Advertising is a huge part of any business, but this is especially the case when it comes to e-commerce websites. It is how you reach your potential customers and drive-up traffic for your website, so obviously it is good to learn about! What about attribution, though?
Well, to understand this, you do need to have some background knowledge on concepts like conversions. If you need some more details, check out this page – hopefully it will help you get a handle on it before you learn more about the main topic of this article. Otherwise, stick around, and I will provide some more information!
Attribution Theory
Before I dig further into how this is applied to business, let me explain the basis for this first. We can trace it back to attribution theory in psychology. It can be defined as the way that people perceive any causes for occurrences that happen in their everyday lives. So, part of it is whether they consider what is happening to them to be caused by internal factors or external ones (regardless of the truth of the situation).
There are obviously a lot of biases that occur in that thought process. You might be wondering how this is relevant to modern day marketing techniques. I will explain.
What is the Purpose of This?
One of the biggest reasons that companies do this, is to try to figure out what instances a potential customer perceives that eventually results in them taking a desirable action. In marketing this is known as a conversion. Businesses should seek to find out the circumstances in which potentials turn into conversions, as the desired action tends to be purchasing a product.
Now, that is not the only type, though. It could also be for signing up for a newsletter or email list. Either way, you should keep this in mind as you consider options for tracking this data.
The Different Models
Now, no matter which model you decide to utilize, there are different options for ad attribution software – so, keep your mind open to the different types! All of this is based on some of the new types of advertising campaigns such as pay per click (calculated with cost per click models) and more. Just bear that in mind as I cover them, as some of the older advertisement types may not line up with this exactly.
Customer Driven Attribution
In this model, the data is collected by a zero-party. It is then taken and applied to projective analytics, which allows us to look at the bigger picture. The main factor here is that calculations are made with the largest weight being attributed to customer opinions and feelings rather than anything else.
Fractional Attribution
This method is characterized by applying equal weight to all of the different factors that could have influenced the conversion process. So, that could be things like time decay or customer credit. It is a bit complex, so I recommend checkout resources like this one if you are uncertain about it but want to try it: https://support.google.com/google-ads/answer/6259715?hl=en.
Single Touch Attribution
While these models can be quite helpful, I do think there are some inherent flaws or limitations with them in that they only give credit to one of the sources of the conversion goal, rather than taking a holistic approach. However, that can be effective, so when you decide how to handle your models, that will be something for you to consider.
In the first touch version of this, essentially the model gives credit to the first thing that a potential consumer interacted with as the factor that converted them. Obviously, this is an overly simplistic approach that most businesses do not take.
Last touch is very similar to the former one, except it essentially credits the opposite interaction – the final one before a customer’s action becomes a conversion. For the most part, most marketing teams do not rely on these types of models. However, they are a good way to learn more about the concept as a whole as they are not overly complicated or too difficult to understand.
Multi Touch Attribution
This is the type that most marketing departments and businesses prefer, as opposed to a snapshot of sorts regarding customer motivations, it provides a more extended view of their journey along a sales funnel. If you have not heard that term before, I would highly suggest you get familiar with it – it is a driving force behind most ad campaigns today and will help you with attribution as well.
In general, these models take a three-pronged approach. First, they take a look at what initiated the first contact a prospect has with your brand. That is usually known as the awareness stage in a sales or marketing funnel. From there, they track what garners their interest. Finally, they try to determine what turned their interaction into the desired action.
As you can probably imagine, there are a few different methods within this overarching umbrella. The first is called linear, and it is probably the simplest out of all of them (but that does not mean the most effective). Similar to one of the ones I mentioned above, it gives equal credit to each stage in an interaction to attempt to locate the source of the conversion.
Next is the time decay way of looking at attribution. Essentially, these credit the more recent interactions more than the initial ones in terms of what lands the sale. Again, it is fairly simple to understand.
Is All of this Worth it?
Now that I have offered you a lot of different information on this topic, you might be asking yourself whether it even matters. Well, in terms of increasing the number of conversions, if you can figure out what those initial ones can be attributed to you can do your best to replicate it. That is why so many businesses are trying to capitalize on this ideology!
