How to measure marketing’s impact on the customer journey
Digital media has transformed the way customers arrive at purchase. And, faced with a series of touchpoints that span multiple channels and devices, marketers are finding it increasingly challenging to map where customers are coming from, where they’re going, and how they make choices. Calculating the impact of campaigns was easier when they were limited to radio, television and print. But as digital platforms proliferate, marketers must find solutions to measure how ads on different channels, mediums and devices all interact to move customers down the funnel.
So how do you distinguish between high-performing and under-performing marketing campaigns in a multi-channel environment? Simple: attribution.
Attribution is the process of assigning revenue credit to customer touchpoints along the path to conversion. It takes into account all your digital channels including, display, social media, email, search, referrals, etc.
But just as digital channels have multiplied, so too have attribution models. Here we’ve outlined the most common attribution models and how you can use each to optimize your campaigns while making the most of your marketing dollars.
Single-touch attribution models allocate revenue credit to a single point of contact on the customer path. This model is the most common, with 60% of marketers using single touch and 40% using multi touch. The advantage of a single-touch model is that it’s easy to implement and understand. The downside is that it fails to consider other touchpoints within the path to purchase. This blind spot could cause a marketer to invest in a marketing initiative that is less effective than it might at first appear to be. However, for businesses new to attribution, experimenting with single-touch models can be an important first step in finding a general view of the customer’s path to purchase.
1. First Touch
With first-touch attribution, full credit is given to the customer’s first point of contact with your brand. You can use this model when you want to distinguish what channels bring in new leads. The disadvantage is that it fails to measure the effectiveness of nurturing campaigns and ignores the value of processes that move customers closer to conversion.
2. Last Touch
Last-touch attribution gives full credit to the last contact point before conversion. It prioritizes the most recent interaction an individual had with your brand over any preceding step that might have contributed to awareness or consideration. This model works for marketers who want to know which touchpoints trigger immediate conversions.
Multi-touch attribution is best used when you have a large volume of data coming from many sources. Also, these models more accurately give credit to the entire range of customer interaction with your brand. Because you are recognizing more than one touchpoint, you’re able to identify which channels are under or overperforming within the context of your total media mix. This will give you the insight you need to adjust your strategy and properly allocate your marketing budget. In fact, 47% of marketers using multi-touch attribution believe they’re using the right model, compared to just 10% and 31%, respectively of marketers using single-touch attribution.
The linear attribution model gives equal credit to every touchpoint along the path to conversion. This is best used if you want to look at all the channels that are contributing to a customer journey. The downside to attributing equal credit to all touchpoints doesn’t enable you to identify and optimize high-performing components within a single campaign.
4. Time Decay
This model gives proportionally increasing credit as the lead gets closer to conversion. Time-decay is best used when you have a long sales cycle and you want to identify which channels have the greatest impact on moving things along. On the downside, this model overlooks the value of the sources that pulled leads into your funnel in the first place.
This attribution model gives the highest credit (typically 40% each) to the first and last touch and divides the remaining 20% among all touchpoints in between. This is best used when you want to measure end-to-end performance. You acknowledge that the first and last touch have more value than mid-funnel touches.
Similar to U-shaped attribution, this model gives a high value to the first touch and last touch (30% each). However, it also assigns equal value (again 30%) to the touchpoint that coincides with lead creation. It then divides the remaining 10% value to all other touchpoints. Essentially, this model attributes the most credit to three main areas – visit, lead, and opportunity. This model works best in processes with a marketing-to-sales handoff – most commonly used by B2B marketers.
Creating a custom model allows you to attribute varying amounts of credit to touchpoints across the path to purchase. This model is best for marketers who have been tracking numbers for years. It requires you to have in-depth understanding of how different campaign formats have worked in the past. For example, a content marketer could give higher credit to a particular piece of content like an ebook, webinar, or video, if there is substantial data indicating what types of content have driven traffic in the past.
Also, the proliferation of the Internet of things (IoT) has made it crucial for marketers to glean insight not only from multiple channels but multiple devices. In fact, 74% of marketers said that matching customers across multiple devices was one of their top priorities. With that said, if your customers are coming from multiple platforms and devices, a custom attribution model is best.
All in all, the model you choose will depend on your campaign goals. If you stick with one attribution model, you might not be get the full picture. If you use multiple models for one campaign, your data might conflict and it will be difficult to understand.
Ask yourself this: What am I trying to accomplish? That will determine which model is right for you.
Are there any attribution models that work best for your business? Leave a comment to share your thoughts.
Published on April 24, 2017