Definition:
An attribution model allows merchants to look at the set of ads that contribute to a sale or conversion over an extended period of time. This way, instead of the traditional method of crediting a sale or conversion to the last ad where it was clicked or viewed, an attribution model will attribute credit to each ad or “touchpoint” within the sales funnel.
Objective of attribution models
The goal behind attribution models is to get a complete picture of what’s happening across each marketing channel and understand the degree of influence each ad has on consumers’ decisions. By using an attribution model to track and analyze multiple touchpoints, marketers can gain new insights, optimize campaigns, and get a more accurate read about a campaign’s ROI.
How to choose an attribution model
The biggest challenge for creating an attribution model is identifying the amount of credit to be allocated to each attribution. In other words, a salesperson must determine the degree of influence to assign each touchpoint or an advertisement. Was it the initial ad that got the most credit, or was it the third ad in the sales funnel that was most influential? Determining this can be very difficult considering that there are many other contributing factors, such as the time of advertising, the speed of decline of advertising, what products were sold, the amount spent, etc.
A good attribution model must also take into account the uncertainty factor. Was the buyer recommended by a friend? Did you see the product in a magazine ad or TV ad?
In order to ensure accuracy in the credit attributed to each announcement, analysts must continuously test and recalibrate attribution models for extended periods of time. Only then will they be able to have successful models that allow them to make effective marketing decisions.
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