Simply stated, attribution is the process of assigning credit to the event or touchpoint that drove a commerce conversion. To attribute the order to a specific action made by the consumer is to say, “This shopper's order was facilitated by the action he or she took at this inbound marketing or advertising stage, and was driven by this piece of content.” Intuition tells marketers to meet the buyer in every place possible – promote the brand everywhere you can. But unless the data supports this approach, you could be wasting your time and budgeting to push content to non-converting channels. Let’s take a closer look at the process of attribution, the mediums that can drive traffic and conversions to your commerce business, and how this complicates your attribution modeling.
How Does It Work?
Early attribution models were focused on either first-click or last-click attribution. However, retailers quickly realized the flaws in this rudimentary method, as it assigned all the credit to the first or last interaction a buyer had with the brand. But a conversion rarely happens after only one touchpoint. Most times, it's the combination of multiple touches of differing varieties that lead a shopper to convert. This is called an ‘assisted conversion,’ where all of the touchpoints receive the proper attribution, giving a complete picture of your marketing placement success. Unfortunately, this is very difficult to determine without the help of outside tools. Many of the retailers we work with struggle to understand their multi-touch attribution.
What’s the Big Deal?
Understanding your attribution model is important for one, fantastic reason – it provides your cost of acquisition and customer lifetime value. Without knowing where to place your marketing dollars, you’re just drifting in the wind and hoping to land some customers along the way. And because the cost to acquire varies widely depending on the type of media, you could spend your budget on costly channels that don’t provide a return on investment. The ability to see all of the touchpoints that lead to a conversion will help you make highly accurate predictions about how a spend in one channel will lead to an interaction and eventual conversion.
The Importance of Cost to Acquire: Paid, Owned or Earned?
The most expensive channels for customer acquisition are paid. These include email, paid search, display, remarketing, affiliates, paid influencers and social advertising. Your owned channels are more efficient than paid, but remember there is still a cost to owned media, including the time and money required to create it. This category includes blog content, social media publishing, onsite search, and web and mobile properties. Earned media is the payoff of the hard work and money you put into your owned and paid channels. When your brand gets a media mention or is tagged on social media, or when a conversion is the result of a buyer coming directly to your site without a referral, that’s the result of your investment in your brand presence. For this category, think mentions, shares, reposts and reviews.
Multi-Channel Retailers Face Even Bigger Challenges
The issue of attribution is complicated further if a retailer also has an offline presence, where a buyer can interact with you both digitally and at a brick-and-mortar location. Consider this scenario where a consumer is influenced into a purchase decision by multiple interactions:
- A brand posts a photo to Instagram. (owned/online).
- The post is shared by a follower to their social network. (earned/online).
- A member of that social network clicks through the image and lands on the product page of the retailer’s commerce site. That visitor has moved from being a brand stranger to a browser. She puts the product in her shopping cart, begins to complete the purchase, then abandons the transaction. (owned/online).
- Later, she sees the same item in a store window in her local mall. (owned/offline).
- She later receives a cart recovery email, clicks through and finally completes her purchase on the site. (owned/online).
Sounds crazy, right? But this is the reality of today’s multi-channel retailing experience.
What’s the Answer?
There are two ways to look at your attribution. The most simple way is to look at each channel individually using onboard reporting capabilities: email, affiliate, social, paid keywords, display, retargeting, etc. This will give you a basic, but solid understanding of how each channel is growing or declining. Multi-touch conversion is not addressed in this scenario, but at least you will get a handle on the trends in each area. Just be mindful that each self-contained, self-reporting tool will likely take credit for as many conversions as possible and that you’ll have double reporting across channels. Example: Email may take credit for a conversion that is also being counted in the affiliate channel. You can augment this simple approach by using the free tools available in Google Analytics, which takes a decent swing at multi-touch attribution. The second, more expensive way is to analyze your attribution using an advanced tool, such as Converto, Google Analytics 360 (formerly Adometry), C3 Metrics or DC Storm, among others. Ideally, the success of your marketing strategy cannot be accurately measured in a vacuum. These tools can help you clear the fog and allow you to truly understand the most lucrative and efficient channel mix for your marketing budget.
With all the time, effort and cost associated with developing and maintaining an effective marketing plan, it's important to keep an eye on where your dollars are going and how much return you're seeing. And thanks to all the information we're gathering on consumers today, it's become even easier to tailor your message and how you present it to reach your audience the right way. How you choose to track your spend and campaign performance is up to you, but any attribution model is better than taking a shot in the dark. If you haven't already, develop your model and watch where your conversions are actually coming from. The results just might surprise you!