Marketers and advertisers use various metrics and models to determine how various campaigns and efforts contribute to the organization’s revenues. An attribution model is commonly used to assign the credit for conversions and sales to various touch points along the marketing funnel and the buyer’s journey. An important method of attribution many digital marketers have used for a long time is the last-touch attribution where the credit of prospect’s conversion is typically attributed to the last campaign with which they interacted. Marketers then try and allocate the maximum marketing spends on such campaigns.
However, many of them have now started realizing that last minute attribution may not be the best way to assign credit to a campaign in all cases, and have hence started relying on a better attribution model -- multi-touch attribution.
What is multi-touch attribution?
Last-touch attribution is a good way to assign credit to a campaign if you are running a very limited number of campaigns. However, if you are using several touchpoints and several campaigns, this form of attribution becomes highly misleading and doesn’t allow you to allocate marketing spends in the appropriate way. Moreover, crediting only the last campaign with a successful conversion is like thanking only the last person for helping you win a lifetime achievement award though there were several others who contributed towards your success.
On the other hand, multi-touch attribution focuses on understanding the role of each touch point and campaign leading to a conversion. This helps marketers and advertisers understand what campaigns and touchpoints have actually contributed to the conversion. They can then assign their marketing spends accordingly.
Multi-touch attribution assigns a weightage to different channels and touchpoints, which can be done in various ways. However, the best way to assign weightage is by considering the channels being used, customer touch points, and the value of customer interaction and conversion. For example, a prospect downloading a guide carries more weightage than reading a blog as it signals that he may be much more ready to talk to the sales team.
Is multi-touch attribution the silver-bullet?
As we now know that a multi-touch attribution model is better for identifying the campaigns that contributed to conversions, should you jump in and start using multi-touch attribution for allocating your marketing spends?
Before diving in, marketers should understand that every attribution model has a few limitations and shortcomings. It is the same reason why multi-touch attribution too should not be the sole technique you should rely on to allocate your digital marketing funds. Here are a few limitations the model has:
Offline to online effects: For starters, when looking at the impact of campaigns, organizations should consider both digital as well as offline media efforts. For example for a paid search campaign to work, there should be enough search engine queries and for that, there should be sufficient interest. This interest is in turn, influenced by a complete marketing effort, including offline marketing. Hence, it is tricky for statistical and algorithmic techniques to totally disentangle the online from the offline channels.
External influence: Taking the previous point a little further, no attribution model can account for external factors such as pricing, season, economy, and recommendations that can influence the marketing effectiveness as well as customer’s decision. These kinds of external influences can have a significant impact. It can also lead to biased decisions over the effectiveness of certain touchpoints and channels while sidelining other important parameters.
ROI measurement: Attributed ROI may not always give an accurate measure of the organization’s real ROI. Most businesses have a customer database that is built up over time that can contribute a portion of the organization’s revenue. Additionally, brand equity and offline activities too can contribute to the company’s revenues which an attribution model cannot measure.
So, why use multi-touch attribution?
Despite the shortcomings of the attribution model, multi-touch attribution is a fairly good model to assign your marketing expenditure for digital channels and touchpoints. The first reason is that is far better than the first-touch, last-touch, and other attribution models. It brings you one step closer in understanding the real impact of the campaign or channel.
Secondly, there are a few other approaches such as media mix modeling that can address some of the above-mentioned issues. Yet, multi-touch attribution is the only model that can give marketers an insight into the digital marketing impact in a short period of time. Moreover, it is an agile as well as a quickly actionable model.
Multi-touch attribution does have a few limitations when it comes to understanding the true impact of various digital touch points on customer decisions and conversions. Having said that, it is much better than other attribution models. Despite its shortcomings, it still helps in reaching a recommendation on relative budget allocation. Moreover, with more businesses understanding the various aforementioned challenges, they are working towards continuously improving the model to help get closer to understanding the true impact of the marketing efforts.
Originally published , updated March 15 2018