No, really…what is marketing attribution?
The short definition is that it is a method of measuring the ROI from marketing channels.
The long definition for marketing attribution is the practice of ‘attributing’ (as the name suggests) effectiveness to the multiple channels used by a marketing organization. The practice involves the use of data and often involves software to determine which marketing channels, marketing tactics, and campaigns are contributing to bookings, pipeline, and revenue.
Marketers use multiple marketing channels and have a lot of data available to them. As a result, marketers no longer have to “hope” for the right audience to engage with their campaigns or content. To stay ahead of the curve, marketers have to generate channel-specific content and use the right channels to get the best ROI on their marketing spend. By using marketing attribution, powered by analytics, you ensure you generate quality leads and choose channels that your audience spends time in.
Customers (especially B2B customers) seldom, if ever, purchase products or services after visiting a website for the first time. There are usually multiple steps that a potential customer takes before making a decision to sign a contract. As a result, multiple channels are necessary for that final purchase.
Marketing attribution attempts to understand the customer journey. For example, this could include social media channels, digital advertising, and email campaigns. Attribution helps you understand which channels and campaigns had the greatest impact on your customers’ decision to convert or take the next step in their journey.
Of course, in an ideal world, b2b marketers would be able to view a customer’s entire journey, and be able say with 100% certainty why customers make each decision. However, this is quite unrealistic and unscalable. This is where marketing attribution tools, models, and software come in to help marketers make more informed decisions.
What are marketing attribution models and why do they matter?
Standard marketing attribution models are mathematical frameworks that use data to help attribute conversions to marketing channels. Best in class marketing attribution software also incorporates sales, product, and partner signals in order to create a fuller picture–which is key to getting cross-functional sign off on attribution. Both methods provide valuable insights that marketers can use to further fine-tune and develop their campaigns. Without knowing what channels work for you and in what capacity, a marketing campaign’s impact can be severely limited.
Marketing attribution models can be divided into two classes: single-touch and multi-touch models.
Single-touch attribution models
As the name suggests, single-touch models attribute all credit to a single touchpoint in the customer journey.
- First-touch model – This model credits all dollars associated with an opportunity to the first point of contact between a prospect and the first recorded interaction, regardless of whether the first touchpoint was the actual reason for conversion. It gives no credit to subsequent interactions that may influence customer decisions. Marketers most often use this model to understand the impact of top-of-the-funnel marketing methods.
- Last-touch model – Conversely, this model attributes all the dollars associated with an opportunity to the last interaction recorded before engaging with sales (or converting into an opportunity). This model ignores all other touch-points.
Multi-touch attribution models
Multi-touch models consider all touch-points that customers take before making the final purchase. Multi-touch attribution unlocks numerous advantages and is considered more accurate than single-touch models. The primary difference between the following models is driven by how they assign credit to each touchpoint.
- Linear or Even-Weighted – This model divides credit evenly between all touch-points from the first touch until the opportunity is closed. In other words, if ten touch-points are recorded, the opportunity dollars are divided equally and each touch gets 10% of the total value.
- U-Shaped – The U-Shaped model assumes that not all touch-points impact conversions evenly. This model gives greater credit to the first and last touchpoint, while giving less credit to all other touch-points. For example, the first and the last touch points are given 40% credit each for generating leads, while the middle two touch points are given 20% in total.
- Time-decay – The time-decay model assumes that touch points closer to the purchase play a greater role in converting customers. So, the first touchpoint is given the least credit, while every subsequent touchpoint is given a larger amount of credit in driving conversions.
- W-Shaped – Unlike the other models, the W-Shaped model considers an additional touchpoint in the customer journey – the opportunity stage. The first touch, lead conversion, and opportunity creation receive the most credit. For example, these three key points may receive 30% of the credit each. The remaining touch-points receive an equal portion of the 10% left, which gives this model the W shape.
Marketing Attribution Technology
According to Persistence Market Research, the global multi-touch marketing attribution software market is forecasted to reach a valuation of $4.8 billion by 2032 from $1.4 billion in 2022. This is an impressive compound annual growth rate (CAGR) of 13.1% over the entire forecast period. This growth is driven by the increasing need to optimize marketing spend and figure out which channel is the most impactful in an increasing number of marketing channels.
To get the most in-depth insights, marketers use a variety of attribution models because each model answers a different question. For example, Last Touch is fantastic at narrowing down what convinces people to engage with sales and linear demonstrates what the customers interact with the most or least throughout the buying process.
Getting the right insights will require the right software that is capable of rigorous analytics. Some factors you should consider before purchasing a software are speed, accuracy, and analyzing more than just marketing campaign data such as web visits, deal registrations, free trial sign-ups, and more.
That’s where we come in. CaliberMind connects to all your key go-to-market systems and works with you to identify your data’s weak points. We clean your data and keep it pristine so you can focus on what matters–producing more pipeline and revenue faster.