However, this disregards all of the other steps that
led to that final interaction. In our example, the customer would not have seen
and interacted with the social media post had they not initially been served
the ads and visited the site, so you may feel it’s illogical to give all
of the credit to the last touchpoint.
First interaction attribution models  
On the other hand, some might feel the very first interaction was
the most important. First interaction attribution gives 100% of the credit to
the first click. In our example, the first banner ad the customer clicked on
gets all the credit – it initiated the journey, and without it, none of the
other touchpoints would have been hit. 
With this model, whatever happens between the first interaction
and the conversion is insignificant; the first interaction sets the ball in
motion and therefore deserves all the credit.  
Last non-direct click attribution models  
Last non-direct click is another attribution model that places
100% of the credit on a single touchpoint, but in this case, any direct
interactions are disregarded. Direct traffic refers to a customer manually
entering your URL to visit your website, or clicking a bookmarked
link. The assumption is that if they’ve bookmarked your website or are typing
in your URL, they already know your company, and they likely already expect to
make a purchase.  
Linear attribution models  
A linear attribution model places equal value across every
touchpoint in the customer’s journey. While it does provide a more balanced
look, this assumes that every touchpoint was just as effective as the other –
which isn’t necessarily the case.  
A linear attribution model is a very straightforward model and
won’t really help you identify which marketing channel had the most significant
impact.
Time-decay attributions  
In a time-decay model, the value is spread across each
touchpoint, but not evenly. Instead, the touchpoints closer to conversion are
assigned a higher value. This is a great way to show the importance of customer
relationship building. The first interaction has the lowest value, but with
each touchpoint, the customer relationship grows stronger, before finally
leading to conversion after the last, most valuable interaction.
Position-based attribution models  
Position-based attribution gives different weighting to
different stages of the journey. One of the most common types of position-based
attribution is called U-shaped attribution. In this model, the first and
last touchpoints equally share the most value – 40% of the credit each, while
the interactions in between share the remaining 20%. So, in our example, the
first banner ad takes 40% of the credit, as does the social media channel,
while the retargeting ad and blog each take 10% of the credit.  
The first interaction is valuable as it introduced the customer
to the brand, the last interaction is equally as valuable as it closed the
deal, while the other touchpoints still carry some value, but not as
much. 
Attribution
and De-Duplication in the Affiliate Channel
While attribution remains essential in the affiliate channel,
affiliate programs also rely on de-duplication to allocate commission across
the partner base.  Most commonly, affiliate programs run on a “last
click wins” basis, meaning the last affiliate in the customer journey is
attributed the commission for the sale, but can also be used to accommodate
other digital channels, if an advertiser should choose to not pay for a sale if
the affiliate channel was not the last referring channel.  The IAB Affiliate
Marketing handbook indicates that all advertisers should provide complete
transparency on their de-duplication practices so publishers can understand how
their traffic is reviewed against other online channels.
Which multi-touch attribution model works best? 
Each model is useful in its own way, and businesses would
benefit from using each one to analyze their advertising strategy.  
First click is useful when analyzing which channels are best for
bringing in new customers and raising awareness. At the other end, last-click
attribution is best when analyzing conversions specifically, and which channels
best bring potential customers to the bottom of the sales
funnel.   
Last non-direct click attribution is similar to last
click and might be more useful, as you can argue that the last non-direct click
is what really sealed the deal.  
Position-based models still offer a broad view of each
touchpoint’s value while placing more importance on the start and finish of the
journey. This is useful for those who want to look closer at which channels are
most successful for acquiring audiences and which are most successful for converting
audiences, without completely discounting the steps in between.  
Think about the goals of your marketing campaign. If you’re
fully focused on sales, perhaps a last click or last non-direct click model
provides the best insight. If you’re more focused on increasing brand awareness
and gaining new leads, a first click model will help most. Perhaps you’re
interested in seeing how well you retain interest and awareness across the
entire sales cycle, in which case a linear model is ideal. If you’re running a
short campaign, like a special promotion, then a time decay model will be most
useful.  
How to use multi-touch attribution  
So, now we know the different ways we can analyze the sales
journey, but how do we use this information? The attribution model will show
you how much revenue should be attributed to each touchpoint.  
Let’s imagine you were focused on a single sale of $100 from a
customer that interacted with four touchpoints. If you used a single-touch
attribution model, the entire $100 would be credited to either the first or
last interaction. If you used a U-shaped position-based model, then $40 would
be attributed to the first click, $40 to the last click, and the two
touchpoints in between would each be attributed $10.  
You can then use this information to guide your marketing and
advertising spend going forward. Perhaps you find through attribution models
that hundreds of people engage with your blog without making a conversion, but
that social media ads do lead to conversions. You might then choose to increase
spend on social media, or you might use this info to reshape and improve
your blog content. 
ShareASale’s merchant tools are
making multi-touch
attribution more accessible and accurate than ever. Using the SingleView solution,
brands on the ShareASale network have a user-friendly, impartial, and
comprehensive platform to gain important marketing insights, helping you
measure the precise value of different affiliate partners and marketing
channels.  
SingleView, available to ShareASale
merchants via integrating with Awin’s Advertiser MasterTag, allows you to
track performance across some of the most popular ecommerce platforms. You can
then use this data to compare different attribution models, with in-depth
analysis tools, data-driven recommendations, and features that take the
guesswork out of attribution.   
Attribution modeling will help you form stronger partnerships with affiliate partners and better align your budget and strategy based on the channels that drive maximum value. With a robust approach to attribution modeling, you’ll gain a true understanding of your marketing strategy and how best to serve your target audience and conversion goals. If you’d like to know more about SingleView, you can get in touch with the team. 

Source: blog.shareasale.com

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