In today’s expansive and dynamic digital economy, customers usually follow a complicated and multilayered approach before they finally convert into a sale or lead. For a prospect to become a customer, they usually make interactions with a wide range of digital touchpoints – paid advertisements, social media posts, email messages, and many other channels.
This multitouch purchasing experience complicates the process of determining the extent that each channel contributed to an eventual conversion.
For example, a prospect customer clicks a paid advert and finds about your website. Seven days later, the same person clicks one of your social media posts, goes back to your website, and subscribes to your email newsletter. One day afterward, the individual clicks a call to action in one of your email marketing campaigns and returns for the third time. Finally, the person comes back later that day and types your website’s address directly on the browser, and purchases one of your products.
So, which marketing channel eventually led to the conversion, and by how much?
This is the question that marketing attribution seeks to answer.
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What is marketing attribution?
Marketing attribution refers to analyzing a set of historical user actions (also called touchpoints or events) that result in a conversion, and consequently assigning a value to every contributing action. With an attribution modeling comparison tool, such as Google Analytics, marketers can assess how the value of a conversion is distributed throughout the customer’s purchase journey. This way, they can maximize their efforts, and allocate most resources, to the campaigns and channels that produce the most conversions, resulting into a better ROI.
For example, if your social media campaigns lead to 20% of the conversions while email marketing is responsible for 80% of the results, you can increase the budget on email campaigns and shelve your expenditure on social media marketing. Without using attribution to map the path from acquiring a lead to converting into a customer, it may be difficult to know what works and what doesn’t.
During the days of traditional marketing, evaluating the influence of marketing to business operations was easy. If you placed an advertisement in a newspaper and recorded an 80% increase in sales, it was easy determining the source of the growth. However, with the current expansiveness of marketing channels, it is essential to use attribution modeling for getting enhanced visibility into marketing strategies and determining their effectiveness.
Single-Touch Marketing Attribution Models
Broadly, historical marketing attribution models fall into two main categories: single-touch and multi-touch. While the single-touch models assign a contributing value to just one touchpoint, the multi-touch models assess the performance of multiple touchpoints.
We discuss multi-touch attribution in the next part of this series – Multi-Touch Marketing Attribution Models: A Comprehensive Guide. And here are the three types of single-touch marketing attribution models we are going to explore now:
- Last-click attribution
- First-click attribution
- Last non-direct click attribution
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1. Last-click attribution
The last interaction attribution also called last-click or last-touch, is a popular single-touch model that assigns 100% of the conversion value to the last channel that the customer interacted with before converting – just as the name suggests. It concentrates on the last event that resulted into a conversion, without considering the customer journey up to that point.
Last-touch is the default attribution model that most tools, such as Google Analytics, use to report historical user actions. Most of the attribution tools give standard conversion reports that focus on the last interaction the customer had with your business before converting or buying.
The last-click interaction model is easy to use and set up. Today’s digital marketing is expansive and customers usually use a wide variety of platforms to reach company website or application. Since tracking their entire path is difficult, focusing on their last interaction point is a simple way of assessing the performance of the marketing efforts.
Since this model focuses on the last interaction, it does not give a deeper visibility into what happened during a customer’s entire path. The many interactions customers had with your business could also have played a critical role in the purchase decision. Therefore, this model does not portray a clear ROI picture.
Best use cases
The last-click attribution model may be suitable if your business has a short sales cycle. If your digital marketing efforts do not have multiple touchpoints, then only tracking the last interaction point could be a good performance indicator. Furthermore, if you have a sales funnel that is wide at the top but narrow at the bottom, the last interaction model could be appropriate.
2. First-click attribution
The first interaction model also called first-click or first-touch, is a single-touch model that gives 100% weight to the first channel that triggered interactions with your business. It’s the opposite of the last interaction model.
Just like the last-click model, the first-click interaction model is simple and easy to implement. Since no conversions can be made without customers first knowing about the existence of your business, the first-click model saves you the difficulties of monitoring the lengthy path customers take before making the buy decision.
The first-touch model ignores the other important interactions customers have with your business prior to making the purchase decision. As such, giving the whole weight to a single channel reduces its effectiveness in portraying a comprehensive ROI picture. You may not know how a sale was generated, ultimately.
Best use cases
In spite of its disadvantages, this model can be suitable when digital marketing efforts focus on raising awareness of potential customers. For example, if you are starting a new business and you want to increase your brand awareness, you may focus on campaigns that first expose customers to your brand, and use first-click modeling to monitor the performance.
Furthermore, this model is suitable if your business has a short buying cycle and immediate customer conversion is prioritized. You can also find it appropriate for tracking new top-of-the-funnel customers.
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3. Last non-direct click attribution
The last non-direct click attribution is a single-touch model that gives 100% weight to the last touchpoint that is not due to direct means. If a customer directly accessed your website, then this model steps back in the conversion journey and focuses on an interaction that is not direct.
Eliminating direct clicks makes this model more beneficial than the standard last-click model. When a customer goes to your site directly by typing its URL on the browser or clicking a bookmarked link, it means that they already know about its existence.
Therefore, filtering out the direct traffic in a last-click model can assist in assigning value to the promotional activity that had the most contributory role to the final conversion decision.
Just like the single-touch models that neglect the other touchpoints, the last non-direct click attribution model fails to display deeper visibility into the customer’s path prior to converting or buying.
Best use cases
The last non-direct click attribution model can be useful when analyzing the performance of marketing activities that are not due to direct traffic. If you want to know how your customers interacted with your business before accessing it directly, then this model could be appropriate.
These are the most popular single-touch attribution models, and in the next part of these series, we cover multi-touch marketing attribution models.
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