In light of AI marketing, the consumer journey has become much more complicated than before. Buyers now come from different channels and do thorough research on various brands before buying a product.
It is precisely for this reason that marketing attribution can be very useful in finding out where traffic and conversions are coming from.
For businesses who wish to boost their return on investment, marketing attribution can help identify which marketing activities and/or website features contribute to conversions.
What Is Marketing Attribution?
Marketing attribution is a process that determines which marketing efforts lead to conversions. More specifically, it points to a specific marketing channel or a campaign and credits it with either a sign-up or a purchase.
The process is made up of a research phase that collects customer data and an attribution phase where credit is applied to each customer journey “touchpoint.”
It shows how prospects engage with a brand online and what ultimately influences their purchasing decisions.
The outcome of using marketing attribution is better campaign measurement and ROI tracking, since the process can improve campaigns and optimize budget allocation toward the marketing work that generates the best results.
Given the complexity of customer journeys, especially for B2B businesses, marketing attribution can eliminate guesswork regarding what’s working and improve overall marketing outcomes.
How Marketing Attribution Is Conducted
The process is simply made by tracking different prospect touchpoints to see which ones led to conversions. These touch-points could be characterized by any interaction between your prospect and your marketing, such as ad clicks or email opens.
The next step would usually involve collecting all the data from various marketing platforms and constructing a customer journey map that brings your customer’s online experience to life.
Once this is in place, the attribution model is then applied in order to get clarity on how much weight each touchpoint has for influencing a sale. This knowledge then helps businesses understand where to allocate their marketing spend for the best sales outcomes.
AI attribution models are now becoming very sophisticated in looking through vast sets of data and analyzing hundreds of customer journeys to uncover the weight (mostly a percentage) of influence each marketing channel has.
However, not all marketing attribution models work the same way due to how they assign credit to customer touchpoints.
Let’s look at the different types of models marketers use today and discuss the key advantages and differences.
Common Attribution Models Marketers Use Today
First-Touch and Last-Touch Attribution
The first-touch and last-touch attribution models are designed to provide all credit to either the first or the last customer interaction that leads to interest.
For example, the first-touch attribution places importance on the interactions that prospects have with a brand that lead to more awareness of their products and services.
This could play out as a situation where an individual connects with a brand through social media or visits its website via a social media channel.
In comparison, last touch attribution places emphasis on the last consumer contact point before purchase to find out which marketing channel made the sale possible.
If, for example, the prospect gets a discounted email offer and purchases through it, the success is attributed only to the email marketing campaign.
The benefit of these models is that they are easy to understand and provide quick insights into customer behavior that leads to awareness and conversions.
However, the models lack a full picture of customers’ interaction with a brand and radically oversimplify the customer journey, which may miss important data that could influence future marketing outcomes.
Multi-Touch Attribution
Where first-touch and last-touch attributions fall short, multi-touch attribution delivers by distributing credit evenly throughout the customer journey.
It gives a more comprehensive overview of how customers engage with a business by analyzing every interaction that takes place through organic search, social media, paid advertisements, email marketing, and so on.
In addition, the more detailed look at the customer journey allows companies to know how well each marketing channel works and whether or not some should be prioritized over others.
But while this model is more precise compared to the first and last touch models, its implementation process is much harder.
AI-Driven Attribution
Machine learning algorithms are used in AI attribution models to analyze the large volume of customer data that is gathered.
Since artificial intelligence can work with infinite amounts of data and attribute value to patterns which even the best marketers fail to see, it will be more accurate in measuring performance and giving credit where it counts.
AI can help with better campaign measurement and more accurate ROI tracking in a fraction of the time that it takes professionals. However, just like any advanced technology, AI is harder to implement and requires high-quality data to be effective.
For larger businesses that require this level of expertise, AI attribution models are well recommended!
Why AI Marketing Has Changed Attribution
The introduction of AI has not only changed how marketing is done but also how customers interact with businesses online. For one, AI marketing has introduced more platforms, such as chatbots, where customers can engage, widening the potential for attribution.
Overall, the shift to AI marketing is expanding how businesses interact with their ideal customers but also requires more advanced measurement approaches to understand its influence on customer conversions.
However, if done well, AI can help make attribution marketing more accurate and reduce marketing costs over time.
Picking the Right Attribution Model for Your Business
There is truly no “best” attribution model for every business, and the one that would be most fitting depends on many factors, such as the business model or the nature of the sales cycle.
The following are some of our recommendations on which attribution model is the most fitting for your business type:
E-commerce
Since e-commerce businesses have very short sales cycles, multi-touch attribution would make the most sense for them. Their customers usually go through many marketing touchpoints before they make a purchase, so understanding their purchasing behavior on multiple platforms is key.
B2B
Businesses that sell to other businesses usually have the longest sales cycles involving multiple decision-makers, making it a complex process that is best suited for the multi-touch attribution model.
This model evaluates all the marketing channels that influence a purchase and narrows in on the most important ones.
Because B2B buyer relationships are long and involve big investments on buyers’ part, being aware of the key points that lead to final decision-making in the buyer journey is essential.
Consultancies and Agencies
For consultancies, it is important to understand what drives initial interest (first-touch attribution model) and how this interest leads to prospect inquiries (multi-touch attribution model).
Once consultants understand where to direct their energy to drive leads, knowing which channels to use to nurture them further for sales will help them save energy from trying to be everywhere at once.
SaaS
Tech and SaaS companies can experience most benefits from the AI attribution model because, like B2B businesses, their sales cycles are long and complex.
To understand how users behave and which touchpoints help them make a decision, data collected and analyzed by AI can simplify the process in a way that makes sense to companies that often rely on AI assistance for decision-making.
Local and Small Businesses
For businesses with simpler customer journeys, a first-touch or last-touch attribution model can provide enough clarity and easy adoption.
However, once a business grows and expands its marketing and online presence, a multi-touch attribution model would be more fitting, as it can more easily showcase the source of most conversions.
Choosing the right model at the right stage is key for small businesses, since accuracy leads to a greater ROI and less wasted spending.
Marketing Attribution Services
If you would like to use a marketing attribution model as part of your online marketing strategy but need help in taking the right steps to implement it, our CloudMellow team of experts can help!
Get in touch today to get more clarity on how we can map out your customer journey and improve your ROI tracking to drive greater revenue online.