In marketing, understanding the ROI of various strategies and advertising efforts is essential. With the sheer number of channels available, brands must carefully rank what works most effectively with their target customers. The better they understand the places where they best engage their users, the easier it will be to properly allocate resources and bring in more leads and customers.
The problem that many brands encounter when trying to measure the success of their different methods is the increasing complexity of the buyer’s journey. Customers today generally interact with brands in multiple ways before they end up buying. For example, they might land on a site organically, download a white paper, click through emails, engage with PPC, attend a webinar, and then finally end up making a purchase.
When a customer goes through a path this convoluted, it can be a challenged to determine what deserves credit for this customer and revenue. Should it be the organic efforts since they initially introduced the customer to the brand? The webinar for finally convincing them to convert? Brands want to make their estimation as accurately as possible as a wrong measurement might end up drawing funds and resources away from effective means of engagement and overly investing in methods that did not have as much of an impact.
To solve this problem, marketers have developed several different types of attribution models. Each one emphasizes slightly different points in the buyer’s cycle, allowing brands to pick the one that makes the most sense for them and their brand.
Keep in mind that no attribution model will provide a perfect picture, the importance of different methods and strategies likely differs even from customer to customer. The point of the attribution model is to provide a quality estimation and summary that brands can use in their reporting and when planning new strategies.
This post and this companion one will explore the different types of attribution models, helping our community determine the one that will work best for them. In this post, we will discuss the main forms of one-touch attribution models and when they can be useful.
First-touch attribution model
The first-touch attribution model focuses on the touch that first introduced the new customer to the brand. For example, in the example offered previously, with the customer that found the brand organically, then clicked on email links, and then watched the webinar before converting, only the organic search will receive credit for the customer and the revenue generated.
This model works on the assumption that the strategy that first brought the customer to the brand delivered the most value, and thus deserves the credit. This strategy can be a good one for brands that want to see how well their outreach, top-of-funnel efforts generate profitable prospects. It does not, however, give any insight into how well prospects are nurtured when going through the funnel.
The first-touch attribution model will likely be most helpful for brands that have a short buying cycle. For example, some types of ecommerce stores that have customers who tend to buy quickly and not spend too much time researching or engaging before buying will may find this helpful.
Brands might also find it helpful to use this model if they need to build a case for the ROI for their top-of-funnel activities. For example, if your organic team needs to create a presentation for brand leaders or shareholders and you want to show the strong value of SEO, demonstrating the value of your awareness efforts will bolster the points you make.
Last-touch attribution models
Last-touch attribution models work opposite to the first-touch model. This model measures only the last touch a customer had with the brand before they end up converting. The idea behind this attribution method is that the last channel a customer interacted with is the one that convinced them to convert and should thus receive credit.
Since this attribution model focuses on the last interaction a customer had before they purchased, it is a good means of measuring the end-of-funnel activities. On the other hand, you will not receive any insight regarding what first made the customer aware of the brand or how they were nurtured throughout the funnel before they ended up converting.
This is a conservative approach and emphasizes the importance of the brand. Many organizations do find it helpful to know what ended up giving people the final push to convert, and this does help shape their strategies moving forward.
This attribution model also ends up being the simplest to measure and implement. This makes it a good starting point for brands that have not done much marketing tracking the past.
In addition to the standard last touch attribution, which looks at the very last interaction people have with the organization before they buy, there is one key variation: the last non-direct touch.
Last non-direct click: a variation of the last-touch attribution model
The last non-direct touch follows a similar format to the last direct touch, but it eliminates any touches that originate with the customer going directly to the website. In other words, if the last interaction the customer has with the brand involves them typing in your company’s web address and navigating directly to the site, this touch will not be counted. This system operates on the assumption that if your customer already knows your web address, all the hard work of attracting them and nurturing them has already been completed. Tracking this touch does not give much insight into how people learned about your brand, and therefore does not provide much information that can be used to build a strategy moving forward.
The last non-direct touch attribution model, therefore, offers much of the simplicity of the last touch model, while eliminating at least one of its shortcomings. It therefore offers greater insight than the standard model.
Identifying the best attribution model can help brands better understand how their revenue has been generated and what they need to know to build a better strategy moving forward. Consider how these two models might serve your organization, and read our next post where we will explore the other major attribution models to help you make the best decision for your organization.