Attribution, what exactly is it?

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

An Introduction to Attribution and the Various Models

Alongside traditional offline measures, an increasing number of users want to learn about their favorite brand online. For this reason, more and more companies need to balance and manage marketing efforts both offline and online. Through these and other measures, high visibility should be achieved, but how can this be done without spending too much budget on inefficient marketing measures?

For companies to conduct more precise budget planning for their marketing activities, there are attribution models. These help depict user behavior and assign each marketing channel its own monetary value based on its share of success. Examples of attribution models are:

Attribution Model Used Click for AttributionLast ClickThe last click receives 100% of the monetary share.First ClickThe first click receives 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 value.Position-BasedThe first and last channel are weighted higher and all other channels in the middle lower. Typically, the rule is: 40:20:40.CustomIndividual channels are weighted differently (e.g., based on position, time dependency, traffic, etc.) and compensated accordingly.Data DrivenBased on an algorithm that calculates the probability of conversion, 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, for example, through coupon codes.

• TV: In TV spots, special landing pages can be promoted, which are then captured via web analysis to consider them in attribution. It is also possible to input the airtimes of commercials from TV stations directly into web analysis software.

• Phone: Phone tracking can immediately register phone calls in the web analysis software. Different phone numbers are displayed to callers at contact points, which are then registered accordingly.

The Benefits of Attribution

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

• Within individual channels

• Across individual channels

• Between online and offline

• Across individual devices

Since customers should have constant 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 identify which channels have the most influence on customers. This analysis 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 the Touchpoints of the Customer Journey

At what point in the purchasing decision process is which channel relevant can be measured using common analysis tools like Google Analytics Universal. By default, a distinction is made between paid search, organic search, direct visits to the website, referrals via 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 took place.

Which contact is most important for the respective company cannot be generalized, as previously explained. Not only the last touchpoint that led to the conversion can be relevant, but also the previous ones can have an important share in the purchasing decision. For example, if the company works with coupons, the last channel might merely be the accessing of a coupon site, after the user has already made their purchasing decision. In this case, the last click on the coupon site would be rated as less relevant.

For an attribution model, it should fundamentally be analyzed which channels are more preparatory and which channels ultimately led to the conversion, to then decide how each channel should be used and budgeted. It is important to identify trends.

Screenshot: Google Analytics, Comparison of Preparatory and Final Conversions – 25.06.2014

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

Screenshot: Google Analytics, Comparison of Conversions by Attribution Model – 25.06.2014

Channels and Other Influencing Factors

As can be seen from the following graphic, users interact with individual channels at very different times. Furthermore, this also varies from industry to industry. Therefore, an attribution model cannot simply be transferred from one website to another. For some websites, the first customer contact is the focus, for others, the last, and for yet others, it always varies. Here is an example of the general attribution of the automotive industry in Germany:

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

What Can We Do for You?

If you would like to learn more about attribution models or want more detailed information on web analysis, do not hesitate to contact us. We would be happy to advise you and support you in optimizing your marketing measures.