Understanding Digital Attribution Modelling - How to Identify and Measure the right Marketing Metrics for each Touchpoint through to Conversion
by Marije Schreur, on Nov 21, 2020 3:04:26 PM
As a marketing leader, it’s essential that you have a strong overview of the processes and actions needed to both create and execute a long term, competitive marketing vision. However, with so many different marketing tactics used across the globe today, understanding exactly where to invest is critical to achieving your marketing goals. Digital Attribution Modelling will help to uncover the source and amount of revenue generated by your marketing campaigns.
“The amount of spending on digital advertising, websites, and online experiences has made it more important for marketers to determine how they should allocate spending, balance investments, and measure campaigns effectively” ~ Ed See, Deloitte Digital.
Digital Attribution Modelling
Digital Attribution modelling makes it easier to assign cause to effect; to better understand the value of your marketing efforts and see where your investments are best placed, whether that’s through further developing your email marketing strategy, paid ads, social, your own website, SEO, or any other marketing method that you choose to incorporate into your strategies. Unfortunately, researchers at the Aberdeen Group state that attribution is one of the hardest tasks for marketers to get right, especially now that the older models are becoming obsolete.
Attribution & the Modern Customer Journey
Older style attribution models don’t align with the full, content-driven buyer journey. For example, many established models are heavily reliant on ‘last touch’ or ‘last click’ metrics which provide the final touchpoint prior to conversion with the credit for generating the lead. These models place far too much emphasis on late-funnel stages, and are deeply rooted in historical data, rather than data that can be used to predict future behaviour.
It’s clear that many attribution models don’t fit with the inbound methodology, which is why it’s not surprising that less than one third of marketers believe that they have the ability to measure their return on investment across all channels simultaneously. The good news, however, is that there are many other models - and many other metrics - that can be used to calculate the value of your inbound marketing techniques.
Types of Attribution Models
While there are an almost unlimited number of potential attribution models that can be used today, insights firm Gartner has identified the four primary models for marketers:
- Marketing Mix Modelling (MMM): Combining the individual impact of all marketing tactics utilised to measure how full campaigns impact overall business performance.
- Multi-Touch Attribution (MTA): Rather than combining impact, this method approaches each individual effort separately to determine value at each touchpoint.
- Holdout Testing: A form of ‘test and control’ modelling, this attribution method goes one step further to MTA by looking at the impact of niche actions such as display ads.
- Unified Measurement Approaches (UMA): This is a hybrid model that blends MMM and MTA approaches to consider impact at individual and company-wide level.
While Gartner’s Joseph Enever, who identified these four models, notes that ‘no single methodology provides a complete or perfect answer’, it is clear to see that a data-driven multi-touch attribution model is best for measuring the right marketing metrics for each touchpoint through to conversion. Multi-touch attribution enables marketers to track vital metrics across each and every stage of customer experience.
Identifying & Measuring Metrics
While multi-touch attribution is the clear solution to the non-linear customer journey, it does have its own flaws, and the biggest is that it can be challenging to understand exactly what metrics fit in with this sort of modelling. Marketers using MTA will naturally be looking to boost return on investment, so ROI-related metrics are important here. However, it’s important not to focus on key performance indicators that are too niche.
It’s vital to remember that, when looking at marketing from a ‘big picture’ perspective, what KPIs matter at one touchpoint might not matter at another. As every marketer knows, marketing is no longer just about qualifying a lead and passing them over to sales; marketing is about supporting and guiding the customer through the entire buying journey, from start to finish. With different teams and different departments involved in the various touchpoints, it’s easy for metrics to conflict. But ultimately, everyone’s working towards the same end goal. That’s why the Interactive Advertising Bureau recommends selecting ‘KPIs and metrics that relate to overall campaign goals’.
There is a benefit to taking a broad approach to metrics, and that’s that the KPIs that you do choose to measure are more likely to be understood by the board. By aligning your metrics with overall business goals, it becomes easier to draw a line between what you’re doing, and how you’re impacting the core business, which can in turn make it easier to get budgets approved, and get approval for making necessary new hires.
The Benefits of Marketing Attribution
According to research by McKinsey, a good attribution model can reduce marketing spend by as much as 20% by highlighting those tactics that aren’t working, and allowing marketers to drive more into activities with the highest ROI. Despite this, it’s reported that around 40% of organisations don’t have an attribution model in place. The truth is that not every attribution model works for every business. But for those committed to using marketing not as a driver of sales but as a way to optimise approaches based on the buyer journey, a solid multi-touch model can help to identify those areas of inbound that are really having an impact, right through to conversion.