Guide To Multi Channel Marketing Attribution
SaaS marketing teams need to understand the complete picture of their sales and marketing efforts so that they can adjust or change marketing strategies accordingly. It is crucial to track and analyze the sales process from different angles: from where your customers come from to how they purchased your product. The seemingly minute details in the entire process give marketers the information to enhance their strategies and increase the chance of winning more customers.
Multi-channel attribution is the process of tracking marketing channels to understand when, where, and how prospects become leads. This article will give you an overview of multi-channel attribution and some pros and cons, helping you understand one of the essential processes behind SaaS marketing.
What Is Multi-Channel Attribution?
Before defining multi-channel attribution, we need to look at marketing attribution. Marketing attribution is essentially a technique or process used to identify which marketing channels contributed the most towards converting a lead.
Multi-channel attribution is a subset of marketing attribution, which acknowledges that customers are exposed to several different marketing channels throughout their purchasing journey. Therefore, this system helps you consider various aspects/channels that might affect your conversions and sales and give you a better idea of how to improve your marketing plans.
What Are The Most Used Multi-Channel Attribution Models?
There are various multi-channel attribution models, each of which uses a different system to assign values to touchpoints. Because each model is specific to different needs, you need to be careful to choose the one that your product/service will benefit more from.
Here are some of the most used models:
Linear Attribution Model
The linear model is one of the simplest marketing attribution model because it gives each channel equal credit in converting a lead. In other words, the effect of a channel is ignored, and all of the marketing channels are assigned the same value.
For example, if there are four touchpoints throughout a customer’s purchasing journey, the linear model attributes 25% of the value to each touchpoint.
In this model, rather than the magnitude of the effect of a specific channel, the presence of that channel is much more critical. Therefore, the linear model is helpful if you want to see every single marketing channel. However, this is not the best model if you’re going to zoom into each channel and get insight into them.
Time-Decay Attribution Model
The Time-Decay model is an attribution model dependent on “time.” It assigns more credit to touchpoints closer to the point of conversion or sale, meaning it considers the most immediate touchpoint the most valuable and influential point for the purchase.
This model is mainly used for B2B SaaS companies, which have longer sales cycles than other companies. This is based on the notion that longer sales cycles mean that there would be a lot of touchpoints throughout the cycle, the last one will be the one that would have the most effect on the purchase. Therefore, using the Time-Decay model can help you accurately assess your B2B marketing strategies.
Position-Based Attribution Model
Position-based model, in other words, “U-shaped attribution model,” is like the combination of first touch attribution and last-touch attribution, which are single touch attributions. In this model, most of the weight is assigned to the first and last touchpoints, and the rest is distributed equally to the touchpoints in between.
The basic concept behind this model is that the first touchpoint leaves an impression for sale and the last touchpoint promotes the sale. This model can be used if your marketing teams are clear about the journey of your customers and okay with assigning the same value for all the channels in between the first and last touchpoints. If not, this model might not be best suited for you.
Unfortunately, there is no one-size-fits-all model for marketing attribution, and each model comes with certain advantages and disadvantages. However, all multi-channel attribution models are much more comprehensive than single-touch models and can give valuable insights into your marketing strategy that you cannot get with single-touch models.
Why Are Single Touch Models Not Enough?
The main disadvantage of single-touch attribution is that it assigns 100% responsibility for sales or conversions to a single marketing channel. In other words, it ignores different possible touchpoints that might affect the overall process of purchasing and customer behaviors. Therefore, while analyzing specific marketing strategies with single-touch models, you can get inaccurate results that can affect the overall success and online presence of your service/product.
In the past, single-touch models were popular. However, today, these models become less relevant because modern consumers are exposed to many different touchpoints that can influence their purchase cycles. Therefore, single-touch models, like the last-touch model, don’t reflect the reality of a marketing strategy and the effect of different marketing channels.
Similarly, ignoring the middle touchpoints might cause you to miss essential marketing channels that drive your sales and conversions. This would cause you to wrongly assess some points, assigning values that might not reflect the truth. Therefore, using a multi-channel attribution can help you eliminate these errors and give you a better understanding of which channels drive marketing.
Common Disadvantages of Multi-Channel Attribution
Even though multi-channel attribution can be a good solution for tracking different purchasing cycles of modern customers, it is not error-free. Like all systems, multi-channel attribution comes with some common disadvantages.
Connecting Online and Offline Attribution
As the internet progressed, marketing started to run on internet-dependent strategies. However, ignoring offline communication like telephone calls would be a massive mistake because many companies rely on face-to-face communication or phone calls. Primarily, industries like real estate and legal firms depend on offline attribution.
The problem of multi-channel attribution is that, still, it cannot connect online and offline touchpoints, meaning it is unable to analyze those two as a whole. The particular disadvantage this brings is that you cannot make accurate and effective decisions about marketing strategies without seeing the complete picture of different marketing channels (both online and offline). This might cause you to miss essential touchpoints that are not giving enough value or lose money and time on marketing channels that don’t progress to leads or conversions.
Shortness of Attribution Window
Most web analytics tools provide you with, on average, 90 days lookback window. In other words, you can only see the attributions over 90 days. This might not seem short, but if your product/company depends on long sales cycles, 90 days are not enough. Even though multi-channel attribution models like the Time-Decay model are beneficial for these companies, they cannot offer a total solution.
A short attribution window can cause you to overlook or underlook marketing channels. Therefore, you might not correctly analyze your strength and weaknesses, resulting in ineffective and money-consuming marketing strategies.
Lack of Visitor-Level Conversion Data
Confusing conversions with revenue is a mistake that can be made easily because we assume each conversion brings the same amount of revenue. However, the reality is not like that: each customer brings a different amount of revenue, contributing to the overall revenue in different percentages. That is because different sources, touchpoints, and channels acquire different types of customers with different LTVs and revenue.
For example, even though email marketing might lead to more conversions, social media posts might bring customers higher revenues. Therefore, assessing these distinctions helps you save money, time, and effort in the long run.
The problem with multi-channel attribution is that it doesn’t deal with visitor-level data. It just tracks different marketing channels that ultimately lead to conversions. Therefore, you cannot understand what type of customers you attract and how much they contribute to your overall revenue. This crucial disadvantage can cause you to miss out on important details about your marketing channels and overall audience profile.
Multi-channel attribution models are crucial parts of understanding marketing channels and how they affect marketing strategies. Without these models, you cannot get a complete picture of different touchpoints and how they interact with other.
There are different types of multi-channel attribution models that assign values according to different variables. However, what makes all of them powerful is that they deal not just with a single channel but a combination of different channels, helping you analyze various marketing channels and decide on which one or which combination to pursue further.
Understanding these models and tracking different marketing channels can help you a lot in the long run as your marketing strategies get more complicated. Fortunately, tools like HockeyStack are just one click away.
By default it is, but you can create your own attribution models or they provide several common built-in models that you can compare results with if you have eCommerce reporting set up for revenue tracking.
The first interaction means the first touchpoint, which the “customer” and your product/service come across. These might be different marketing channels according to your strategy.
Multi-touch attribution tools are web analytics tools that help you track various marketing channels throughout customers’ sales journeys. These tools enable you to analyze and understand what drives leads and/or conversions and what types of marketing channels contribute more to conversions.