For a long time, the digital marketing industry has been using last-click attribution to govern the value of transactions.
What does attribution mean in the marketing world?
Attribution is the process of identifying a set of user actions, often referred to as “events” or “touchpoints” that contribute in some manner to a desired outcome and assigning a monetary value to each of these touchpoints. Marketing attribution provides an understanding of how the specific combination and order of marketing events influence an individual’s tendency to engage in desired purchasing behavior, known as a conversion.
The purpose of Vishal Agarwal’s article, “Demystifying the Concept of Attribution in Digital Marketing”, is to explain the advantages of leveraging multi-channel attribution in digital marking and how each channel should be valued based on its particular contribution to the desired consumer behavior. Traditionally, the most common method of attribution in the digital marketing industry is based on last-click, which is giving credit to the last channel a consumer clicked before “converting” or making a purchase.
Agarwal’s article discusses the various multi-channel attribution methods (equal weighting, time decay, & algorithmic) and how each method ensures all the channels before the last channel are given due credit based on their contribution to the conversion. The article makes it clear that multi-channel attribution is a holistic approach, meaning the total transaction value is held constant and is just reallocated between different channels. In other words, the total transaction value should be the same whether a firm decides to use the last-click method or one of the multi-channel methods.
Read Agarwal’s full article here to understand why any CMO that wants to optimize his/her marketing budget must approach multi-channel attribution as a necessity rather than a luxury.