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Exploring Diverse Marketing Attribution Models for Enhanced ROI

Calculating marketing channel return on investment (ROI) is essential for long-term business success. Take a look at the different marketing attribution models, and you’ll find there is no shortage of options. This is your guide to the diverse marketing attribution models with a focus on maximizing ROI.

The First-touch and Last-touch Attribution Models

First-touch attribution gives credit for the conversion to the customer’s initial touchpoint. The only pitfall of first-touch attribution is that it fails to gauge the true efficacy of lead nurturing efforts. Moreover, first-touch attribution also ignores the inherent value of the mechanisms that gradually steer customers to conversion.

Last-touch attribution credits the final point of contact for the conversion. As an example, if someone sees a blog post at the last stage of the buyer journey and subsequently transitions to a customer, that last touchpoint gets the entirety of the credit. The logic in using the last-touch attribution approach is that it provides the insights necessary to succeed in converting those pesky leads that got caught up in previous stages of the buyer journey.

The Multi-Touch Attribution Model

Multi-touch attribution empowers businesses and marketers to pinpoint campaigns and channels that contribute to the desired goal of engagement and subsequent conversion. Also referred to as fractional attribution, multi-touch attribution gauges the value of individual touchpoints throughout the customer journey that culminates in conversion. Multi-touch attribution whittles down the touchpoints to those that make the most impact, helping businesses maximize the efficacy of their ads.

The linear model falls beneath the overarching multi-touch attribution umbrella. Linear attribution states that each touchpoint deserves equal credit for sales, meaning those touchpoints would be provided with a portion of the credit. Take the linear route, and all touchpoints on the path to conversion are credited in an effort to tell the entirety of the conversion story as opposed to picking one event that may (or may not) have been the primary motivation for conversion.  

However, the linear approach tends to be favored by those who intend to maintain ongoing engagement across the entirety of a lengthy sales cycle. The downside to attributing equal credit to the entirety of touchpoints is that it prevents businesses from making the most of their limited marketing dollars. In some situations, it is better to diversify the marketing budget across the entirety of touchpoints or most of them for optimal impact.

Custom Attribution Models

Though it might be hard to believe, custom attribution models have arisen. The custom approach attributes credits to multiple touchpoints throughout the buyer journey. Such a model is ideal for advertisers who track performance analytics with regularity. However, as long as the person responsible for developing custom attribution models understands the nuances of campaign formats, they’ll likely be able to develop an insightful model.

The W-Shaped and U-Shaped Models

The U-shaped model provides the most possible credit to the initial and final touchpoints, dividing the remaining 20% across touchpoints that occur in between the two polar ends.  The U-shaped approach is ideal when desiring to gauge an ad’s performance from beginning to end.  However, the downside to the U-shaped model is that it overstresses the value of the initial and final touchpoints.  

The W-shaped model assigns an elevated value to the initial and final touchpoints, giving each 30% weight as opposed to the 40% weight of the U-shaped approach.  The final 10% is distributed along the remaining touchpoints. In short, the W-shaped model prioritizes credit across visits, leads, and opportunities.

Z-Shaped Attribution Model

Z-shaped multi-touch attribution models credit several touch points throughout the buyer’s journey.  However, only partial credit is given to each touchpoint. The Z-shaped model essentially builds on the W-shaped model, providing the bulk of the credit to the interactions that are the most important.  

To be more specific, the Z-shaped model identifies four specific interactions, assigning each with 22.5% credit. The other touchpoints are assigned a mere 2.5% credit. However, the primary flaw with the Z-shaped attribution model is that it is limited to seven user interactions.

The Time Decay Model

The time decay model gradually increases attribution as leads approach conversion. Time decay marketing attribution ultimately suggests that the touchpoints that are the closest to the actual point of conversion are credited more than previous interactions.  

However, there is a caveat to the time decay approach in that it is less effective for short sales cycles, and this approach diminishes the value of sources that initially drew leads to the funnel.

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