Advertising

What Is Marketing Attribution and How Does It Work?

What Is Marketing Attribution and How Does It Work?

16 Min Read

They say ignorance is bliss. Well, in marketing, it’s most certainly not!

As a marketer, operating in the dark is a proven recipe for wasted budgets and unfulfilled potential. The more you know about the performance of your go-to actions on different marketing channels, the better you can refine your strategies and allocate your resources. That’s where marketing attribution comes into play as a data-driven solution that enables you to gauge the effectiveness of every touch point in your customer’s path to conversion — from the first interaction to the final purchase and beyond.

In the past year, businesses across many industries frittered away between 40% and 60% of their marketing budgets, and that’s only on the digital front. Although several factors could be behind these numbers, understanding the actual impact of each of their initiatives could have helped these marketers use those funds more wisely. Research suggests that brands with proper attribution and optimization methodologies in place can eliminate up to 94% of their ad spend waste.

What Is Marketing Attribution?

On average, it takes between five and eight marketing touchpoints to generate a conversion. Thankfully, engaging with your existing and potential customers to persuade them to take a particular action is easier than ever before. Nowadays, you have a vast selection of customer interaction avenues at your disposal, both online and offline. The options include but are not limited to:

  • Social media platforms
  • Email marketing
  • Websites
  • Print media
  • Broadcasting media
  • Networking events

But among this increasingly diverse advertising arsenal, how do you understand which channels are actually driving conversions? Two words for you: marketing attribution.

Now, when we ask, “What is attribution in marketing?” we’re basically referring to the conscious effort to give credit where it’s due within your overall marketing strategy. It all boils down to figuring out which of your many efforts is contributing, even if ever so slightly, to generating purchases, sign-ups, downloads, and more.

For example, a potential customer might initially discover your product or service through a quick Google search, engage with your brand on social media, go through your website, and finally make a purchase after receiving an abandoned-cart email notification. In this case, all of the mentioned touch points could play a role in achieving that conversion, but how much credit each one should get is not always evident at first glance.

Attribution helps you understand which touch point had the most considerable influence on the customer’s purchasing decision so that you can tweak your marketing plan accordingly.

Why Is Marketing Attribution Important?

Marketing strategies often involve loads of experimentation and iteration until you find the most effective way to convince your target audience you’re their best bet. But marketing trends and consumer behaviors are constantly evolving, which means even your top strategies might need adjusting based on real-time shifts. Marketing attribution minimizes the guesswork so that you can get the most consistent results, saving time, money, and effort in the process.

Although marketing attribution is still not universally used, a recent study revealed that at least eight out of 10 marketers recognize its value in their quantitative reporting. After all, moving from continuous trial and error to statistically backed actions helps improve the following.

Data-Driven Decision-Making

When you assess how individual elements impact your campaigns, you can see what to improve as you go. This clever approach ensures you’re constantly refining your strategies for maximum effectiveness to keep your customers coming back for more. Analyzing historical data on what works — or what doesn’t, for that matter — can also help you build predictive models to anticipate the outcome of your future campaigns.

Budget Allocation

As mentioned earlier, marketing attribution lets you identify the channels that will give you the biggest bang for your buck. This helps shift financial resources away from underperforming touchpoints and gear them toward highly consequential ones instead. As a result, with the right attribution model, you’re not just optimizing your ad spend — you’re also maximizing the impact of your marketing endeavors.

Optimization and Campaign Improvement

Attribution reveals which elements within your campaigns are resonating the most with your audience and which ones are falling short of the mark. This information is critical to fine-tuning your messaging, targeting, and creative assets in an attempt to improve your overall campaign performance.

Understanding the customer journey and the interactions that fuel purchase-related decision-making allows for added campaign personalization. As you get better at addressing your clients’ wants and needs, they’ll engage more, and your conversion rates will grow.

Customer Journey Insights

You can identify gaps or inconsistencies in the customer experience by taking a close look at the various touch points your customers interact with before making a purchase. It will put you on the right track to make all of the necessary changes to enrich the customer journey and maximize conversions.

A whopping 81% of buyers are more likely to continue buying from you if they have a positive experience with your brand. Guaranteeing seamless interactions across all touchpoints is an excellent way to build trust among your customers and foster a longer-term relationship with them.

ROI Measurement

Marketing attribution allows you to accurately estimate the cost of acquiring each and every new customer, taking all the touch points involved in the journey into account. This data is the secret ingredient for optimizing your marketing spend and guaranteeing you’re getting the most value for your hard-earned cash.

Single-Touch vs. Multi-Touch Attribution

Marketing attribution entails two primary types of models that branch out into many more. First, there’s single-touch attribution, which assigns all the credit for each conversion to just one touchpoint. This method may work in some cases. However, it could also leave you with an incomplete and potentially misleading picture of the customer journey.

Alternatively, we have multi-touch attribution, which acknowledges that customers may interact with businesses through several touch points before making a purchasing decision. This approach offers a more comprehensive account of the customer journey and the various elements influencing conversions. It considers at least two of the channels in your campaign, sometimes even spreading credit across all touch points involved.

Multi-Touch vs. Multi-Channel Attribution

Marketers often use these concepts interchangeably. Nonetheless, there are a few important distinctions between the two you should take into account.

As the name implies, multi-channel attribution evaluates how specific channels impact the buyer and help generate conversions, whether we’re talking social media, organic search, or paid search ads. On the other hand, multi-touch attribution is much more precise, primarily focusing on specific campaigns — including specific posts, the channel they ran on, and the order in which they were interacted with.

Types of Marketing Attribution Models

As previously stated, there’s a wide array of marketing attribution models. Each has its own unique criteria for assigning credit to one or various touch points in the customer journey.

First-Touch Attribution 

This single-touch attribution marketing model gives 100% of the conversion credit to the first marketing channel the buyer comes in contact with. It basically assumes that’s the one touchpoint that drew their attention and triggered the chain reaction that led to a conversion.

In other words, according to first-touch attribution, it doesn’t matter whether your customer spent hours on your site or engaging with you on social media. If what caught their eye and got them there in the first place was a paid ad or an email, that’s the interaction that deserves a round of applause.

Last-Touch Attribution

This model is pretty much the opposite of first-touch attribution. It assigns the entirety of the credit for a conversion to the very last touchpoint a customer interacts with before making a purchase. To put it more simply, it emphasizes the final step in the customer journey, assuming that the last touch had the most significant impact on the buyer’s decision to convert.

In this case, if a client found you through a search engine, used your chatbot to solve their questions on your offering, and ultimately used a coupon to finalize their purchase, last-touch attribution would credit the coupon usage as the sole driver of the conversion.

Linear Attribution

This multi-touch model is fairly straightforward. Linear attribution gives every touchpoint equal credit in persuading a customer to buy from you. So if they initially heard about you through a paid ad, later followed you on social media, and finally subscribed to your newsletter before taking the plunge, according to linear attribution, each of these channels would be considered as valuable as the next one.

Lead-Conversion Touch Attribution

Lead-conversion touch attribution mainly centers on identifying the exact touch points that convert a lead into a buying customer. It doesn’t just credit their first or last interaction before converting, nor does it spread credit evenly across all channels in your strategy. Instead, it examines every exchange they had with your business and underscores the most influential ones in the sequence.

Time Decay Attribution Model

Time decay attribution is a model used in digital marketing that gives increasing credit to customer touchpoints the closer they occur to the conversion event. It is based on the assumption that more recent interactions are more influential in the decision-making process, thereby attributing greater value to these later engagements in the customer journey.

U-Shaped Attribution (Position-Based)

U-shaped attribution studies the impact of various marketing touch points on a customer’s purchase decision. However, it gives more credit to the first and last interactions with your brand, which are considered the most influential in sparking initial interest and driving the final purchase decision.

W-Shaped Attribution

The W-shaped attribution model allocates a significant portion of the conversion credit to the three most influential peaks of the purchasing journey: the first, last, and middle touchpoints. It might also recognize smaller contributions from other channels but give them only a tiny percentage of the credit.

Custom Attribution

Sometimes, pre-existing models don’t necessarily fit the needs of certain businesses. The good news is that anyone can choose to tailor their own attribution model instead of solely depending on the ones described above.

When you implement a custom attribution model, you’re acknowledging that each customer is unique and, in consequence, may have a distinct journey with your brand. With this in mind, you would analyze each case separately depending on the specific interactions that prompted your buyers to take action.

How to Choose the Right Attribution Model

When selecting the best attribution marketing model for your business, there’s no one-size-fits-all answer. You must take several factors into account to gather data that’s relevant to your particular situation. Otherwise, you could end up getting inaccurate results that will send you back to square one.

If you’re lost in the process of finding your best fit, here’s a step-by-step.

1. Understand Attribution Models

Learning the difference between each of the marketing attribution models will spare you many headaches down the line. It will prevent you from mindlessly adopting attribution methodologies that might not suit your particular needs or align with your overarching business objectives.

2. Define Your Business Goals

What are you trying to achieve with your marketing efforts? Is it driving sales, generating leads, increasing brand awareness, or something else? Neatly defined objectives will help you choose the attribution model that provides the most valuable insights and drives optimal results.

3. Assess Your Customer Journey

When in doubt, map out the different stages your customers go through before making a purchase or taking a desired action. Doing so in as much detail as you can will help you determine key touch points and assign appropriate credit.

4. Evaluate the Available Data

You’ll need to evaluate the caliber and integrity of your data, as erroneous or incomplete information can produce inaccurate marketing attribution. You can generate high-quality datasets for your research by combining website analytics, customer relationship management (CRM) data, social media insights, and other relevant marketing data.

5. Consider Channel and Campaign Characteristics

Understanding the reach, engagement, and conversion rates of your preferred channels and campaigns is essential during this step. That’s why you must first learn how different touch points contribute to different stages of the customer journey and then choose an attribution model that recognizes their varying impact.

6. Test and Validate

Don’t just pick a model and stick with it forever. Instead, experiment with different methodologies and compare the results. A/B testing is an excellent idea if you want to contrast the efficiency of different marketing attribution models and measure how they affect your key performance indicators (KPIs).

7. Involve Stakeholders

Keep your marketing team, your sales team, and other relevant stakeholders in the loop about your chosen attribution model and its implications. Getting buy-in from these parties will help guarantee everyone is aligned on the goals and limitations of your chosen approach.

8. Refine Your Approach

As your business grows and the marketing trends shift, you must continuously adapt your credit attribution methods. Regularly monitor and analyze your data, and be prepared to adjust your model as needed to ensure its accuracy and relevance.

Make a constant effort to keep up with industry best practices and emerging attribution models. In addition, always be open to incorporating new approaches to optimize your marketing initiatives and strategies so that you don’t become stagnant.

Marketing Attribution Best Practices

Much like with anything else in your marketing plan, implementing the right marketing attribution model can be a complex task. That’s why you must remain vigilant and implement the following.

Multi-Touch Attribution

Single-touch models can provide some clarity, but they tend to oversimplify the customer journey. Multi-touch approaches, on the other hand, recognize the multitude of interactions that influence conversions, giving you a more holistic view of marketing attribution.

Cross-Channel Integration

For marketing attribution to work as expected, you must break down data silos. Promote seamless integration between your website, CRM, and social media analytics for a more unified view of the customer journey across all touch points.

Clear KPIs and Goal Alignment

Your overall objectives and key performance indicators must play on the same team if you want to create reliable attribution reports. Communicate these indicators clearly to your team and stakeholders to keep everyone on the same page.

Test and Control Groups

Don’t just assume that your chosen model is the absolute best and you’ll never outgrow it. As previously stated, you can use A/B testing to compare different attribution models and periodically track their impact on your KPIs. Setting up control groups to isolate the effects of your preferred attribution model will keep you on top of its effectiveness.

Continuous Measurement and Optimization

Attribution marketing is not a one-time exercise. We cannot stress enough the importance of regularly monitoring your data and tracking the performance of your chosen model. This will keep you adaptable and ready to tackle any emerging challenges, assuring you that you’re using the most effective approach.

Choose the Right CRM

Investing in a CRM that seamlessly integrates with your preferred marketing and attribution tools is a no-brainer. This move will allow you to consolidate customer data, track interactions across channels, and attribute touch points more accurately.

Use Automation

Delegating repetitive tasks to machines is another essential measure if you’re serious about resource optimization. Turn to marketing automation tools to streamline data collection, data cleaning, data analysis, and reporting. This crucial step will free up your team to focus on interpreting insights and making data-driven decisions based on your attribution insights.

Common Marketing Attribution Mistakes to Avoid

You don’t want all your attribution marketing work to be in vain, do you? In order to keep your model running like clockwork and gather the most precise attribution data to optimize your marketing strategy, you must steer clear of the following.

Heavy Reliance on Last-Click Attribution

Giving all of the credit to the final touch point before a conversion may sometimes seem like the most logical thing to do. However, doing so may overlook the valuable contributions of equally important interactions. To prevent this, opt for multi-touch models that recognize the influence of various touch points along the entire customer journey.

Ignoring Offline Channels

While everything seems to be happening online these days, statistics show that offline marketing spending in the U.S. still amounted to more than $202 billion last year. Limiting your view to digital interactions represents a lot of missed opportunities if you want to expand your reach. Offline efforts like print ads, out-of-home (OOH), events, and word of mouth still have game in driving conversions, and you should strive to give them credit when appropriate.

Lack of Data Integration

Isolating data across different platforms creates blind spots in your marketing attribution models. Conversely, investing in the right tools and processes to unify data from all marketing channels and touch points encourages comprehensive recognition and eliminates any unnecessary gaps in your insights.

Inadequate Tracking and Attribution Models

Outdated or poorly chosen models may hinder accurate channel assessment, customer journey understanding, and return on investment (ROI) measurement. This lack of precision may result in missed optimization opportunities and stunted growth.

Lack of Experimentation and Testing

Don’t settle for the first model you implement. Experiment with different attribution methods and analyze their impact on your KPIs. Once more, A/B testing is a terrific tool to compare models and identify the one that reveals the most accurate insights.

Other Commonly Used Terms in Marketing Attribution

When using attribution to enrich your marketing data and decision-making, you might encounter various terms beyond the basics. Here are two you should keep a close eye on to future-proof your attribution marketing plan.

Cross-Device Attribution

With the advent of mobile technology, tracking customer interactions across multiple gadgets has become more and more important. This is referred to as cross-device attribution. After all, both B2B and B2C buyers are often on the go, and it’s no surprise that they research and complete their purchases on smartphones, tablets, and other devices.

Cookieless Attribution

Privacy regulations and browser restrictions are rapidly changing, and cookies are becoming less reliable by the minute. As a response to this challenge, cookieless attribution methods leverage alternative identifiers and advanced data analysis to provide accurate attribution insights even without traditional trackers.

Marketing Attribution and Traditional TV Advertising

Linear TV ads remain a powerful resource in the marketer’s toolkit. However, while their reach and ability to build brand awareness are undeniable, accurately measuring their contribution to conversions within the broader marketing mix presents significant challenges and limitations, including:

  • Lack of granularity: You can’t track individual conversions from linear TV ads, often having to resort to last-touch attribution to account for their impact on the customer journey.
  • Limited data capture: Unlike digital channels, traditional TV ads provide no real-time data or audience targeting.
  • High cost and complexity: Advanced linear TV attribution solutions can be expensive and require expertise for proper implementation.
  • Attribution bias: traditional TV ads often receive last-touch credit, which may cause you to disregard other vital influences in the customer journey.

How Connected TV Changes Attribution in Marketing

Connected TV (CTV) is revolutionizing marketing attribution. Unlike traditional TV, it enables detailed data collection on viewers’ interactions with ads, revealing ad exposures, clicks, and website visits. This data opens doors to sophisticated attribution methodologies, but many current models still struggle with tracking ad viewability, cross-device journeys, and full conversion attribution.

At MNTN, we understand these limitations. That’s why we developed Verified Visits™, an innovative tool that goes beyond surface-level interactions to:

  • Guarantee your ads are truly seen 
  • Validate visit sources
  • Monitor the user journeys across devices
  • Connect CTV data to offline actions

Tired of wasted ad spend and unclear campaign effectiveness? Let us help you. Schedule a demo today!

Marketing Attribution: Final Thoughts

So there you have it. Marketing attribution might just be the missing piece that completes your marketing puzzle this year. When implemented right, it will help you determine whether your many initiatives across channels are doing what they should: earning business and boosting conversions.

Attribution marketing will also help you identify when to double-down on your efforts or abandon them altogether to optimize your campaigns. Now that you’re no longer wondering what marketing attribution is, you’re ready to unlock all the benefits it has in store for you and your business.