• Blog
  • Feb 08, 2021
  • By Cam Sivesind
Types of Attribution Models and How to Use Them

Any business worth its salt will leverage the tools available to improve its performance. The market is too competitive to do anything less. In the modern-day of business transactions, conversions are everything when it comes to landing your next sale. Customers may click on your blog post, email newsletter, or targeted ad to visit your site. But which link converted that person to your site? This is the million-dollar question, but that’s why attribution models are essential.

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What Are Attribution Models?

Attribution models are the mechanisms that deliver insight regarding the engagements, or touchpoints, that encourage a person to respond to an ad or other marketing stimuli. There are various models marketers can use depending on their business model, and the journey prospects take to become customers. Using any of the available attribution models, marketers can determine the ROI associated with each marketing channel and determine whether more resources should be assigned to one channel over another.

Marketers typically run multiple campaigns across multiple channels. While this is the norm, it does present a bit of a challenge when attempting to identify which channels had the most significant impact leading to the final sale. This is why marketing attribution and modeling can help marketers identify the impact those specific channels and touchpoints contributed to the conversion. Each attribution model is different in terms of assigning different weights to different touchpoints throughout the buying journey. Not every attribution is suitable for every type of business or marketing strategy. Marketers must determine the ideal attribution model for their specific situation.

Types of Attribution Models

Because different approaches are suitable for numerous companies in various industries, there are different types of attribution models. Models can be categorized as single-touch or multi-touch.

A single-touch model describes a single touchpoint where the engagement given credit for the sale is the first interaction a buyer will have with the company’s marketing campaign. The multi-touch attribution model features multiple engagements where varying degrees of credit are assigned to a variety of touchpoints leading to a final sale, whether the attribution derives from a Facebook ad or a radio commercial.

Whichever attribution model you choose for your marketing approach, it’s best to ensure it falls in line with how your company engages prospects, your company’s marketing objectives, and how your marketing campaigns leverage different channels.

Single-touch attribution models include:

  • first interaction attribution, where the first touchpoint receives the credit for the sale,
  • last interaction attribution, where the last touchpoint gets the credit.

Multi-touch attribution models include:

  • Linear attribution, allowing each interaction to receive an equal amount of credit for the sale
  • Time Decay, allowing those interactions closer to the sale to receive most of the credit
  • Position Based, or the U-shaped, model shows the first and last interactions receiving most of the sales credit
  • Last Non-Direct Click model highlights the last click that is not a result of direct traffic leading to a website visit and credit for the sale.

Single-touch models

Single-touch attribution models give credit to a single touchpoint along the customer journey. It can either be the first interaction or the last interaction.

First Interaction attribution. This model assigns credit to the first interaction a prospect may have with your company, whether online, at a trade show or some other engagement.

The first touchpoint is the one that drives the sale and receives 100% of the sales credit. This model also highlights the engagement at the top of the funnel that provides awareness and sets the stage for every other activity along the buying journey. While this simplifies the attribution process, using this model can also overlook additional touchpoints that may occur along the buying journey and contribute significantly to the final sale.

Last Interaction attribution. The last interaction model consists of a single-touch model where 100% of the credit for the buying decision is attributed to the last click (or interaction) prior to the conversion. Similar to the first interaction model, the last interaction model provides a simplified methodology that attributes all credit to perhaps the most critical touchpoint in a customer’s journey. Also, as is the case with the first interaction model, the last interaction model may overlook other significant interactions the customer may have that influences their decision to buy.

These single-touch attribution models are more manageable for marketers to implement and can provide reasonably consistent reporting regarding an engagement’s success or failure. As we stated earlier, there may be other valuable interactions that are not identified and, therefore, not invested in when using a single-touch model.

Multi-touch models

  • Linear approach. The linear attribution model may be the most democratic approach of all. Equal credit is given to all touchpoints, regardless of where they sit in the sequence or how much impact they had during the buying journey.

If there are five touchpoints during the journey, they will each receive 20% of the credit for the sale. This approach can help ensure that there are no engagements that are dismissed as unimportant. The other side of that coin is that the touchpoint that may be the most important does not stand out and, therefore, may not receive the attention and resources it deserves.

  • Time Decay. Attributing more credit to those touchpoints closer to the conversion is the hallmark of the time decay attribution model. While an initial touchpoint may receive 10% of the credit, the last two or three touchpoints might receive 30% or 40%, respectively. The logic behind this approach is that the drive toward making a purchase builds momentum as the sale approaches. The journey begins with interest concerning the first touchpoint and ends with a clear decision when there is a final interaction.

Momentum makes sense for many companies in specific industries, but this approach can also miss the importance of those first touchpoints. If initial engagements near the beginning of the funnel have more impact, then focusing only on engagement at the end of the journey can miss valuable opportunities earlier in the process.

  • Position-Based. The position-based attribution model, also referred to as the U-shaped model, gives credit for the sale to the first touchpoint and the last touchpoint. The first and last touchpoints each receive 40% of the credit while the remaining interactions receive the remaining 20%, divided equally.

This approach views the first and last touchpoints as critically important to driving sales and attributes more than a single interaction for the journey’s success while maintaining its simplicity. Although simple, the position-based model still has drawbacks, such as possibly assigning attribution to touchpoints that may have had little to do with a customer’s final decision.

  • Last Non-direct Click. When the attribution model provides all buying credit to the customer’s last non-direct engagement, this is considered the last non-direct click attribution model. It also is derived from the non-direct traffic to your website, including social media posts, email campaigns, influencer marketing campaigns, and more.

This model still assigns 100% of the sales credit to the last click of our touchpoint. Because it’s based on non-direct interactions, the non-direct click model removes any possible engagements that might happen just before conversion.

This approach can be very beneficial, as it may identify marketing efforts that prompted someone to visit your site, eventually leading to a sale. The disadvantage in this approach is the overlooking of other engagements that may have led to someone visiting your site.

Which attribution model is best for your company?

As you can see, there are many attribution models organizations can choose from. The key is to determine which model fits your organization, your mix of campaigns, and the channels used in those campaigns.

It does not make sense to incorporate a multi-touch model when a single campaign and a single channel make up most of your marketing activities. In the same respect, incorporating a single-touch model doesn’t fit with longer sales cycles where there is a great deal of interaction. This is especially true when your company’s marketing efforts consist of engaging prospects across multiple channels and campaigns over a long period.

Whether you choose a single-touch or multi-touch attribution model, make sure it fits with your particular environment and set of objectives while also accurately assigning responsibility to the sale.