Understanding marketing attribution and what it offers can deliver greater insight into how your customers purchase your product or service. Knowing your customer's motivations can help you understand where there may be gaps in the buyer journey, enabling you to develop a frictionless experience for them.
It’s a discovery process that lends details maybe not yet understood and can help you determine which marketing approach is best suited. As an e-commerce start-up, this kind of insight into your customers is invaluable. With that knowledge, you’ll be able to direct your strategy and resources to better fit your customer needs. However, it often feels like the approach to marketing is both an art and a science.
The complex nature of digital marketing and the volume of data that comes with e-commerce businesses makes it a daunting but necessary challenge to undertake. However, with the right software and modelling in place, you can gain invaluable knowledge about your customer’s behaviour along the buyer journey.
What does marketing attribution mean?
Marketing attribution is all about understanding where and how your customers come to you. You can use it to determine which marketing channels are driving the most ROI (return on investment). Attribution helps you understand what marketing channels are most effective at driving lead conversions. It is a powerful tool that helps you understand the critical customer touchpoints on the journey to sales conversion. Without attributing your customers to a source, you’re in the dark as to what’s working and what isn’t.
“Marketing attribution is essential to understanding how consumers arrive at their purchasing decisions. With accurate attribution, businesses can better determine what motivates their customers to engage with their brands at each step of the buyer’s journey. Through this process, brands learn what aspects of their marketing approach are most effective. Marketers are then able to refine their strategies by reallocating resources to the most rewarding channels.” (What, why and how of marketing attribution, Medium, August 2021).
The need to define and understand various touch points across the buyer journey helps to define the effectiveness of your marketing campaigns. Marketing attribution helps your marketing function to aggregate consumer data from across various channels to make sure each interaction is tracked and understood.
Using things like cookies (to see what webpages users are loading or their demographics for example), UTMs (urchin tracking module codes which are snippets of code attached to the end of a URL and help determine specific sources of traffic across your website) and asking queries at the checkout stage as to where your customers heard about you, all track the customer journey and are some of the marketing attribution tools you can use for discovery and learning about their engagement.
Some recommendations of software that work well with e-commerce businesses:
- LeadsRX Attribution software
The models and platforms you employ need to be able to distil data down to consumer-level behaviours and engagement that can then be used to optimise your marketing campaigns.
Marketing attribution models
There are two main types of attribution models: single and multi-touch. Within each, there are several suggested types of models which provide different insights for your e-commerce business:
Single-touch attribution model
First-Touch Attribution: First-touch attribution is based on the assumption that a consumer chose to convert after the first advert they engaged with. It then assigns full attribution to this first touchpoint, regardless of additional messaging seen subsequently.
Last-TouchAttribution: In contrast, last-touch attribution assigns full attribution to the last touchpoint the consumer interacted with before making the purchase, without accounting for prior engagements.
These models offer a limited view as they don’t take into account the full buyer journey. Unfortunately, they don’t give the full picture to marketing teams.
Multi-touch attribution model
Multi-touch attribution models assess all the engaged consumer touchpoints leading to a purchase/conversion. As a result, these are considered more accurate models. They assign different levels of credit across the various touchpoints on the buyer journey to purchase.
Linear: Linear attribution records each touchpoint engaged with by the consumer leading to purchase. It weighs each of these interactions equally, giving each message the same amount of credit toward driving the conversion.
U-Shaped: U-Shaped attribution model scores engagements separately, noting that some are more impactful than others on the path to purchase, differing from the linear model. The first touch and conversion touch are each credited with 40% of responsibility for the lead. The other 20% is divided among the touchpoints engaged with between the first and lead conversion touch.
Time Decay: This model gives the touchpoints engaged with closer to the conversion more weight than those engaged with early on based on the assumption that later touchpoints have a greater impact on the sale.
Jane Slimming, CEO at Zeal Marketing explained how they have seen the advantages of marketing attribution work in practice. “The biggest thing we see with attribution is that it better helps understand what activity is driving top of the funnel actions as opposed to always being driven by cost per acquisition.
Quite often clients will come to us and all they want to do is reduce the CPA (cost per action). That’s fine to have that approach but if you put all your budget into highly converting keywords for example and turn off, your brand activity over time will lose market share. A good example of this is PPC Keywords. Brand keywords will convert at the lowest CPA but if that's all you do, you will stop getting your brand in front of new customers and over time traffic and volume will drop off. We recommend having set budget for conversion but then also have budget for brand activity. Attribution modelling can help you understand which activities are performing best.”
Next steps for implementing marketing attribution in your business
Your e-commerce start-up will need to consider several factors when looking at which attribution model is the right fit. The key is to think about the type of sales funnel you use and typically how long it runs in order to gauge what might work best.
It’s also important to consider how much of your marketing efforts are focused on offline methods such as print or even events. If your business uses these channels more frequently, consider an attribution model and platform that’s able to combine online and offline efforts together for the most accurate insights.
Your business will likely have to use several attribution models in tandem for the most complete understanding of your marketing impact. Marketing attribution is most definitely both a science, by looking at how the hard data effects your marketing choices, but equally an art, in understanding the creative response that you employ to lead your customer on the most enriching, impactful journey as they engage with your product.
Do you know how you could improve your customer’s journey through marketing attribution?