Creating Funnels, Calculating ROI
Whether you work in marketing for a big company or you’re a small business owner, you need to understand marketing attribution. The term might not be as popular as some marketing jargon, but you understand the idea behind it. Marketing attribution is giving credit to the marketing that you think turned a person from a website visitor into a customer. It helps you decide where to put your money to get more customers and helps you get a clearer idea of what your ROI is on different campaigns or platforms.
What Actually Makes you Money?
There are several different ways to measure your marketing attribution and each one is useful in different situations. Here’s our rundown on the main models you’ll see:
- First and Last Touch Attribution (or Single Touch) – Starting off simple. The First Touch or Last Touch model attributes the revenue earned from the customer to either the first action that brought the customer to your site or the last action before their conversion. It could be clicking on a branding ad (possible first touch) or seeing a remarketing ad (possible last touch).
- Linear Attribution – Takes all the steps in your marketing funnel and gives them equal weighting. So if your marketing funnel looks like this: PPC Ad > Downloadable PDF > Phone Call > Free Demo. Each step would get 25% weighting. This model ensures you share the credit equally with all the steps it took to make a customer.
- Time Decay – Works backwards from when the conversion is made, reducing the weighting according to the distance from the conversion. If we take the same example from above you could have PPC Ad (10%) > Downloadable PDF(15%) > Phone Call (25%) > Free Demo (50%). This is based on the idea that what caused the conversion is the most important thing and that everything going backward from that point is less important.
- Position Based – Is a hybrid of both the Single Touch model and the Linear Attribution model. It gives some weighting to what happens in the middle of your marketing funnel, but more weighting to the beginning and end of your marketing efforts. This revolves around thinking that it’s most difficult to get someone in the door, or to get them to sign on the dotted line.
Which Marketing Attribution Model Works?
These models all have their pros and cons. The longer your marketing funnel–or the more touches you have with a customer before they purchase–the less useful Single Touch attribution is. If you usually send 4 or 5 emails to a customer and then post a buyer’s guide, does it make sense to ignore the emails when they convert reading the guide? No. So a more complex model is needed. However, if your customers usually make a purchase straight after visiting your site for the first time, building a Time Decay attribution model is a waste of your time.
Have you implemented a marketing attribution model in the past? If you have, did it help you get a greater idea of how to get more customers?
How can we help?
Do you have trouble tracking all of your different marketing campaigns? Which campaign gets you the most customers?
We are Spectrum Group Online, and we offer strategic and tactical consulting so you can monetize your online presence. Call us for a complimentary 30-minute consultation to discuss your website’s user experience and translate that into sales.