We highlight our attribution modeling capabilities under our site’s “Support” tab, but the concept is important enough to merit a closer look. Don’t worry: This won’t be an overly technical odyssey into the digital abyss. As one of the critical pillars of inbound marketing, attribution modeling is easily explained in plain English.
What Is Attribution Modeling?
It’s rarely a good idea to put all your eggs in one basket, and your company’s marketing plan is no exception. A well-developed inbound marketing strategy leverages multiple channels, including display ads, paid search, email marketing, search engine optimization, and social media to reach and engage as many prospects as possible. When a prospect engages with a given channel, data about this interaction — for instance, a click-through on a banner or paid search ad — is generated and stored. You can access this important information by generating reports through Google Analytics, your email marketing platform and other sources., Prospects usually interact with multiple marketing channels before converting. Over a period of several days or weeks, a typical user might navigate to your site via an organic search result that’s relevant to your products, click on one of your display ads, type your URL directly into their browser and follow a link in a marketing email before entering your sales funnel. In industry parlance, each step — or channel — on this journey is known as a “touch point.”
For a long time, a dearth of reliable data made it acceptable to simply attribute each confirmed lead or sale to the touch point that led directly to it. Despite being just one of four touch points on the prospect’s journey towards a sale, the marketing email link in this example would get 100 percent of the credit for said sale. Since it’s obvious that the other channels influenced the prospect in some fashion, this model doesn’t tell the whole story. How do you go about assigning credit to the other three “indirect” channels in the scenario?
Advanced attribution modeling holds the key. To quote Yair Halevi of iMediaConnection, “The purpose of marketing attribution is to quantify the influence each advertising impression has on a consumer’s decision to make a purchase decision or convert.”
Three Unequal Models
The “model” described in the example above is known as “single-click” or “last-point” attribution, and it’s regarded as the simplest, least accurate form of attribution. Three models of attribution are more sophisticated:
- Equal-weight modeling: Assigns equal amounts of credit to each touch point in the prospect’s engagement cycle
- Customer credit modeling: Utilizes existing conversion models to “predict” the weight that each channel should receive
- Algorithmic/probabilistic modeling: Uses complex algorithms that account for patterns within conversion data to determine which channels were most critical to each customer’s conversion process
Of these, algorithmic modeling is the most sophisticated and illustrative. When it’s used properly, it can offer near real-time insights into the performance of your various advertising channels and help you make quick decisions about how to allocate your marketing dollars. The end result is a nimble, responsive inbound marketing campaign.
Why Does It Matter?
As the old saying goes, you can’t manage what you can’t measure. Attribution modeling gives you a detailed look at how your customers engage with your various marketing channels. More importantly, it gives strong clues as to which channels offer the highest return on marketing investment (ROMI) and which may be a waste of your valuable advertising dollars.
Here’s a simple example: Let’s say you invest $100 in a trade journal promotion and $100 in paid search ads on the first day of the month. Over the next 30 days, attribution modeling points you to an unmistakable conclusion: Relative to the trade promo, your paid search ads are about three times more likely to make a meaningful contribution to any given conversion. Should you continue to allocate advertising dollars to each channel at the same rate? All other things being equal, it would make sense for you to invest in paid search at three times the rate as the other medium. In a “real world” scenario, you might even scale back your display efforts further or discontinue them altogether.
Making Data Work for You
Attribution modeling isn’t just a critical aspect of your company’s inbound marketing strategy. It’s also proof positive that you don’t need to be a digital expert to understand the basics of what we do. If you need more clarification on this or any other concept, though, don’t hesitate to reach out to us. We enjoy talking about our work.