Attribution Modeling for Ecommerce: 5 Things All Sellers Need to Know
I’m not going to lie to you: this can get very tricky. It’s so complex that many ecommerce platforms don’t even bother with it.
An attribution model is how you assign credit or value for sales and conversions across various customer touchpoints. It includes all your digital channels – paid search, display, email, social media, organic search, referrals – and the impact that each one has on the eventual conversion.
In the good old days, this was easy. You ran a radio ad, for example, and that brought in five new customers worth $250. That one touchpoint – the ad – got 100% of the credit for those sales. Simple.
But today? According the Content Marketing Institute’s annual report, marketers use an average of 13 tactics, seven different social media platforms, and three paid advertising channels in their efforts.
The route people take to find out about you, learn about you, and ultimately buy something from your ecommerce store can be long and convoluted. Your sales funnel can be big…very big.
How are you supposed to keep track of effectiveness?
But just as the tactics, strategies, and channels have gotten more complicated, so too have the models to assign value to them. They can be basic and rules-based, or elaborate and algorithm-based. Single-touch or multi-touch.
In fact, there are at least five different models that are widely used, and even more depending on how you define and break them down:
- First Touch (aka First-Click) assigns 100% of the credit to the first touchpoint in a conversion path. This is great for insight into how people find you (and the top of your funnel), but if they hit three other touchpoints before converting, does it really deserve all the glory?
- Last Touch (aka Last-Click) gives the very last touchpoint full credit, no matter how many others they may have traversed. Easy to track and set-up, but almost universally considered worthless nowadays. There’s too much going on beforehand, and it gives zero notice to the top and middle of the funnel activities.
- Linear assigns equal value to each step in the conversion path. If a customer traveled through four touchpoints before buying, each would get 25%. This is better – every point is considered and valued – but it tends to overvalue minor ones and undervalue key touchpoints.
- Positional favors both the first and last touch – typically giving them each 40% of the credit – while dividing the remaining 20% amongst the middle touchpoints. Obviously, the model can drastically undervalue the middle, especially in a long path.
- Time-decay is a simple algorithmic model that gives most credit to the point closest to conversion, and increasingly less as you move away from it. While it still favors the last touch, it does give some kudos to every step along the way, and as such, it’s the preferred model for many marketers and business owners.
And I haven’t even mentioned your best bet: the custom option (a model based on your platform, …read more
Source:: Kiss Metrics Blog