Attribution, what exactly is it?

Even John Wanamaker said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
To solve this problem, companies use attribution models in online marketing. With these models, they can determine which marketing channels are important for the company and how they should be weighted relative to the other channels. Based on this weighting, the marketing budget is optimized. Companies can choose from various attribution models and even develop their own.

An Introduction to Attribution and the Different Models

In addition to traditional offline measures, an increasing number of users want to keep up with news about their favorite brand online. For this reason, more and more companies must balance managing marketing efforts both offline and online. These and other measures aim to achieve high visibility, but how can this be achieved without spending too much budget on inefficient marketing measures?

To enable companies to more precisely plan their marketing budgets, there are attribution models. These help to map user behavior and assign each marketing channel its own monetary value based on its success contribution. Examples of attribution models include:

Attribution ModelUsed Click for AttributionLast ClickThe last click gets 100% of the monetary share.First ClickThe first click gets 100% of the monetary share.LinearAll channels receive the same share, e.g., 5 channels = 20% / channel.Time DecayThe closer the click is to the conversion in terms of time, the higher its monetary share.Position-BasedThe first and last channels are rated higher, and all other channels in the middle are lower. The rule of thumb is usually: 40:20:40.CustomIndividual channels are weighted differently (e.g., based on position, time dependency, traffic, etc.) and rewarded accordingly.Data DrivenBased on an algorithm that calculates conversion probability, the monetary share is distributed.

Offline channels like flyers, TV, phone, etc., are included in various online channels through additional measures. Here are three examples:

• Flyers: Can be integrated into the online journey using coupon codes, for example.

• TV: Special landing pages can be advertised in TV spots, which are then captured via web analytics to be considered in attribution. It is also possible to directly integrate broadcast times of commercials from the TV stations into the web analytics software.

• Phone: Using phone tracking, phone calls can be immediately registered in the web analytics software. For this purpose, different phone numbers are displayed to callers at contact points and then recorded accordingly.

The Benefits of Attribution

This approach is particularly helpful for online shops because they face unique challenges. They must advertise on their website, on other partner sites on the internet, in offline media, and possibly also in local stores. Corresponding to these different channels, there are also various use cases for attribution:

• Within individual channels

• Across individual channels

• Between online and offline

• Across individual devices

Since customers should consistently have touchpoints with a company, whether in a store, on the company website, in search results, or on banners on third-party websites, it is important for the company to find out which channels influence customers the most. This investigation is conducted across all customers by identifying trends in user behavior. Based on these insights, the company can use a suitable attribution model and allocate the marketing budget to individual marketing channels.

Measuring and Properly Evaluating Customer Journey Touchpoints

At what point in the decision-making process each channel is relevant can be measured using common analytical tools such as Google Analytics Universal. By default, a distinction is made between paid search, organic search, direct website visits, referrals through affiliate marketing or backlinks, and emails.

It can be analyzed which channel made the first contact with the user, which channels further supported the user in their journey, and through which channel the conversion ultimately occurred.

Which contact is most important for a particular company cannot be generalized, as explained before. Not only the last touchpoint leading to conversion can be relevant, but also previous ones may have significantly contributed to the decision to purchase. For instance, if a company uses coupons, the last channel may merely be the call to a coupon page after the user has already made their purchasing decision. In this case, the last click via the coupon page would be considered less significant.

For an attribution model, one should generally analyze which channels are preparatory and which channels lead to the conversion to determine how each channel should be utilized and budgeted afterward. It is important to identify trends.

[caption id="attachment_13700" align="aligncenter" width="500"]

Screenshot: Google Analytics, Comparison of preparatory and final conversions – 25.06.2014[/caption]

The different touchpoints can be weighted according to further characteristics depending on the analysis tool and technical possibilities. Touchpoints, for example, can be evaluated based on the time between individual contacts. If there is only a short time between the first and second contact, the second contact was probably not particularly decisive. However, if a significant amount of time has passed between the second and third contact, the third contact seems very important because it brought the customer back to the site.

[caption id="attachment_13667" align="aligncenter" width="500"]

Screenshot: Google Analytics, Comparison of conversions according to the attribution model – 25.06.2014[/caption]

Channels and Other Influencing Factors

As the following graphic shows, users interact with individual channels at very different times. In addition, this also varies from industry to industry. An attribution model cannot, therefore, be easily transferred from one website to another. For some websites, the first customer contact is at the forefront, for others the last, and for others, it varies. Below is an example of the general attribution of the automotive industry in Germany:

[caption id="attachment_13643" align="aligncenter" width="500"]

Source: https://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html - 25.06.2014[/caption]

What Can We Do for You?

If you would like to learn more about attribution models or get more detailed information about web analytics, feel free to contact us. We are happy to advise you and support you in optimizing your marketing efforts.