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 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.
The attribution modeling allows organizations to establish the touchpoint that converts most, hence understand where to invest or increase future budget allocations.
In some models, a single touchpoint may 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. Please see more details below.
Types of attribution modeling
There are different attribution models and below are some of the most common.
- Last-click attribution. where credit goes to the last touchpoint for the customer before converting. This does not pay attention to the customer’s journey neither the marketing channel.
- First-click attribution. This is the opposite of las-click attribution because it credits the first action that a customer takes when stating their conversion journey while ignoring other engagements teh customer has along teh way.
- Linear attribution. Gives equal credit each of the touchpoints along the user’s conversion path.
- Time decay attribution Gives credit to each touchpoint but more to those events closer in time to the conversion. In this model, the touchpoint the user touched initially gets the least while that closer to the purchase gets more.
- U-shaped attribution This model distributes the credit throughout the path but gives the first and last touchpoints more credit while the others in between get an equal share of what remains. For example, Google analytics gives the first and last 40% each while the middle engagements share the remaining 20 % equally.