Marketing Attribution for E-commerce

Toon Hilhorst

Toon Hilhorst
18 Feb 2019

Marketing Attribution for E-commerce

Even though marketing attribution isn’t the newest thing, it’s still relatively unknown in the marketing landscape. No worries, we’re here to get you up to date on this revenue increasing way of looking at your marketing strategy.
Understanding the steps a customer takes, before converting is very valuable information for any marketer or advertiser.

1. Introduction to Marketing Attribution

Marketing Attribution is a way of crediting traffic sources for their effort. In order to provide you with a clear understanding of marketing attribution, it’s best to use a simple example:

  • Michael sees a display banner of a pair of sneakers shoes; he clicks it and buys the new sneakers.

Now, you could say that that sale is made thanks to the display ad. That’s what most, last-click focused attribution models do. But proper attribution looks further than that. Because Michael’s customer journey could have looked like this:

  • Michael reads a blog post on Angie’s Blog about a new pair of sneakers. He clicks on the link and looks at the Sneakers Sports Store.
  • 1 day later Michael does a search to find those shoes on Google. He finds the right website, so he is visiting the Sneakers Sports store again.
  • 2 days later Michael sees a Facebook ad from the Sneakers Sports Store, and he clicks the ad.
  • The same day Michael does a search to find the shoes to show them to a friend. He uses Google to visit the Sneakers Sports store again.
  • 3 days later Michael sees a display banner on a website. He clicks and decides it’s time to buy the shoes.
Example customer journey

In this example, Michael has visited the Sneakers Sports Store four times, before buying the sneakers during his fifth visit. In his customer journey, Michael has been sent to the Sneakers Sports Store by four different traffic sources; (1) blog, (2) paid search, (3) paid social and (4) display retargeting.

As a marketer, you now want to point a finger to which of these traffic sources is responsible for that sale. Or at least, which of these traffic sources is most important. That’s where marketing attribution comes in.

With marketing attribution, marketers can see which traffic sources are most valuable for them. Therefore, marketing attribution can be used to allocate marketing budgets better, and increase revenue.

2. Why you need marketing attribution

Being a marketer or advertiser these days is hard. There’s a lot of competition out there, so you’re working hard to make sure your marketing efforts are resulting in more sales, and so more profit.

Therefore, you’re probably using several marketing channels, to send traffic to your website. You probably run a Google Paid Search Account, do some social advertising on Facebook and Instagram and maybe you even do a retargeting display campaign.

With all those traffic sources, you might be having some difficulty identifying the most valuable marketing channels. Furthermore, what data should you rely on? Every traffic source is doing its own analytics.

So, in order to get a clear overview of the effectiveness of your marketing efforts, you are looking for a system to get this. Without a lot of installation and expensive software. That is where Marketing Attribution Tools come in.

3. Marketing Attribution modeling

So, when looking at the previous example of Michael buying his new sneakers; the next challenge is to determine which of those traffic sources is most important in that customer journey.

In order to do that, different attribution models are available. An attribution model is basically a calculation to determine which touchpoint will be credited for a sale.

A distinction can be made between single click attribution and multi-click attribution. Single click attribution credits one touchpoint (mostly the first or the last) for a sale. Multi-click attributes value to several touchpoints.

Click here to read why single click never worked.

Below some of the most common attribution models:

  • First Click attribution is crediting all of the value of a sale to the first touchpoint.
  • Last Click attribution is crediting all of the value of the sale to the last touchpoint.
  • Linear attribution is crediting every touchpoint in the customer journey evenly.
  • Time Decay attribution is increasing the amount of credit as the touchpoint is closer to the sale
  • Position based attribution is crediting a traffic source, based on its position. For example: giving 40% of the credit to the first, and 40% credit to the last touchpoint. The remaining 20% can be divided over the remaining touchpoints.
  • Algorithmic attribution (used by Facebook and Google) are attribution models where it’s kept secret which metrics are being used.
  • Custom attribution models can be created, as it’s actually just a calculation. An example of a custom attribution model is first click linear. With the custom first click linear attribution model the first touchpoint points receives the most value and then the value per touch point is linearly reduced.

Choosing a marketing attribution model is a complex and difficult task. And to be honest, there is no perfect attribution model. There is no one size fits all. Every organization is in a unique position and therefore, needs to look differently at their marketing attribution modeling.

Attribution models

4. Marketing Attribution Data Analysis

Even more important than choosing the right attribution model, is using attribution consistently and transform data into actionable insights.

When marketing attribution is done right, you’ll collect a lot of interesting data. But, analyzing the data in a correct way is just as important as collecting the data itself. There are a couple of things you want to keep into account when analyzing your data:

  • See your core business objectives as an essential part of your data analyzing process.
  • Follow Up your analysis with actions.

When looking at your attribution data, you want to be able to compare data at every possible level. For example, you want to be able to compare paid search vs affiliate, but also compare keyword X vs. keyword Y.

When analyzing marketing attribution data, it’s once again very important that a marketer is analyzing from the company’s view. What are the current goals, who are the customers we’re trying to reach, etc? As mentioned before, your company’s goals should be in line with your strategy.

Optimize before you stop
Analyzing your attribution data may result in the insight of some very poorly performing traffic sources. This may make you consider to stop using these traffic sources completely, in order to save money quickly.

But in reality, it’s almost always better to first check if you can optimize the traffic source.

For example, if your attribution analysis resulted in the outcome that affiliate X is performing very poorly. Instead of terminating your relationship with affiliate X; use the data to start the conversation. Tell affiliate X you’ve got a better view of your data and you noticed their poor performance. Tell them you’re giving them an opportunity to improve and let them know what you would like to see from them.

Another example could be a display campaign. If your Google Analytics data used to make you think that this source was performing very well, and now you see that is doesn’t, you should optimize the campaign and analyze the attribution data.

Click here to read more about using common sense in attribution.

5. What is a customer journey?

The customer journey is the key thing to understand when it comes to marketing attribution. The customer journey is the route someone travels, before making a certain action on your website. The example of Michael buying sneakers mentioned before is an example of a customer journey.

In the current marketing landscape, more and more different traffic sources are part of customer journeys. Where the landscape used to be dominated by direct and search traffic, nowadays many different traffic sources can be identified.

In general, these are the ten groups of main traffic sources:

  • Paid Search
  • Display
  • Organic Search
  • Direct
  • Email
  • Affiliates
  • Referring Sites
  • Paid Social
  • Earned Social
  • Owned Social

Within a customer journey, a customer goes through different phases. In the beginning of his journey he’s mainly considering different brands and at the end of his journey, the customer is more focused on choosing one (Mckinsey, 2015).

6. Marketing Attribution strategy

It’s been mentioned a couple times now, but remember; marketing attribution (strategy) is different for everyone. Therefore, it’s very important for an advertiser to have a critical look when coming up with an attribution strategy.

A couple of questions to ask yourself when creating your attribution strategy are:

  • What kind of business are you in? (for example, E-commerce, SaaS?
  • What are your targets? are you looking on improving brand awareness or do you want to increase the number of sales?
  • What kind of customers do you have?
  • How often do your customers return and how many new customers do you get?
  • Are you a well known brand or are you an unknown brand?
  • And is this the same in every country you’re active in?

Even though there is no one size fits all, some basics can be used for the foundation of your attribution strategy:

  • When you want to focus more and more on brand awareness, a first-click linear attribution model could help you with that.
  • When you want to increase sales under existing customers, a last-click linear attribution model would be a better fit to seduce your customers to come back and buy.

With these basics, you should take a closer look at your situation. Answer the questions and ask yourself more questions. make sure you have a critical and well-thought-out idea of your marketing attribution strategy.

7. Challenges of Marketing Attribution

The current market of marketing attribution is still facing some problems. But they shouldn’t be in the way of smart marketers, wanting to implement marketing attribution correctly. Read about the problems so you know how to tackle them:

  1. Many companies (even large enterprises) are still using a last-click attribution model. And why? Most of the time the answer is simply because that’s the default. As mentioned before last click is outdated.

  2. Dependent and intransparent tools are still being trusted by marketers. Google Analytics for example (how likely do you think it would be that Google Analytics would show you insights that are favoring other traffic sources like Facebook over Google?). And that should be changed. Smart marketers know that they need data that is transparent and independent. That’s the only way they can make reliable decisions.

A great example of why you should use an independent and transparent tool is the well-known problem of Facebook Ads and Google Analytics data not matching. Many marketers will be aware of this problem. The, sometimes extremely large, discrepancies, between Facebook and Google data.

Sometimes this has to do with Google and Facebook having the same names for different metrics. Therefore, it gives you, as a marketer, a wrong image of the data. Besides, both Facebook and Google use very different attribution modeling.

But in other cases, the discrepancy is hard to clarify. The differences in data makes the job of marketers more difficult. Therefore, marketers should use an independent and transparent attribution tool.

  1. Relying fully on data. But, to convert your data into concrete actions, difficult decisions have to be made. And, computer power is needed to transform data into insights. Then, insights have to be put into actions. With the current state of technology, people are much better at this than computers. You should always use your common sense.
  2. Focus on single customer journeys, instead of the traffic source. A lot of marketers and attribution tools are still focussing on single customer journeys. The customer journey of a single customer isn’t giving you any actionable insights. look at the bigger picture and analyze the traffic sources. When analyzing the traffic sources, you’ll see all the data of the traffic source, and you can make adjustments based on that information.
  3. ROAS is considered holy. Big management decisions are still being made, based on ROAS. That’s remarkable because a lot of ad waste can be hidden behind ROAS. Marketers should be smarter and take incrementality into account. Read this article if you want to know more about ROAS.
  4. The search for perfection. Many marketers are still looking for the perfect solution when it comes to attribution. There is no perfect solution. All marketing tools and all marketing models will be a bit messy. That’s because every customer journey is unique; so a one size fits all solution will never happen.
  5. Marketing Attribution is complex and difficult to implement.” That’s the idea most marketers still have. Nowadays marketing attribution can be set up easily and reading and using the data can be as simple as you expect. Read 5 tips before you start.

8. Marketing Attribution Metrics

When working with attribution, you’ll get to know some new metrics. We’re here to provide you with an overview of some of those metrics.

Metric Meaning
Single-Touch Single touch is being used for attribution models that only credit one touchpoint in the customer journey for the event or sale. Examples are first click and last click.
Multi-touch Multi-touch is being used for attribution models that credit multiple touchpoints in the customer journey for the event or sale. Examples are linear and time decay.
Incrementality Incrementality is the extent to which a sale can be attributed to a specific traffic source expressed as a percentage
Customer Journey The path a customer follows before he/she converts (consisting of one or multiple touchpoints)
Touchpoint A touchpoint is a point within the customer journey, represented by the traffic source a visitor to the advertisers’ originates from (for example Facebook).
Traffic Source A digital source that leads visitors (generates traffic) to the advertisers’ website (through ads, links, etc.).
Customer Journey Lenght in Clicks The length in clicks is a metric that can be used for attribution modeling and represents the average number of touchpoints within a customer journey of which the respective traffic source is a part of.
Customer Journey Lenght in Days The length in days is a metric that can be used for attribution modeling and represents the average amount of days in the customer journey of which this traffic source is a part of.
Customer Journey Density is the market share within a customer journey, expressed as a percentage.
Customer Journey Position The customer journey position is a metric that can be used for attribution modeling and represents the average position of a traffic source within the customer journey.

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