Is Your Business Using the Right Marketing Model?

Overview

Today’s digital marketing landscape is rapidly changing and there are many marketing teams that are being placed at a disadvantage to their competitors simply by the fact that they are still employing modeling techniques that are no longer providing the level of detail or insight needed to be successful. There have been great strides made in the fields of data science and analytics that can be applied to measuring the performance of your marketing campaigns which will provide stakeholders and decision-makers with greater insights into their marketing strategies. Improved methodologies exist that allow businesses to leverage their customer data in a way that can improve their marketing efforts and increase efficiency for their organization.

Adopting a new attribution model can help transform your business by allowing you to achieve new insights into the customer journey and better allocate your marketing team’s resources towards the goals of customer conversions and revenue growth.

The Current Model: Last Click Attribution

The most widely used method employed by many marketing teams is called a “last-click” attribution model. The reason it is not advantageous to use is because it assigns all the success of your marketing efforts to the very last event a user clicks on prior to making a purchase. This is counter-intuitive because most firms deploy their marketing budgets across a variety of sources/mediums and most users may visit a website or interact with different ads a few times before a successful conversion ever occurs.

The main problem with implementing a last-click attribution model is that ignoring the role that other marketing channels played in the customer journey biases the measurements of your marketing campaigns toward lower-funnel channels and campaigns. This can produce unreliable metrics that may lead your marketing team in the wrong direction. Relying on a last-click attribution model can also cause decision-makers to increase spending in channels that are not actually leading to incremental conversions but are only the most recent interaction a customer had with the business. Instead, firms should be seeking to uncover the true role that each marketing channel played in affecting the customer’s behavior prior to conversion rather than giving all the credit to the very last interaction.

A Better Approach: Multi-Touch Attribution

There exists a superior method for attributing value to marketing campaigns which is called the “multi-touch” attribution model and it works by assigning different weights to the various touchpoints that users have during their customer journey. This allows businesses to easily identify the channels and campaigns that are driving conversions and to craft a successful marketing strategy based on these insights. The ability to identify which campaigns and advertising platforms are truly driving customer conversions allows businesses to budget their marketing efforts appropriately and target their spending more accurately towards the platforms that are driving customer conversions. Optimizations based on this analysis can help increase advertising ROAS through increased campaign measurement accuracy and efficiency gains.

Variations of the Multi-Touch Attribution Model:

There are many ways of implementing multi-touch attribution models that can provide additional value for marketing teams trying to evaluate the success of their campaigns that are more desirable than the traditional last-click model. Which model your team chooses to utilize will depend on a variety of factors including, but not limited to, what technical skillsets are available to your organization, ease of implementation, or even knowledge of what is possible. The following is not an exhaustive list of multi-touch attribution approaches but highlights some of the key characteristics of a few of the more common models.

1. The most advanced version of the multi-touch attribution model is known as “fractional attribution,” which uses machine learning to calculate and assign fractional credit for a given success metric to the most influential marketing channels along the customer journey. A major benefit is that it can help eliminate some of the biases found in other modeling techniques or attribution methods which can occur due to either human biases during creation or from the exclusion of other variables that influence consumer decision making.
2. Another popular variation is the “time decay” attribution model which weights conversion credit towards the most recent ad interaction, but still gives some credit towards prior interactions at a lower amount the further back in time they occurred. For example, a customer interaction the day before a conversion or purchase is weighted twice as much as an interaction that happened over a week before.
3. Another variation is the “position based” attribution model which typically gives the first and last ad interactions an equal 40% of the credit before distributing the remaining 20% across the other remaining channels. This is colloquially known as the “U-shaped” model, but it is important to note that marketing teams are free to customize and distribute the weighting towards the channels that they believe are most important in customer conversions in whatever amount they feel is correct using this method.

While each of these modeling methodologies would be preferable to the “last-click” model, only the fractional attribution model provides the precise measurements and deeper insights into the customer journey that are available through the implementation of the “multi-touch” model. It is important to consider whether your organization’s attribution model is meeting the needs of the business. If not, changing attribution models should be a top priority.

The biggest hurdles preventing organizations from implementing a multi-touch attribution model in their marketing efforts are a lack of data availability and issues with data collection and analysis platforms. This is a prime reason why leading companies turn to Softcrylic for consulting advice. We believe in helping organizations turn data chaos into business clarity and action by assisting with enacting solutions like multi-touch attribution modeling that can provide additional value for your marketing team. By working in partnership with our clients to help transform their existing data into powerful tools like the ones mentioned in this article, we help leverage data to provide meaningful insights – and can do the same for your organization, helping you drive your marketing campaigns towards success. Implementing a multi-touch attribution model will help capture, measure, activate, predict trends and deliver results to solve the ongoing challenge of running your business and marketing campaigns in a data-driven manner. If you have any questions or would like a consultation on any of the solutions discussed above, please feel free to get in touch with us by email: info@softcrylic.com.