This article aims to serve as a guide for small and midsized enterprises (SMEs) looking to learn more about the various types of marketing attribution models and the one which can best meet their marketing needs.
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The Indian market landscape is probably a competitive one, with brands trying to attract the attention of customers using various ways and channels. For brands, it is important to determine not just when the purchase was made but also what caused that purchase. One of the ways to do that is through the use of the marketing attribution model, which we will learn more about in this article. Let us first understand what a marketing attribution model is.
What is a marketing attribution model?
A marketing attribution model is a technique or a framework that helps marketers identify the touchpoints that help turn a prospective client into a paying one. According to Google, ‘an attribution model is the rule, or set of rules, that determines how credit for sales and conversions is assigned to touchpoints in conversion paths.’
In simple words, the marketing attribution model assigns weightage (or credit) to various steps involved in the conversion journey (or touchpoints) so that marketers can identify the strategies which work the best for the business and boost conversions as a result. This may also help remove the guesswork and bring in more concrete results for both sales and marketing teams.
Companies may use attribution modelling to boost the proportion of paying clients, customise marketing campaigns for various clients, boost returns on investments and hone their marketing tactics to suit their needs. We will learn more about the benefits of the digital marketing attribution model in detail later in the article.
What are the different types of attribution models?
Here is a list of the top five types of marketing attribution models marketers can use to gauge the performance of their marketing initiatives.
1. First-touch attribution model
As the name suggests, this approach gives the user's initial touchpoint credit for an advertising encounter. This is to say that full credit is assigned to the first point of contact a customer has with a channel or marketing activity. The first-touch model can help businesses understand which channel is bringing them the most brand awareness.
2. Last-touch attribution model
With last-touch attribution, the final touchpoint a customer engages with before completing a purchase receives complete attribution credit without taking into consideration earlier interactions. Businesses can determine which marketing initiatives result in sales for their business using the last-touch model.
3. Linear attribution model
Under this paradigm, each touchpoint along a conversion route or customer journey is given an equal share of the credit. For example, if a customer comes across an advertisement on four different social media channels, each would be assigned a 25% credit. This model can offer a more comprehensive overview to the marketers to evaluate their buyer's journey.
4. U-shaped attribution model
In this model, the initial interaction receives 40% of the credit, while the encounter that initiated a contact receives 40%. The remaining 20% is then distributed equally among all interactions that take place between the first interaction and lead creation.
5. Time decay attribution model
In this type of attribution model, the most recent interactions are given greater weightage. This approach assumes that the touchpoints that were used closer to the conversion had a bigger influence on the sale than those that were used earlier.
What are the benefits of marketing attribution for SMEs?
Having an attribution model in digital marketing can offer many benefits to businesses. Without marketing attribution software, they may be able to inspect the source which is getting them the most traffic and make investments accordingly. In this section, we will discuss various benefits offered by the marketing attribution models to businesses.
1. Increased awareness around marketing initiatives
By getting an idea of which channels and touchpoints are generating more traffic and engagement from customers, businesses can tailor their marketing campaigns accordingly and allocate budgets appropriately.
2. Increased return on investments
Having an efficient attribution model can help marketers to communicate with the appropriate customer at the right time, increasing conversions and thus increasing marketing return on investment (ROI).
3. Better understanding of customer behaviour
Every business possibly aspires to get a better understanding of their customers and their behaviours. Marketing attribution model can help marketers achieve this by giving them more insights into what is attracting their customers the most towards their business.
How can SMEs find the right attribution model for their business?
Attribution can become increasingly important for bringing your whole marketing team together around a single objective of revenue creation. Finding the model that suits you best could be difficult to determine with so many attribution models in digital marketing and marketing touchpoints available.
Having said that, there is no one-size-fits-all strategy or generic marketing attribution methodology that will be effective for each individual or campaign. Marketers and sales teams would possibly have to determine business priorities, allocate budgets, define campaign goals and estimate available resources before they decide which model they would like to pursue and implement. With time and some trial and error, businesses can potentially get an idea of what works best for them and what doesn't. They may even change attribution models as their business expands and evolves rather than stick with just one throughout.