Here’s What 10 SaaS Marketers Have to Say About Marketing Attribution
Attribution can make your marketing strategy 15 to 30 percent more efficient–but only if it’s done correctly.
So, how can you get marketing attribution right?
This is the question all marketers find themselves asking from time to time.
The answer lies in understanding the concept, choosing a model that’s suitable for your business, and tracking the right metrics.
This may all sound like a lot, especially if you’re new to marketing attribution. But don’t get overwhelmed just yet! 10 SaaS marketers have shared their opinions on the attribution process, so that you can use their expertise to improve your marketing channels and ROI..
Ready to learn from their experience and change the way you approach marketing attribution forever? Let’s get started!
But first… what is marketing attribution?
One of the main goals of any business is to get more customers. Strategies like marketing attribution are tailored to help businesses achieve this goal and understand what causes them to achieve it.
Attribution evaluates each marketing touchpoint, ranging from website clicks to email engagement, to find the most effective strategies for converting customers. This helps you do more of what works and spend less on what doesn’t.
Let’s look at how attribution helps businesses acquire more customers in an example.
Say that you’re a new business in the industry. Before you’re able to convert people into customers, you have to create awareness around your business so that people trust you. Then, you have to show prospects that your services are worth considering. And then, you have to tell them that you’re better than your competitors.
Finally, they may consider buying your product–but they’ll still need some convincing.
You see that converting customers requires effort. This effort is put into your company’s content, email, and social media marketing, as well as SEO and PPC strategies – among others – which help get customers’ attention and allow you to make your first sales.
Since you put so much effort into your marketing strategy, you’ll want to know which channels and techniques get you customers.
That’s where attribution comes into play.
In order to evaluate touchpoints properly, though, you should use attribution models. These models assign value to one or multiple touchpoints in prospects’ journeys so that you can better analyze their performance.
There are several models to choose from, and as you’ll see, choosing the right one is often among the main challenges of marketing attribution.
What are some marketing attribution models?
To find a suitable model (or models), you should first know about the advantages and disadvantages of each one. While exploring these details, it’s helpful to see how they play out in an example.
In this article, I’ll be using the example below so that you have a better understanding.
Say that your brand is following an inbound marketing strategy,
- SEO: One of your leads comes across the name of your brand after searching for content marketing analytics on Google,
- Email Marketing: The lead looks at other pages on your blog and then signs up for your weekly newsletter. One of your emails convinces the lead to try out the demo of your product.
- Social Media: The lead comes across a post on Instagram that redirects them to your website. There, they read a new article.
- PPC Ads: Your lead engages with your retargeting ad on LinkedIn. The ad takes them to the sales page of your tool, where the lead looks at the pricing plans available.
- Direct Search: After a few days, the lead searches for your pricing page again and gets in contact with sales, later becoming a customer.
Marketers deal with journeys like these – and even ones that are much more complex and long – on a daily basis. Often, they get help from one of the five popular models below.
What is the Last-touch Attribution Model?
The first one of these five models is a single-touch model. Single-touch models assign credit to only one of the touchpoints in a prospect’s journey.
As its name suggests, the last-touch model assigns credit to the last step before conversion.
So, using a last-touch model in the example would assign all of the credit to the direct search, where the prospect looked at your pricing plans once again.
Pros of the Last-touch Attribution Model
- It’s suitable for companies with short sales cycles
If you’re sure that your prospects aren’t converting after numerous interactions with your brand, the last-touch model may be a good fit.
This is usually the case for retail brands that don’t need to create awareness and build trust, but it may also be the case for some SaaS companies.
- It’s straightforward
Tracking last-touch attribution is simple and doesn’t require extra features on attribution modeling apps. Most attribution tools like Google’s Analytics offer this attribution model as a free default.
Cons of the Last-touch Attribution Model
- It ignores customers’ complex journeys and other marketing strategies’ performances
Unfortunately, simple models tend to leave some touchpoints unaccounted for.
In the case of the last-touch model, marketers may fail to consider that SaaS customers interact with brands multiple times before purchasing as they go down the SaaS marketing funnel. This is a downside common to all of the Single-Touch Attribution Models.
So, in the same example, since all the credit is given to the last touchpoint, you cannot analyze the return of your SEO, email, social media and PPC strategies.
- You can’t account for the initial interactions’ importance
The last-touch model makes it harder to “account for awareness and interest – this focuses entirely on action and BOF [bottom of the funnel],” as Cloudways’ Manal Yousuf says.
What is the First-touch Attribution Model?
The First-touch Model is the opposite of the last-touch model, but they share most advantages and disadvantages.
Another single-touch model, the first-touch model only takes the first touchpoint into account while analyzing conversions.
When you apply this model to the same example, all of the credit will go to your SEO strategy. So, your lead will be said to have come in from the article about content marketing analytics.
Pros of the First-touch Attribution Model
- It’s good if you’re working on demand generation
. Since this model focuses on the initial contact, it shows your company how customers discover your business. So, you could use this model to test different platforms’ efficiency in generating demand and brand awareness.
- It’s straightforward and good for short sales cycles
Businesses with short sales cycles and those new to attribution modeling may prefer the first-touch (or last-touch) model.
Cons of the First-touch Attribution Model
- It’s too simplistic
As stated earlier in the last-touch model section, if your main objective is to optimize customers’ journeys as a whole, and if you’re not only focused on direct marketing, this model is not the best fit.
Like other single-touch models, this model doesn’t consider the other steps (such as PPC, email marketing, etc.) that lead to conversion.
What is the Linear Attribution Model?
Most SaaS companies want to analyze multiple touchpoints at once, and if you’re one of them, multi-touch models are built for you.
Also known as Multi-channel Attribution, multi-touch models credit several touchpoints for their contribution to conversion. The amount of credit they give to different points varies.
The Linear Attribution Model is the first of the multi-touch attribution models. Unlike the other multi-touch models, the Linear model assigns equal credit to each touchpoint.
Following the same example, the linear model would assign 20% of the credit to each touchpoint. This means that SEO, email marketing, social media, PPC ads, and direct traffic would all get 20% each.
Pros of the Linear Attribution Model
- It’s a good starting point for multi-touch attribution
Instead of optimizing a single stage of the customer journey (as you would with the first and last touch models), you can detect and improve each touchpoint with the linear model.
Since you don’t need to analyze the weight of each different touchpoint, you don’t need advanced analytics capabilities, which is why this model is a great starting point.
- It’s useful for companies with long sales cycles
With the linear model, you can ensure that all touchpoints in the customer journey are captured.
Cons of the Linear Attribution Model
- It’s harder to get insight into individual marketing channels
The Linear model is the most simplistic multi-touch model.
As it allocates equal weight to each touchpoint, it’s harder to assess the individual performance of marketing channels. The Social Effect’s Eben Meyer agrees and says that at their company, they “still don’t get a clear picture when drilling down on which parts of the buying group are being influenced by [their] FB/retargeting, for instance.”
What is the Time-Decay Attribution Model?
The Time-Decay is a more sophisticated multi-touch model, assigning more credit to the stages closer to conversion.
So, in the example, this model would allocate 10% to SEO, 15% to email marketing, 20% to social media, 25% to PPC ads, and 30% to direct traffic.
As the name suggests, the amount of credit a channel receives decreases with time.
Pros of the Time-Decay Attribution Model
- It takes into account the different weights of each touchpoint.
The Time-Decay model assumes that the touchpoints closer to the conversion are more likely to drive sales.
Taking the example from earlier on, the time-decay model recognizes that SEO was necessary for your brand to gain awareness but didn’t contribute directly to the sale. It also assumes that the PPC ad had a more significant impact on the lead than the email.
Cons of the Time-Decay Attribution Model
- It’s not 100% accurate
While this model is more accurate than the previous ones, you can still argue that it doesn’t give enough credit to the initial steps. This is especially a problem for long sales cycles.
Mailshake’s Nico Prins agrees. He uses this multi-touch model and says that “It’s an imperfect system…that’s an issue if you’re working with companies with long lead times.”
What is the Position-Based Attribution Model?
The Position-Based model, also known as the U-Shaped Attribution, is the last model I’ll talk about in this article.
This model assumes that the first and last interactions affect conversions, assigning 40% credit to these two touchpoints. The rest of the touchpoints get the remaining 20%, divided equally.
Pro’s of the Position-Based Attribution Model
- It recognizes the different weights of each touchpoint.
While this is a benefit common to both multi-touch models, the position-based model better recognizes the importance of brand awareness. This is because the conversion is ultimately dependent on the first encounter.
If the lead hadn’t come across your brand then you wouldn’t have had the opportunity to move them further down the funnel through email marketing, social media, etc..
Cons of the Position-Based Attribution Model
- It underestimates the touchpoints in between
While SEO and the retargeting ad played a significant role in converting the lead to a customer, the email marketing strategy got the lead to try out the demo of the product. This demo may well have been why the lead decided to buy your product. Dedicating equal weight to this email and social media is simply inaccurate.
Unfortunately, no marketing attribution model is perfect. They all come with blind spots and inaccuracies. However, if you know what you want to analyze, you can choose the model that’ll help you improve marketing performance and minimize errors.
For instance, if you want to focus on brand awareness and improve the first touchpoints in customers’ journeys, you know that the first-touch model will work best. This model will do the job even if it doesn’t focus on the later touchpoints.
You can also benefit from additional models and attribution forms, as FileStage’s Radu Vladislav does. At FileStage, on top of using a U-shaped attribution model, they “rely on self-attribution forms to get a bit more data.” This helps them account for any gaps in their analysis.
Which marketing attribution models are commonly used?
Even if there’s no perfect attribution model, using one is always better than asking customers where they found you. Relying on customers’ memories often misleads marketers or leaves them with “I don’t know” as an answer to their question.
This isn’t a bad sign, as Marpipe’s Jess Cook says. “I know I’m doing my job well when someone actually doesn’t remember how they heard about us. They saw an ad, they saw a LinkedIn post, they heard someone from Marpipe on a podcast … it means we’re in many of the right places, surrounding people with our message, and we’re not relying on any one channel to do the heavy lifting.”
Visibility is excellent, but it makes marketers’ jobs harder, and asking prospects about their journey is sometimes fruitless.
That’s why marketers agree that using a model is better than not, but there’s no consensus regarding the best model. However, the chart below shows that some are preferred more than others.
Note that 20% of the surveyed marketers responded under the “Other” category. This category includes some of the multi-touch models like the U-shaped and time-decay.
Just because a model is popular doesn’t mean it’s the best fit for your business, though. Popular models may be a good starting point, but ultimately you should decide on the model that works for your business.
How can you attribute ROI to marketing?
Finding a suitable attribution model can get you far, but it won’t tell you all about the ROI of your marketing channels. That’s why marketers have additional strategies for attributing ROI to marketing.
Some marketers, including Nnadozie Anyaegbunam from UserGems and Nico Prins, look at the number and performance of touchpoints.
Others, like Romana Hoekstra from Leadfeeder, choose a more quantitative route. Romana cites the simple ROI formula, “sales growth (or decrease), minus marketing costs, divided by marketing costs.” She also explains how you may use this calculation while attributing ROI to marketing.
“Let’s imagine you’re running a marketing campaign for a SaaS product. And you have growth in sales. Let’s say you got 5,000 monthly sign-ups and 500$ marketing expenses per month. You take the sales growth and the marketing cost, subtract them from your revenue, and then divide them by the marketing cost. The resulting number will help you to understand how much higher a return on investment you got from your marketing campaign.”
Calculations like these are beneficial when comparing your current performance to past months.
What if you want to attribute ROI to your long-term marketing strategies, such as SEO or content marketing? Then, you can look at the increase in organic traffic like Rafael Garcia Francisco from JivoChat does. Rafael says that at JivoChat, they “can attribute ROI by measuring [their] organic traffic growth, as well as by making sure [they’re] hitting internal KPIs for [their] conversion funnels that do involve [their] content.”
And lastly, if you have a product lead growth (PLG) strategy, you can follow the footsteps of Usersnap’s Klaus Schremser: “As a PLG company…we attribute Customer growth / MRR to marketing.”
Again, the strategies will change based on the analysis you want to perform.
What are the top 3 metrics that need to be measured for marketing attribution?
You may have noticed that many attribution strategies involve tracking a SaaS marketing metric, be it website traffic or touchpoints. Below are some of the metrics that are widely used for this purpose.
Conversions measure the number of customers that complete a goal. This goal is often making a purchase, but other actions can also be counted as goals.
Short for monthly recurring revenue, this metric measures the amount of repeating revenue for businesses.
As the name suggests, it measures the number of clicks an ad gets.
The customer lifetime value measures the total profit a customer brings to a company during their mutual relationship.
An impression is a measure of the number of times that an ad or post has been seen.
- Social Engagement
The number of likes, comments, and shares on social media are all a part of Social Engagement.
- Account Based Touchpoints
The number and type of customer touchpoints are used as an attribution metric.
- Qualified Meetings Booked
A qualified meeting is a meeting between a sales rep and a lead who has demonstrated interest in your product.
- Media Consumption
Interacting with media by liking, watching, or viewing counts toward media consumption.
Just like attribution models, some of these metrics are more popular than others. We’ve asked ten marketers what their top 3 metrics are when measuring attribution, and conversions, MRR, and clicks got the most votes. These are all easy-to-track metrics, especially with analytics software like HockeyStack.
How can you account for offline conversions with the marketing attribution model you use?
As I’ve stated in the beginning, one of the primary purposes of metrics, models, and marketing attribution is to understand how touchpoints contribute to conversions.
But what if the conversions take place outside of your website? What if a user signs up for your free plan by making a phone call? Would attribution still be able to account for their journey?
These offline conversions make attribution tricky. To tackle this challenge, Nnadozie Anyaegbunam and Jess Cook, who use single-touch attribution models, ask customers where they first heard of their brand. This helps them understand the first touchpoint in customers’ conversion journeys, even if there could be a recency bias in responses, as Nnadozie says.
On the other hand, Spear Growth’s Ishaan Shakunt doesn’t think that using only one single-touch model is helpful. He uses the last-touch attribution model but says they’ve “found using a single attribution model [to be] very inefficient” and that to measure offline conversions with another model, they “need to add it separately.”
Your strategy may differ, but if you don’t have a way of tracking at all, you’re missing out.
Accounting for offline conversions is crucial for accurate attribution. You can’t understand the ROI of your marketing efforts without including these conversions in your analysis: a seemingly fruitless campaign may bring in customers that your attribution strategy isn’t taking into account.
Is marketing attribution directly linked to more revenue?
Tracking offline conversions, finding good models, making up for the holes in data… all of these strategies should have some sort of return. However, 40% of surveyed marketers believe this effort isn’t necessarily linked to more revenue.
Then what do these marketers get out of attribution? You may ask.
Marketing attribution isn’t only used to increase revenue and ROI. Attribution can also be used for the reasons below.
Adjusting Your Marketing Budget
Once you know the channels that bring in customers, you can decide on the campaigns that deserve your money and allocate your resources accordingly. You don’t have to waste money trying out different channels and playing the guessing game. While this may not translate to increased revenue, it saves you time and resources.
Even if attribution data (or any type of data, for that matter) isn’t used to increase ROI or revenue, it can be used in your business’s decision-making processes.
For instance, by looking at attribution data, executives can better understand the marketing strategies gaining popularity and hire talent specializing in this marketing area.
Helps You Understand Your Audience
The type of content that users engage with tells you a lot about their demands and interests. By analyzing attribution data, teams can define their customer profiles in more detail.
In short, attribution may not always result in more revenue, but this doesn’t make it less critical.
If all marketers were to agree on anything, it would be that finding the right attribution strategy is a complex process. It requires finding suitable metrics and tools, and picking the correct method for your business.
Again, there may be no perfect strategy, but using different models for different needs will ensure that you don’t miss any opportunity of improving your ROI.