Multi-Touch Marketing Attribution Models: A Comprehensive Guide
We continue our comprehensive guide on historical marketing attribution models. In this article, we discuss multi-touch attribution approaches. Read about single-touch marketing attribution approaches in the first part of this series.
Multi-Touch Marketing Attribution Models
In contrast to single-touch models that assign a contributing value to just one touchpoint, the multi-touch marketing attribution models assess the performance of multiple touchpoints.
Although both models follow the same rules in analyzing user actions, the multi-touch models give the best representation of a customer purchase journey.
Here are the four types of multi-touch marketing attribution models:
- Linear attribution
- Time decay attribution
- Position-based attribution
- Data-driven attribution
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1. Linear attribution
Linear attribution is a basic multi-touch model that assigns an equal amount of credit to every touchpoint, regardless of its position in the marketing funnel. The first-click, last-click, and all other intermediate touchpoints are treated with equal importance.
The linear attribution model is an improvement from the single-touch models because it acknowledges that customers interact with multiple channels before converting or buying.
With linear attribution, you can get a complete view of the customer’s purchase journey and uncover patterns that were otherwise concealed. It is arguably the easiest approach to multi-touch modeling.
If you want to analyze the efficiency of channels individually, the linear attribution model may not be the best fit. Since it does not consider the varying performance of each touchpoint, it may give undue credit to a channel with a little role to the purchase decision.
Best use cases
If you want a simple and straightforward way of displaying a balanced outlook about the entire marketing strategy, then the linear attribution model could be the best option. This model will give you a quick, complete picture without having to create complicated algorithmic models.
2. Time decay attribution
Time decay attribution is a multi-touch model that assigns more value to the channels nearest in time to the sale or conversion point. With this model, the first interaction receives less weight while the final interaction receives the most weight.
Time decay is a good model for optimizing the marketing strategies that resulted in conversions directly. Since it advocates that the latter touchpoints have a larger contributory role to conversions, it’s good for identifying the converting channels and allocating resources that maximize their productivity.
Early touchpoints can still play a critical role in influencing the purchasing decision. If it were not for the initial touch, how did the prospective customer discover your services? Therefore, giving less credit to the channels that introduced the customer to your business may not appropriately represent the ROI picture.
Best use cases
The time decay historical marketing attribution model can be suitable during lengthy sales cycles, such as costly B2B purchases, where touchpoints that occurred earlier are discounted. Furthermore, if relationship-building is a critical factor in your business, then the time decay model can assist in mapping the path to conversions.
3. Position-based attribution
Position-based attribution, also called U-shaped, is a multi-touch model that enables you to build a hybrid of the last-touch and the first-touch attribution models. Rather than giving all the weight to either the first or last touchpoint, this model splits the credit between them to acknowledge their critical roles in introducing customers and prompting the final conversion respectively.
One common technique is to allocate 40% of the weighting to each of the first and last touchpoints and distribute the remaining 20% to the touchpoints in the middle.
The position-based model places a bigger emphasis on the initial touchpoint and the last touchpoint, but it also considers the other nurturing interactions that take place in the middle of the sales cycle.
If other models, such as linear attribution, were used, they could dilute the important role played by the discovery touchpoint and the converting touchpoint.
The position-based marketing attribution model gives very little credit to the channels in the middle of the sales funnel. This may not paint the right picture, especially if the middle channels are essential to the digital marketing activities, and if they perform better than the first and last touchpoints.
Best use cases
If you want to prioritize on the channels that introduced the customers to your business and the last channels that led to conversions, then use the U-shaped attribution model.
4. Data-driven attribution
Lastly, data-driven or custom attribution is a multi-touch approach that is considered to be more accurate and effective than the other attribution approaches. Data-driven attribution models accumulate the entire customer path data and carry out analyses that determine the performance of each channel.
Every touchpoint is allocated a custom credit that denotes its perceived importance. Since it’s data-driven, it adapts to the provided historical data, allowing you to tailor the marketing strategy according to the performance of each touchpoint.
The data-driven attribution models provide a comprehensive outlook of the customer path, without concentrating on basic factors like touchpoints happening first or last. With today’s increasingly complicated customer journeys, the data-driven approaches provide more effective attribution than the other single-touch and multi-touch models.
For example, if your promotional strategy consists of a vital landing page in the middle phases, you can allocate more credit to that phase flexibly; if you were to use a model like first-touch, it could lose the nuances of that marketing strategy.
The data-driven attribution models are expensive and complicated to implement. You need lots of data and extensive custom configurations to set it up. Nonetheless, the higher budget allocation on this approach could easily be offset by better ROI realized in marketing campaigns.
Best use cases
Where the marketing budget allows, the custom attribution approach should be the first choice for any promotional strategy. It’s best suited for marketing teams that want to enjoy the flexibility of tailoring the attribution process to meet their specific needs while achieving enhanced accuracy along the way.
Choose Your Marketing Attribution Approach
So, which marketing attribution approach should you use?
Arguably, there is no “best” attribution model, as such. Your choice of a model will depend on a wide range of factors, including business objectives, customers’ purchasing behavior, and budget constraints.
Furthermore, since attribution modeling is an important analysis technique, it’s essential to compare the performance of different models and understand the customer journey comprehensively, instead of sticking to one type of model.
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