Attribution modeling is the setting up of rules to determine how to assign credit for a sale to particular touchpoints along the conversion path.
The process the helps marketers to understand and assign the credit to the specific channels that lead to a conversion. In so doing, the company understands the buying behavior of the customers who visit the website and hence determine the most effective touchpoints or marketing channels.
Most of the touchpoints receive 100% credit but there are other instances where they share the credit according to their contribution towards the sale.
For example, in a last interaction attribution model, the direct channel touchpoint receives 100% credit for the sale and so would a first Interaction attribution model resulting from a paid search.
On the other hand, each of the touchpoints on the conversion path in a linear attribution model shares the credit equally. For instance, if there is a paid search, email, direct and social network channels, each of these will get 25% credit for every sale.
The attribution modeling allows organizations to establish the touchpoint that converts most and hence know where to invest more.