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October 1, 2018

Four Types of Attribution Modeling

What it means to your marketing, and what, if anything, you need to be doing with it.

Hello Campers!

If you have found this page you are probably asking questions about attribution modelling, what it means to your marketing, and what, if anything, you need to be doing with it.

When we talk about attribution modelling what we really mean is how do we decide which channel is working, and where do we assign value across the channel mix. What is the relationship between all the different channels and how do they pull together to drive a sale?

We endeavour to assign a value to each channel, however, there is no real right or wrong way to approach the subject. Each advertiser will have different opinions/approaches.

There are a number of models we can use. I won’t go into all of them here, but rather I’ll explain the four main ones. These are: first click, last click, linear, and position based.

Scenario
We have had a sale, to make this easier that sale was worth $1,000 exactly.

The sale occurred after a 5-step customer journey from the first search to the placed order.

The path was: Adwords > Direct > Social > Affiliates > Display

Through attribution modelling, we would assign a value to each of those steps in order to understand which step in the journey was most important.

If we split it out by $ value, the different models would look like this:

First click

  • Adwords               $800
  • Direct                    $50
  • Social                     $50
  • Affiliates               $50
  • Display                  $50

The problem with this model is that if we only used first click all our time, effort and budget would be spent on Adwords. This would not account for the very real impact the other channels have.

Last click

  • Adwords              $50
  • Direct                   $50
  • Social                    $50
  • Affiliates              $50
  • Display                 $800

The issue with last click modelling is that if we pursued this approach in all campaigns all money would be spent on display. The initial brand awareness raised by Google and the other channels would have never happened, meaning the sale would probably not have happened either.

Linear

  • Adwords              $200
  • Direct                   $200
  • Social                   $200
  • Affiliates              $200
  • Display                 $200

This model is a little fairer than the others but is still has issues. For example, we don’t need to assign a value to direct traffic yet this model would still do that. We are also undervaluing the initial brand awareness generated from Adwords and the effect social and affiliates has on the customers consideration.

Position based

  • Adwords              $400
  • Direct                   $66
  • Social                    $66
  • Affiliates              $66
  • Display                 $400

Position based is a little fairer again but is by no means perfect. This model assigns most of the value to the channels that opened and closed the sale but very little to the others in between.

We have firsthand data that proves both social and affiliate marketing have a very real impact on the buying process but this model would only assign 6% of the sale to those channels. The issue here is that this simply is not realistic.

A good marketer will understand that there is no one size fits all solution when it comes to Attribution modeling. Adopting a multi-model approach will allow for a fuller picture and allow the marketing manager to gain a better understanding.

If you have any questions on attribution please feel free to reach out to the team directly!

Gary

Gary Devine

Head of Search

I’ve worked in Advertising & Digital since I graduated from university in 2010. I spent 2 and half years working for Google in the UK where I fell in love with digital and creative work. I now run a great team here in Sydney doing great work.

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