The complexity of marketing communications is increased by incorporating technology into business strategy, necessitating advanced analytics of marketing performance. There are gaps in the systematic description of the methods and explanation of their capabilities due to the rapid advancements in marketing attribution methods.
Today’s buyer’s journey includes several actions across multiple touchpoints and channels. A single interaction is rarely enough to result into sale conversion.
Sales conversion is often the result of a combination of interactions from various sources, including blog articles, social media posts, webinars, in-person events, conversations with sales-reps, website content, email marketing campaigns, and more. All these touchpoints contribute to your customers’ conversion.
What is multi-touchpoint attribution?
Multi-touch attribution is the process of determining the worth of each customer touchpoint that leads to a conversion. The goal is to determine which marketing channels or campaigns should be credited with the conversion, with the goal of allocating future spending to acquire new customers more effectively.
A marketing professional can see how much of an impact each channel has on a sale by using the multi-touch attribution technique, which accounts for all the touchpoints on the consumer journey and gives each one a
fractional credit. Multi-touch attribution is a more sophisticated alternative to first-and-last-touch attribution, which assigns all the accountability to the first or last marketing touchpoint before the consumer converts through a purchase, download, or any other event. These approaches result in marketers making decisions based on skewed data because they apply rules arbitrarily, making it impossible to accurately measure the contribution of each touchpoint in the consumer journey.
How a brand is benefited from multi-touchpoint attribution?
Imagine you are a marketer for a cosmetics brand. You have just released a new line of skincare products, and you are looking for ways to boost sales. You have tried all the traditional marketing methods—TV ads, radio spots, online ads, etc.—but none of them are generating the results you were hoping for. What do you do?
If you are using multi-touchpoint attribution, you can take a step back and analyze what is working and what is not. Your TV ads are generating a lot of clicks, but few sales. In that case, you might want to focus more on online ads or in-store promotions. Or your online ads are getting a lot of clicks, but few conversions. In that case, you might want to focus more on TV ads or radio spots.
By breaking down your data into individual touchpoints, you can get a more accurate picture of how your marketing efforts are performing. This allows you to optimize your strategy and get the best results possible.
What are the benefits of multi-touchpoint attribution?
Multi-touchpoint attribution provides a more accurate view of how customers interact with your brand. By identifying the most effective channels driving customers to purchase, you can focus your marketing efforts on those channels and improve your return on investment.
Multi-touchpoint attribution can also help you identify which channels are most effective in driving customer loyalty and engagement. This information can help you design more effective marketing campaigns that will keep customers coming back for more.
During the forecast period, the multi-touch attribution market is anticipated to experience a CAGR of about 15%. (2021–2026). The following advantages account for the reasons:
Optimized budgeting allocation for marketing
Attributing touchpoints allows you to invest based on the effectiveness of each channel, ensuring that your marketing dollars are spent only on the campaigns and channels that are effective.
Increased ROI and ROAS with the same budget
You can find the most effective channel by crediting each channel based on its contribution to the final conversion. Instead of investing in a variety of resources, you can concentrate your efforts on a few that provide the highest return on investment. This increases overall ROI without increasing your marketing budget.
Multi-touch attribution employs a bottom-up, deep-dive methodology. This implies that each multi-channel touchpoint in a customer journey is rewarded based on a variety of criteria, including its role in the conversion process, the time since a customer last visited, the touchpoints that come before and after it, the device or medium used to access it, and so on.
Customized funnels and flows
MTA marketing identifies the particular requirements and preferences of your customers. As a result, you can greatly improve the relevancy of your targeting and messaging to the stage of the customer’s journey.
Enhanced product development
You can gather the information you need to create highly customized products using the data on the unique preferences of your customers.
It’s simple to believe that the campaign you’re working on will make a big difference or that the touchpoint that made the biggest difference last year still makes the biggest difference today. MTA assists in reducing bias and identifying what works based on actual data.
How can you implement multi-touchpoint attribution in your marketing strategy?
One of the best ways to take advantage of multi-touchpoint attribution is to align it with your marketing strategy. Every business is different, so there’s no one-size-fits-all answer. However, there are a few things to remember when implementing multi-touchpoint attribution into your marketing mix.
First, you need to identify all the channels driving traffic and conversions. This could be anything from organic search, paid search, social media, email marketing, or even offline channels such as TV or radio advertising.
Second, you need to make sure that each of those channels is properly tracked and measured. This means setting up UTM codes for all paid campaigns, tagging social media posts with relevant keywords, and tracking email conversions through your CRM system.
Finally, you need to use the data from your measurement tools to create a custom attribution model that gives equal weight to all the channels involved. You can then use this model to make data-driven decisions about where to allocate your marketing budget for maximum ROI.
Multi-touchpoint attribution models
The most crucial touchpoints in the buyer’s journey can be identified using a variety of attribution models, and various multi-touch attribution models weigh the various touchpoints differently.
Four of the most popular multi-touch attribution models are listed below to get you started :
1. Linear Attribution
A linear attribution model, also known as an even-weighting attribution model, credits every touchpoint in the buyer’s journey equally for a conversion. When it comes to multi-touch attribution models, this is the “gold standard.”
Who is the best candidate for linear attribution?
Linear attribution is useful if your prospects are frequently in the consideration phase of the buyer’s journey for an extended period because it demonstrates the impact of all of your content and messaging during that extended period.
It’s also ideal if you want to know how your touchpoints interact to influence a deal, or if you’re new to multi-touch attribution and don’t have a baseline understanding of how your touchpoints perform among your target audience.
2. Time Decay Attribution
A time-decay attribution model organizes your touchpoints based on their percent influence on a comparison, with the least-influential touchpoint (with the lowest percentage) coming first and the most-influential touchpoint (with the highest percentage) coming last.
Who should take advantage of time decay attribution?
When measuring the success of short-term touchpoints like campaigns, time decay attribution is ideal.
3. U-Shaped Attribution
A U-shaped attribution model, also known as a bathtub model, assigns a higher percentage of credit to the first and last touchpoints in the buyer’s journey than to the touchpoints in the middle.
Who should make use of the u-shaped attribution?
If your team wants to focus on the impact of the first and last of your multiple touchpoints, U-shaped attribution is ideal. There is less emphasis on touchpoints that support the buyer’s journey’s middle stages.
4. W-Shaped Attribution
The W-shaped multi-touch attribution gives credit to the first and last touchpoints in the buyer’s journey, as well as value to touchpoints in the middle of the buyer’s journey. The remaining touchpoints are then given equal weight.
Who should make use of the w-shaped attribution?
W-shaped attribution is useful if you want to understand not only which touchpoints convert leads, but also which touchpoints encourage customers to engage and progress through the buyer’s journey.
Multi-touchpoint attribution modeling Vs Marketing mix modeling
What are the benefits and drawbacks of Marketing Mix Modeling versus multi-touch attribution? It’s a common question that necessitates a more detailed response.
With the multi-channel approach of today’s marketing arena, the agencies need complex tools to determine where customers can be reached and what combination of channels will most likely generate the best conversions and the highest return on investment (ROI).
Either approach can provide business insights, but both approach the problem differently. Marketing Mix Modeling takes a top-down approach to understanding how each aspect of a business adds to a business outcome. A multi-touchpoint attribution is a bottom-up approach that tries to meticulously account for every consumer media sighting and then attributes each sighting to a site visit or online sale.
Multi-Touchpoint Attribution solutions are best suited for primarily digital brands because they have access to the majority of consumer media sightings and can attribute a sale to a single consumer. Brands which only have access to aggregated sales data, rely on a healthy online and offline media mix and want to understand the non-media impacts on their business, on the other hand, prefer Marketing Mix Modeling.
Multi-Touchpoint Attribution solutions can provide incredible precision for digital media campaigns; however, Marketing Mix Modeling provides a more accurate, all-encompassing perspective.
Choosing a multi-touch attribution model
The multi-touchpoint attribution has different types of attribution models each with a level of sophistication that can differ dramatically. The marketers define the rules of how credit is allocated to one or more points in the customer’s journey in the rule-based method which is subjective.
Comparatively, algorithmic methodologies use objective, statistical modeling, and machine-learning techniques. Marketers can plan or optimize future marketing efforts by using the output of an algorithmic model.
The sophistication and granularity of predictions are the terms in which even algorithmic models vary.
All multi-touch attribution models, regardless of method, assist marketers in determining the impact of their marketing investments at granular levels by attributing credit for a KPI event (e.g., conversion, lead, etc.) to one or more touchpoints.
Here’s a rundown of some common attribution models:
Rules-based multi-touch attribution
Equal Weight: All consumer journey touchpoints are given equal credit for the KPI event in an even-weighting model, also known as a linear model. It is crucial to reiterate the message numerous times throughout the customer journey because marketers frequently use this model to evaluate marketing initiatives with lengthy consideration cycles. It’s also a good place for marketers to start if they’re unfamiliar with multi-touch attribution or don’t already have a grasp on the typical consumer journey across channels.
Position-Based: In a position-based model, also referred to as a bathtub or u-shaped model, the first and last touchpoints in the customer journey are given more credit than the touchpoints in between. This model is frequently used by marketers to prioritize “opener” and “closer” touchpoints over “supporter” touchpoints in the middle of the customer journey.
Time Decay: A time-decay model gradually increases the percentage of credit as it approaches the final touchpoint in the consumer journey. This model is frequently used by marketers to evaluate promotional campaigns and other marketing initiatives with quick consideration cycles.
Algorithmic multi-touch attribution
Fractional Attribution: The influential marketing touchpoints and dimensions (campaign, placement, publisher, creative, offer, etc.) along the consumer journey are calculated and given fractional credit for a given success metric using fractional attribution, which is used to guide future marketing spend allocations.
Marketers can comprehend the best ways to divide their budgets between channels and subchannels as well as the most minute details like keywords, placement, and creativity. Models are updated as frequently as every day, allowing marketers to decide how to optimize while campaigns are still running.
Incremental Attribution: Incrementality is a measurement of the increase in conversion rate that comes from advertising expenditure. The best way to allocate a budget is to consider incrementality when deciding where to spend money and how much to spend.
Marketers can assess which advertisements, creatives, and placements are working the best and whether they are worth investing in. While fractional attribution does not take into account additional factors like demographics and pre-existing brand awareness, incremental attribution does.
Which model is best for you?
In an era when marketers are increasingly expected to deliver results, any of these models is preferable to siloed channel measurement or no measurement at all. These methods will provide you with previously unavailable insight into the consumer journey.
Finally, which multi-touch attribution solution is best for you is determined by your goals, business needs, and how you intend to use the output to improve the effectiveness of your marketing.
Virtue’s Marketing analytics solutions assist our marketing customers in capturing and integrating all available internal and external data to create a single source of truth, resulting in powerful competitive advantages.