Why Attribution Models are Key to Understanding Your Online Traffic

SilverDisc Blog

24th March 2017

Understanding Attribution models

Knowing which channel your customers are converting on can be a useful way to inform other areas of your business strategy, especially budget allocation. However, it is often difficult to get a full picture of a user’s journey, especially if that user has been on a multi touchpoint journey before converting. Attribution is a set of rules which determines how credit for conversions is assigned. There are several attribution models which highlight which channels are most frequently used during different parts of the user journey. Deciding which channels or touchpoints are most valuable to your company isn’t simply a case of knowing where the final click before a conversion came from (although this is useful). It is also key to note which channel initially peaked your users’ interest and to understand the contribution of all touchpoints in-between. 

Attribution models

All the examples for the various attribution models will use this example conversion path. 

View a Display Ad > Click on a Paid Search Ad > View a Display Ad > Read a Blog Post via Facebook > Click on an Organic Search Ad

Last Click 

The Last Click model is the most commonly used model and is the default in Google Analytics. This model attributes 100% of revenue generated to the last customer touch point before the purchase or conversion.

Example: The last click model attributes all credit to the organic search ad, with no credit to any of the other channels.

First Click

The First click model is the opposite of Last click. It attributes 100% of generated revenue to the initial touch point. This isn’t a popular model as it ignores what many see as the key final touchpoint.
Example: This would attribute all the credit to the Display ad, again with no credit given to any other channel.

Last non-Direct Click
This model is similar to the Last Click model, apart from Last Non-Direct Click attributes 100% of credit to the final click, except where the final click is direct. This model works under the assumption that once a user has gone directly to your website, they have already made the decision to convert.
Example: In this occasion, the Organic channel would be attributed with 100% of the credit, even if there was a final touchpoint from the Direct channel.  

While previous models deem that a singular part of a customer’s journey is more important than others, the Linear model states that every step of a customer’s journey is equally important in their process to convert.   
Example: In a user journey with five touchpoints, each touch-point would get 20% of the revenue from that customer. So Paid Search, Facebook and Organic would all receive 20% credit, however, Display would receive 40% because it features twice in the journey.

This model takes in to consideration the entire customer journey. It acknowledges the importance of the initial interaction and the final interaction as well as the importance of any interactions in between. The last and first touch points are worth X and the remaining touch points are divided evenly between the touch points in between the last and first points.   
Example: Display would be attributed 40%, Organic would be attributed 40% and the remaining touch points would each be attributed with 5%.

Time Decay
This model works on the basis that a touch point is more valuable the closer it is to the final conversion and therefore is more valuable in the decision process.
Example: As the final touch point, Organic would receive the most credit, and any previous touchpoints would receive incrementally less credit until the first touch point (display) which is deemed the least valuable, because it is furthest away from the conversion.

Custom Attribution Models

These attribution models are most useful when used in conjunction with each other. This way you get a complete picture of how your customers are converting. Regardless of which model you choose to use, it is key to frequently look at which channels are both creating and assisting conversions, as cutting spend in these areas may mean that users don’t make it further down the conversion funnel. Google Analytics also offers the option to create a custom attribution model. These custom models can be altered to suit your business’s unique goals, and this assigns credit where you see most value. Before using the custom model, it is vital to have a solid understanding of the other models and which of these works best for your business. Understanding how your user interacts with your business and ultimately what drives them to convert is key to maintaining and growing your business. Attribution models are a vital tool in understanding where budget and time are best spent to get the most out of your online marketing.

At SilverDisc we are more than happy to help you reach your business goals with the use of attribution models. If you would like to know more about optimising your online marketing, please get in touch with us.

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