“Half my advertising is wasted. I just don’t know which half.” – John Wannamaker
Justifying marketing budgets is a tale as old as time, well, urban, corporate time at least. Marketers constantly struggle to show the direct ROI on their marketing and media spend. There could be multiple factors contributing to this difficulty, like sales focused contracts, long sales cycle, or ineffective media spend. Don’t let them hit you like a ‘stupefy spell’. Read on to know just how you could make your marketing attribution life easier.
What is Marketing Attribution?
Measuring the impact that campaigns, conferences/events, or channels have on revenue by assigning credit to all the successful marketing touches from lead acquisition to closure. The idea is to focus on what all goes into closing a deal, not only the vanity metrics like email opens, clicks, or social media post analytics, but also the driving pipeline and revenue. The big question for marketers is – what chunk of our pipeline and revenue can we attribute to marketing campaigns? Credit is attributed to different touch points along the customer’s journey, depending on the attribution model the organization uses.
What are the different stages/touches that a customer’s journey consists of?
1. Anonymous Touch: This is also the original lead source or channel where the lead first stumbles upon you. These could be Search Engine Page Results or PPC advertisements.
2. First Touch: This is the lead generation stage where a lead first becomes known to you, which could be through filling the ‘Contact Us’ or ‘Download Content’ forms.
3. Middle Touch: This is the stage where you nurture the lead and keep it engaged through blog posts, webinars, infographics, podcasts, and other social media posts. There could be a single touch or multiple touches between the first and last touch point where the known lead interacts with your content, over time.
4. Last Touch: This is the lead conversion stage and the last interaction that a lead has with your brand before it becomes an opportunity.
What kind of attribution models are there?
1. No Model: Having no attribution model in place is just utter chaos.
2. Single-Touch Attribution: Attributing 100% credit to one, stand-alone marketing touch point. In a single-touch attribution, there are two kinds of models:
- First-Touch Attribution: Assigning 100% credit to the first interaction when a lead becomes known to your brand.
- Last-Touch Attribution: Assigning 100% credit to the last interaction, that is lead conversion.
3. Multi-Touch Attribution: Assigning credit to each touch point in the sales cycle.
The single-touch attribution models emphasize on and give credit to only one chunk of the customer journey. The other stages of the customer journey are completely overlooked, regardless of the impact they made on the customer. The solutions for avoiding these issues is, you guessed it, a multi-touch attribution model.
What kind of multi-touch attribution models are there?
The single-touch attribution models are flawed but simple to understand. When you prospect across different platforms, devices, and through various campaigns, why shouldn’t you give credit where credit is due? The devil is in the details, you see! Multi-touch attribution helps you with these details by determining the value of each customer touch point that leads to conversion.
The ultimate goal is to figure out future spend for the acquisition of new customers. Multi-touch attribution can be regarded as a set of rules that helps you give variable credit or ‘weight’ to the different marketing channels that you campaign through. There are 6 kinds of multi-touch attribution models:
1. Linear Model: This is also referred to as evenly-weighted attribution and does exactly what it literally sounds like. It attributes the same weight or credit to each touchpoint along the buyer’s journey, be it first, middle, or the final interactions, making it the simplest model for multi-touch attribution. For instance, if there were 4 touchpoints, they would each be attributed 20% of the sale. The downside to this even distribution approach is that it may undervalue high-impact touchpoints or over value low-impact touch points.
2. U-Shaped Model: Also referred to as positional attribution, U-shaped attribution focuses on specific touches in the buyer’s cycle, mainly the first and last touches. It gives 40% credit each to the first and last touchpoints, and the left over 20% credit is distributed across the middle touches. The downside of this model is that it puts the first and last touches on a pedestal, namely lead generation and conversion, and the middle touchpoints kind of lose their spotlight due to low credit assigned to them, regardless of how impactful they may have been.
3. W-Shaped Model: This model is similar to the U-shaped model, but it includes an additional, supremely important touchpoint – lead creation. It assigns 90% credit (30% each) to the first touch, lead conversion, and opportunity. The remaining 10% credit is distributed across all other touchpoints. There are fewer marketing interactions after a lead becomes an opportunity as the sales team takes over then. The marketing departments of organizations that use the W-shaped model, often seek the freedom to attribute the actual percentages of the revenue credit, since some marketing touchpoints are more impactful than the others. This way marketing gets to meet its reporting criteria.
4. Time Decay Model: This model gives more credit to the interactions that happen closer to the conversion. You may think why, a marketer in their right mind, would choose this model. Well, B2B sales cycles are so atrociously long that the earlier touchpoints may not necessarily be all that impactful. These touchpoints closer to the conversion event receive a more pronounced and deliberate recognition exhibiting that they contributed most in closing the scale. The downside of this model is that earlier touchpoints receive less credit than they may deserve.
5. Full Path Model: This model adds the final touch (closure) to the three touchpoints that a W-shaped model attributes credit to (first touch, lead conversion, and opportunity). By the closure touchpoint, we mean the post-opportunity stage marketing initiatives. This model also incorporates sales activities in the mix, that is, even the follow up interactions by sales teams can be measured. 22.5% of the revenue credit is allocated to each of the key touchpoints, across all funnel stages. The remaining 10% of the credit is distributed to the additional touchpoints that assisted in ultimately closing the sale.
6. Custom Model: This is an advanced multi-touch attribution model in which the organization has the capability to set the weighting of their model to fit their specific reporting needs. B2B marketers can assign an assorted amount of credit to touchpoints, rather than being locked into a static model. A custom model is the most sophisticated multi-touch attribution model that is available. The organization may need to go through a hit and trial process to create a custom model, but it definitely would be worth it.
Why is a Multi-Touch Attribution model better?
The purpose of using a multi-touch attribution model is to know where to invest more in the future for customer acquisition because this model divides credit to the campaigns, keywords, platforms, and all the other touchpoints that contribute to the sale.
A Google Digital Marketing Evangelist, Avinash Kaushik, once beautifully said, “If early touch points were so magnificent, why didn’t they convert?”. When in doubt as to how important a multi-touch attribution model could be, just ask yourself this question. Each stage/touchpoint has a unique purpose within the customer journey. Each stage needs to be credited based on the unique sales cycle. You won’t have the bottom of the funnel without the top or middle of the funnel.
Attribution helps you to determine the true worth of your team and impact on the organization pipeline. If you get it right, you may just achieve the nearly impossible, a united front: sales, marketing, and business development. Even though great things happen when you don’t care who gets the credit, if you give credit where credit is due, you’re sure to hit a home run!