With more channels than ever before through which to market your small business—from digital platforms like social media ads and email to more old-school TV ads and direct mail campaigns—it’s difficult for marketers to get a handle on which strategies are effective and which are not.
That’s why many businesses use marketing attribution to build a better understanding of which aspects of their marketing campaign are driving ROI—allowing them to make smarter decisions about where to drive budget and power the maximum level of conversion.
Put simply, marketing attribution is an analytical process that provides insight into various steps of the customer journey and attempts to assign weight to the marketing touchpoints that ultimately led to a sale. There are a number of different models, with the main ones being single-point attribution and multi-touch attribution—and most businesses will likely focus on the latter.
When done well, marketing attribution can help you make the most of every marketing dollar and fine-tune your campaigns for maximum impact. While it can be complex to implement (with some approaches requiring sophisticated analytics technology), the core value proposition of marketing attribution is simple to grasp. Let’s go over the basics.
A form of statistical analysis, marketing attribution models look at each component of your marketing campaign and try to determine how much it contributed to conversion. It’s typically used to gauge the efficacy of various digital marketing techniques, but getting the full view of ROI may require you to evaluate offline touchpoints as well.
The data evaluated by marketing attribution models takes place at the level of a single individual (as opposed to an aggregated mass), and considers one or many steps along the customer journey. Did a stellar deal served up in a targeted ad push them over the edge? Or a piece of blog content? Or a stellar presentation provided by your sales team? While you can’t personally interview each and every customer and ask what made them pull the trigger, marketing attribution may just be the next best thing.
Of the two main schools of thought around marketing attribution, single-touch attribution is the simpler. This approach typically only considers one of two touchpoints on the customer journey: the first one your customer encountered, or the last.
For the former, marketers will simply tag a source (like a whitepaper) and credit it for the final conversion. However, this approach ignores a lot of potentially relevant information—namely, all the other marketing elements that may have contributed to a sale after that first click.
Meanwhile, the form of single-touch attribution that focuses on the last touchpoint before conversion may put some deserved weight on the last piece of the puzzle pre-conversion. However, it doesn’t consider the potentially lengthy customer journey (and decision-making process) that preceded it.
For these reasons, most businesses consider single-touch attribution somewhat archaic, harkening back to a less fragmented era of marketing. That’s why, for many marketers, it’s this next form of marketing attribution that rules the day.
In contrast to single-touch attribution, multi-touch attribution takes into account several factors (or even all factors) of your marketing spread. It looks at the bigger picture of the customer journey instead of one aspect of it, and generally results in a far more accurate interpretation of which touchpoints are driving conversions.
Here’s where things get interesting: There’s a wide range of approaches within the larger umbrella approach of multi-touch attribution, each assigning different weight to various moments within the customer journey. Let’s take a look at some of the more common ones.
This is the simplest form of multi-touch attribution. Each touchpoint engaged with on the path to conversion is equally credited for conversion. On the plus side, this approach gives weight to every touchpoint your customer interacted with before converting, providing a more thorough summation than single-touch models. However, it lacks nuance—if your customer opened 20 of your email newsletters and then looked at one Instagram post before converting, both will be given equal weight in a linear attribution model.
This model is similar to linear attribution but also accounts for when a particular interaction occurred. In this approach, more weight is given to touchpoints closer to the moment of conversion. The assumption is that these interactions had a greater impact on the decision to purchase, with the last touchpoint getting the most credit. This type of approach is most useful for businesses with a longer sales cycle (like B2B companies), where relationship-building is essential for conversion.
In a U-shaped approach, the first and last touchpoints are given 40% of the credit for conversion, with the remaining 20% applied to anything that happens in between. A W-shaped model builds on this idea, adding a third touchpoint—opportunity creation—and giving these three interactions 30% of the credit (and spreading the last 10% across the rest). These two analytical modes are also known as position-based attribution and are well suited to businesses with many different touchpoints along the customer journey. Here, each interaction receives credit for conversion, but the most consequential ones are weighted more heavily.
Lastly, marketers can create custom attribution models that are uniquely tailored to their marketing approach. Since it’ll be up to you to set how each event is weighted, this can result in an even more nuanced view of what’s driving conversion. While these models can be difficult to implement if your business doesn’t have a vast reserve of customer data, tools like Google Analytics can help you get started.
So which approach to marketing attribution is the right one for your business? First, consider your goals. If your main goal is to boost conversion, you may want to consider attribution models that place more weight on touchpoints closer to the bottom of the sales funnel. This focuses your efforts on leads that are already qualified and likely have some familiarity with your brand. In fact, they may have already converted in the past—and approaches like time decay can help you push budget toward those later, decisive interactions.
On the other hand, if your main goal is to acquire new users and build awareness, the better approach may be to focus on earlier touchpoints with models like position-based attribution or even a single-touch approach centered on the first click. And for businesses with longer, relationship-focused sales cycles, linear attribution or time decay ensure you’re not forgetting about the parts of the customer journey that take place in the middle—not just the beginning and end.
Another factor to consider is how much of your business is done online vs. offline. Multi-touch marketing attribution is generally more useful for businesses that use a range of digital approaches. Those that spend more on channels like print ads and TV spots may want to consider combining multi-touch attribution with traditional marketing mix models, which were developed in an earlier, less fragmented era of marketing.
Not sure which attribution model to use? Try testing different ones to gauge the effectiveness of one model vs. another. In most cases, it pays to verify your assumptions so you’re basing decisions off of provable data, rather than a hunch. And if you’re still uncertain where to start, go with one of the simpler approaches before creating your own, one-of-a-kind custom model.
Businesses that incorporate attribution models into their marketing strategy stand to realize a variety of benefits. First, and most obviously, marketing attribution provides a window into the conversion process and helps you understand which channels are most effective at driving sales. Those insights can then be used to optimize campaigns and direct spend to key touchpoints in the customer journey.
Similarly, marketers get more visibility into what’s not working, allowing them to make decisions about when one element isn’t pulling its weight—particularly if it’s a touchpoint previously thought to be a key revenue-driver.
Beyond those points, marketing attribution helps businesses develop a more nuanced understanding of what their customers experience on the road to conversion, allowing them to make key budget decisions with increased confidence.
Of course, for attribution models to work at all, you’ll need to make sure every touchpoint is tagged for campaign tracking. That means emails, social media ads, blog posts—you name it. Don’t be afraid to pull a data expert into the marketing conversation; implementing these types of reporting tools often requires a specialized, tech-savvy skill set (although there are also plenty of guides and free services out there).
Whether you’re marketing a large enterprise or a small business, attribution models can help take the blind spots out of your marketing strategy. While there’s no one-size-fits-all approach, each provides a deeper understanding of the various channels and touchpoints used to create leads, build opportunities, and finally close a sale.
Armed with that information, you can start to get a far more accurate picture of ROI and—rather than throwing ideas at the wall and seeing what sticks—craft campaigns built on a proven set of facts about your customers, brand, and industry.
Meredith Wood is the founding editor of the Fundera Ledger and a GM at NerdWallet.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.