Building effective attribution solutions

Attribution, also known as “matchback”, is the process of allocating or attributing sales or other responses (point/coupon redemption, product registration, social channel follows, etc.) to a single campaign, channel or combination of both. Attribution solutions typically assess the impact of direct-to-consumer channels, such as direct mail, email, display and social channels, on sales in order to understand return on advertising spend. All marketers want to optimize returns on these investments and the first step is to understand how different initiatives contribute to a brand’s overall business objectives.

Identifying which campaign(s) deserve credit for a given transaction has become increasingly difficult. Twenty years ago, attribution efforts generally had to solve for one or two direct mail touches and perhaps phone calls. Today, marketing programs include promotional and triggered emails, display ads, push notifications, SMS and social ads. Consumers also transact via search, without the influence of advertising. Calculating the impact of direct marketing on the bottom line requires the right tools and experience.

There are generally three types of attribution:

Last Touch attribution assumes the campaign immediately prior to the transaction is responsible for the transaction. For example, if a consumer receives two pieces of direct mail followed by an email prior to making a purchase, Last Touch attribution gives all credit to the email and no credit to the preceding direct mail initiatives. But in order to provide the most thorough view, this scenario would benefit from additional business rules to consider the influence of direct mail on purchase behavior.

Fractional attribution assumes multiple campaigns influence a transaction. The credit for the sale is attributed across campaigns through weighting. There are generally two types of weighting:

Equal weighting, which attributes the same level of influence to multiple campaigns

Unequal weighting, which attributes different levels of influence to each campaign. For example, through analysis we can determine that:

• promotional emails have more influence on purchase behavior than informational emails, and/or
• communications occurring just days prior to a purchase have more influence than communications occurring weeks or months prior to a purchase.

Media Mix attribution is the most sophisticated methodology of the three, as it is based on predictive equations which estimate the impact of each marketing initiative on sales or other types of response. As opposed to business rules used in Last Touch and Fractional attribution, Media Mix models and equations consider marketing from all channels, including non-direct ones such as search, affiliate programs, TV and radio. The equations are used to assess impact and assign the appropriate share of sales to each promotion. Media Mix does more than determine attribution; it serves as a tool to optimize marketing budgets based on changes in spend for each channel

The following table assumes a consumer spent $100 with brand X on February 3^rd; the consumer received four marketing campaigns within one month of the purchase (on January 5^th, 10^th, 15^th and February 2); and the consumer used search the week prior to the transaction (Jan 26 – Feb 2).

• Last Touch attribution assigns 100% of the sale to the February 2^nd campaign.
• Fractional attribution, using equal weighting, assigns 25% of the $100 sales to each of the four campaigns, but not search.
• Fractional attribution, using unequal weighting, assigns 40% of the sales to the February 2^nd campaign, 30% to the January 15^th campaign, 20% to the January 10^th campaign, 10% to the January 5^th campaign, and 0% to search.
• The Media Mix attribution, which is based on a model, produces weights and allocations that include the influence of search.

It depends on the complexity of your marketing environment, frequency of communications across channels, and the resources (time and cost) available to develop the right attribution model. When choosing an attribution solution, consider the following:

• Last Touch attribution is the simplest of the three approaches and requires the least amount of time and cost to develop. Last Touch is only appropriate when attributing to a channel where marketing campaigns are relatively few and infrequent, such as direct mail. Due to the heavy emphasis on most recent touch, scenarios involving high communication frequency can produce misleading results.
• Fractional attribution is applicable to direct-to-consumer channels and is especially important for brands with high campaign frequency (e.g., marketers who send a lot of emails). The approach assumes all (or most) promotions deserve at least some credit for the transaction. The level of effort depends on the complexity of the communication history and weighting approach. Equal weighting is simplest and requires the least amount of time; unequal weighting is more complex and requires customization.
• Media Mix attribution is appropriate for brands that want to gain a comprehensive view of the performance of all marketing channels, including non-direct-to-consumer ones. While Media Mix attribution is typically most accurate, developing the model is often costly and requires a bit of patience to build.

Partially. Good attribution gives marketers a solid indication of return on marketing spend. However, assessing incremental value generated by a specific campaign requires test design and the use of control groups. For more information on test design, check back to our Ask the Expert page for an in-depth post on the topic.