When you have lots of marketing channels and materials in the wild, it can be difficult to know which of those marketing channels produces the biggest return on investment. For example, if you put out a few digital ads and some billboard or out-of-home advertisements, and your profits increase by 2%, how can you know which of the advertisements was responsible for the increase?
Attribution is the key. Let’s break down what attribution means and how it’s used in marketing.
In marketing, attribution is the science of determining how different marketing tactics for channels may have contributed to overall marketing goals, including sales, conversions, and customer loyalty. It’s how you know which marketing channels resulted in some positive or negative outcome.
For instance, say that you want a marketing campaign to result in a revenue increase of 10% over the next quarter. However, your marketing campaign utilizes multiple different channels, including digital ads, billboard ads, social media marketing, and much more.
Attribution helps you figure out which of those marketing channels contributed to your overall revenue increase (and which channels may not have).
Marketing attribution can also tell you:
Think of marketing attribution as a critical analysis that helps you better understand your marketing campaigns and the effectiveness of your chosen strategies.
An understanding of marketing attribution theory is necessary and important for one big reason: knowledge is power, especially when it comes to marketing data.
The more you know about the effectiveness of your marketing campaign, the better your future marketing efforts will be. You can take the lessons learned from previous marketing efforts and incorporate them into upcoming marketing strategies or tactics.
Say that you run a multichannel or omnichannel marketing campaign and find that social media marketing and billboard ads are your two most popular and successful marketing channels by far. In contrast, PPC or pay-per-click ads don't do much for your marketing goals.
Armed with this information, you can increase the number of billboard ads you have in your local area, plus double down on social media marketing to build brand awareness and brand loyalty among your target audience members. With a little luck, your next marketing campaign will be even more effective and profitable for your organization.
Though marketing attribution is important, it also comes with significant challenges.
For example, it can be difficult to ensure that you credit the right touchpoints whenever you practice marketing attribution. It can also be tough to make sure that you capture every piece of a customer’s journey without asking them directly. As a result, you’ll often have to aim for a “best average” marketing attribution approach to get a generalized, roughly accurate understanding of how a customer interacted with your brand.
Furthermore, any inefficiency, biases, or accuracy your attribution suffers can negatively impact your long-term marketing strategy. If you come to the wrong conclusions, for instance, you could double down on marketing channels that are less than effective for your target audience members.
When practicing marketing attribution, you can use many different models of analysis. Here’s a breakdown of each of those types of attribution, which you can analyze with attribution software, like CRM/customer relationship management software:
This gives the credit for a positive action, like a purchase or conversion, to a consumer’s first touchpoint with your brand. That can be the first time to visit your brand website, the first time they see an advertisement, or the first time they visit a product page. It's easy to implement, so it's popular, but it doesn't give you extra visibility for any lower funnel touchpoints, like reading a product description.
That’s the opposite of first-touch attribution, as it credits the successful action to the final touchpoint in a customer journey. This is a good attribution model to consider if you want to emphasize conversions or revenue, but less important for factors like brand awareness. Both first and last-touch attribution are external attribution models.
Linear attribution considers all the different contributing channels or touchpoints throughout a customer journey. It gives equal credit or weight to every touchpoint, which can be beneficial when you want to learn the full picture of your customers' interactions with your brand.
This model focuses on the touchpoint that generated the lead in the first place, such as a marketing email, a reference from another brand or business partner, and so on. This multi-touch attribution can be an effective model if you want to figure out which channels are performing well for marketing goals.
Time-decay attribution weighs the purchase funnel touchpoints differently. It gives more weight or credit to recent interactions, so it can be very useful if you want to know which marketing channels do the most to inspire customers to make purchases or convert.
Also called U-shaped attribution, position-based attribution credits 40% of a conversion to the first touchpoint, 40% to the touchpoint before a conversion, and 20% to all other touchpoints.
Of course, you can also come up with your own custom attribution model if you so choose. But this will require you to analyze your marketing touchpoints and channels thoroughly. All types of data-driven, so you’ll need to use algorithmic software, Google Analytics, and machine learning to make the most of these and boost your marketing ROI.
There are many benefits to practicing marketing attribution.
For starters, it allows marketing teams to optimize where they spend their marketing money. If you discover that some channels are more effective than others, for example, it only makes sense to put more marketing funds into those channels than other channels.
In a broad sense, digital marketing attribution can increase your ROI or return on investment. Through effective attribution, marketers can reach customers at the right time and with the right message, resulting in more conversions and purchases overall.
Furthermore, marketing attribution lets you double down on personalization: an important element for all modern marketing efforts. As you discover what channels or marketing types are preferred by your customers, you can provide those marketing channels to your customers more regularly.
Lastly, marketing attribution can even let you improve your product development to some extent. By discovering the kinds of marketing that connect to your customers more readily, you'll be well-equipped to create your products to solve those customers' pain points or satisfy their desires.
Through attribution, you can get a better understanding of which marketing channels and materials are most effective for your brand, plus understand which marketing channels result in direct consumer conversions. Attribution is a vital element of marketing analysis, so you’ll need to practice it regularly.
That's easier said than done when it comes to out-of-home marketing materials, like billboard ads. AdQuick can help you do that with our comprehensive and navigable platform. Try it today.
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