- Mar 16, 2023
A strong attribution model is a data-driven approach to understanding the customer journey and how different marketing channels and tactics contribute to the overall conversion or sale. It is designed to provide marketers with insights into which channels and tactics are most effective at driving conversions and revenue.
A robust model should consider all touchpoints in the customer journey – impartial multi-touch attribution – including first touch, last touch, and all touches in between. It should also take into account the various channels and tactics used to reach customers, such as email, social media, paid search, and display advertising.
A strong approach to attribution should be based on accurate and reliable data, such as customer behavior data, campaign performance data, and revenue data. It should also be flexible enough to adapt to changes in customer behavior, marketing tactics, and technology.
Robust models should be actionable, providing marketers with insights that they can use to optimize their campaigns and allocate resources effectively. It should be able to answer questions such as which channels are driving the most conversions, which touchpoints are most influential in the customer journey, and how changes in marketing tactics are affecting conversion rates.
Strong Attribution Provides Data-Driven Performance
Here are some reasons why a strong attribution model is essential for marketing:
- Understand marketing effectiveness: Attribution models help marketers understand which marketing channels and tactics are driving the most conversions, and which ones are not. This information is crucial for making data-driven decisions about where to invest marketing resources and budget. Attribution helps to answer questions such as:
- Which marketing channels are most effective at driving conversions and revenue?
- How do different marketing touchpoints contribute to the customer journey?
- How do changes in marketing tactics affect conversion rates?
- Optimize marketing campaigns: By knowing which channels and tactics are driving the most conversions, marketers can optimize their campaigns for maximum return on ad spend (ROAS). They can adjust bids, ad placements, and targeting strategies to improve campaign performance. Attribution helps:
- Identify the most effective marketing channels: Identify the marketing channels that are driving the most conversions and revenue. By focusing on these channels, marketers can optimize their campaigns for maximum impact.
- Optimize spend: Attribution can help marketers allocate their budgets more effectively. By understanding which channels and tactics are driving the most conversions, they can adjust their spending accordingly to maximize ROAS.
- Identify gaps in the customer journey: Identify gaps in the customer journey where customers may be dropping out or losing interest. By identifying these gaps, marketers can optimize the customer journey to improve the likelihood of conversion.
- Optimize messaging and targeting: Identify the messaging and targeting strategies that are most effective at driving conversions. Marketers can use this information to optimize their messaging and targeting to increase conversion rates.
- Test and optimize: Attribution modeling can provide insights into which marketing tactics are working and which are not. This information can be used to test and optimize different marketing strategies to improve campaign performance.
- Allocate budget effectively: Attribution models help marketers allocate their budgets effectively across various marketing channels and tactics. They can use the insights gained from attribution modeling to allocate resources to the channels that are driving the most conversions and revenue. See the sub-bullets above as they apply here, too.
- Improve customer experience: With attribution, marketers understand the customer journey and identify areas where the experience can be improved. This information can be used to make changes to the customer experience that can lead to more conversions and revenue. Attribution can improve the customer experience in several ways:
- Personalization: Identify the touchpoints that are most influential in the customer journey. This information can be used to personalize the customer experience and provide tailored messaging and offers based on their behavior and preferences.
- Seamless experience: Identify gaps in the customer journey where customers may be dropping out or losing interest. By optimizing these touchpoints, marketers can create a seamless and intuitive customer experience that encourages conversion.
- Relevant messaging: Identify the messaging and targeting strategies that are most effective at driving conversions. By using this information to tailor messaging and targeting, marketers can provide more relevant and engaging communications that improve the customer experience.
- Consistency: Ensure that the customer experience is consistent across all touchpoints and channels. By optimizing the customer journey and ensuring that messaging and branding are consistent, marketers can build trust and credibility with customers, leading to a better overall experience.
- Improve product offerings: Attribution can provide insights into customer behavior and preferences, helping marketers to identify areas for improvement in their product offerings. By using this information to develop new products or improve existing ones, marketers can provide a better customer experience and increase customer loyalty.
- Measure and report ROAS: Attribution provides a way to measure the ROAS of marketing campaigns accurately. This information is crucial for reporting to stakeholders and making data-driven decisions about future marketing investments.
Defining ROAS – Better Than ROI
ROAS is calculated by looking at the cost of an advertising grouping compared to the revenue received from conversions attributed to this grouping. Here’s an example:
Let’s say a company spends $10,000 on a digital advertising campaign and generates $50,000 in revenue from that campaign. To calculate the ROAS, you would divide the revenue generated by the cost of the campaign:
ROAS = Revenue / Cost of Campaign
ROAS = $50,000 / $10,000
ROAS = 5
In this example, the ROAS is 5, which means that for every dollar spent on the campaign, the company generated $5 in revenue. A ROAS of 5 is generally considered to be a good return on investment for a digital advertising campaign.
Marketers can use ROAS to measure the effectiveness of different advertising campaigns and channels and use this information to optimize their advertising spend to maximize revenue. By monitoring ROAS over time, marketers can also identify trends in customer behavior and adjust their advertising strategies accordingly.
To learn more about attribution, multi-touch attribution, and attribution modeling, download the free Attribution Guide to 2023 then contact LeadsRx for a free brief demo.