To a marketing or sales professional, determining where lead generation dollars should be spent to maximize the return on investment can be the hardest part of the job. Not understanding what activities are working best, or even worse, what activities in what order are working best, can impact a company’s ability to drive lead generation effectively.
Multi-channel, multi-touch attribution refers to the allocation of marketing spend across different types of marketing in multiple sequences. Typical digital channels marketers refer to are:
· Display ads
· Blog posts
· Free white paper/eBook downloads
· Social posts
· Paid social advertisements
· Banner Ads
· Search Engine Marketing
· Video advertisements
There are a number of ways to allocate marketing spend associated with these activities that we will explore below, and understanding the best model relies on a deep understanding of the specific business and industry being evaluated. However, most attribution models are flawed in their evaluation of what matters. Below are 8 types of marketing attribution models to consider for your next marketing campaign.
Model #1 First Touch Attribution
This model gives 100% of the credit to the first activity that engaged a customer. The challenge with this model is that it views all activities after the first as irrelevant to outcome. This can mislead a marketing team to put too little focus on the follow up activities that are critical to delivering conversions.
Model #2 Last Touch Attribution
Conversely, this model attributes 100% of the credit to the last activity a customer engaged with. Similar to the previous model, this model pays too much credit to one activity that is consistently towards the end of the process and can lead to poor investment in future activities that may be earlier in the marketing journey, but also critical to customer conversion.
Model #3 Linear Attribution
The linear attribution model applies an equal amount of credit to each marketing function up until an opportunity is created. For example, if a prospect opened an email, then clicked an adword link, downloaded a blog, and finally filled out a form on a landing page – each activity would be given 25% of the credit for the conversion. This is the simplest of the multi-touch attribution models and has a few pros and cons.
The pro is that each marketing activity recognizes some credit for the conversion. The con is that those activities are not compensated appropriately based on their actual impact on the conversion.
Model #4 Time Decay
The time decay model gives more credit to the marketing activities closer to the conversion. This model assumes that the activities towards the end are more important than those earlier on. One of the challenges with this model is that, many times, an initial introduction to a brand or product can be critical to conversion and does not appropriately compensate top of the funnel activities.
When I was 10 years old there was a show on ABC called “The Mole” where contestants had to figure out who was a spy among them. In one episode, the contestants were tasked with choosing between a knock off watch and an authentic Cartier and had to destroy the fraud or pay for an expensive mistake. This was my first introduction to the brand and since then whenever I have thought about purchasing an expensive watch, Cartier is the only brand I’ll look at. If Cartier applied the time decay model to my purchase, they would be very wrong about the efforts that caught my attention and made me interested in the brand.
Model #5 U-Shaped Model
In this model, 40% of the allocation is given to the first activity that created awareness. Another 40% is given to the touch that converted the prospect into a lead, and the last 20% is distributed among all marketing efforts in between.
Let’s say Joe is in the market for a new piece of project management software for his business. He decides to learn more about project management software, so googles the term and clicks on the first ad he sees called “What you need to know about project management software”. He reads that blog and subscribes to their mailing list. The company emails him a week later with another recommended reading, he opens the email but doesn’t click on the blog. A week later clicks on a link on Facebook to visit their site to look at the product page. The company emails him again with a link to download a free e-book on how to deploy project management software, he downloads that book and shortly after fills out a form on the website to get a demo. In this example the company would give 40% to the first ad he clicked on, 40% to the e-book he downloaded, and split the rest between the Facebook link and the email that was sent. The U-shaped model does a good job recognizing the first and last efforts as more impactful to the conversion process, but leaves out an important step – the request for demo.
Model #6 The W-Shaped Model
The W-shaped model is a build off the U-shaped and takes into consideration the activity that led to conversion. This model distributes 30% of the recognition between the first activity, the activity that generated the lead, and the activity that generated the opportunity. The final 10% is distributed among all other activities.
In our example above, 30% would be given to the first blog link clicked, the downloaded e-book, and the landing page to request a demo. The final 10% would be distributed between the Facebook link and opened email that occurred in the middle.
The W-shaped model is an improved model that takes into consideration key milestones in the buyer’s journey – introduction to the brand, conversion to a marketing qualified lead (the ebook download), and conversion to a sales qualified lead (the request for demo).
Model #7 The Z-Shaped Model
As you can expect, the Z-shaped model is a build off the W-shaped model above. Instead of allocating 30% to the 3 key opportunity milestones, it adds the 4thcritical milestone – the close.
Each of these 4 steps receive 22.5% of the recognition, and 10% is left for all other activities in between. The Z-shaped model seems like it would be more accurate than the others because it takes into consideration more steps, but be careful when implementing this model in an organization where sales and marketing are not aligned. If the company does not have consistent processes and messaging through the closing step, it may be hard to attribute the closing spend accurately.
A great time to use the Z-shaped model is when the closing step of the product is fairly self-service or when pricing and add-ons are very fixed, not allowing room for a sales representative to deviate the messaging or pricing and ultimately the outcome.
Model #8 The Custom Model
The custom model is by far our favorite because with strong levels of confidence, it can allocate the appropriate amount of impact each marketing activity has on the final outcome.
This model can also show to what degree of confidence it believes the marketing efforts impact final outcomes as well as different approaches that are most effective, since most buyers purchase with different habits. Typically, custom models are algorithm-based models using different statistical analyses to identify which activities AND in which order are leading to a conversion and close.
The benefit to the custom model is the level of accuracy which it can predict marketing activities impacts. This is a great model for complex organizations with multiple marketing efforts occurring at once and from different channels. The downside to the custom approach is that it requires a sophisticated level of statistical knowledge and quality data-capture methods in order to be most effective.
BRINGING IT ALL TOGETHER
Tracking the types of marketing activities your company conduct and the order that your buyers consume information from your brand will help you understand which strategies are most effective. Being able to use this information to optimize existing campaigns and launch future ones will ensure that your company is maximizing ROI on your marketing efforts. As with most things, attribution modeling is not static – buying habits and trends are constantly changing and keeping up to date with your efforts is critical to staying on top of the activities that matter most and in front of your future customers.