[Attribution Models for e-commerce] Learn the reasons why clients buy your products so you can optimize the best sales channels
Ads on social networks, content marketing, email marketing, retargeting, display ads…
You’ve tried everything to get new clients, but…
Do you know which method actually leads to completing a purchase? Which one gets clients to click and confirm their order?
If you know which channel is getting you the most sales, you can optimize it to boost those sales. It’s as easy as that!
So how can you find out which one works?
By reading this post and finding out what attribution models are and how they work.
Table of Contents
- What are attribution models and what do they do?
- What are the most common attribution models for e-commerce?
- Which attribution model should you use for your online shop?
- Other criteria related to attribution models to take into account
- Ready to assign attribution models to your online shop?
What are attribution models and what do they do?
Since this concept may or may not ring a bell, let’s start off with a definition:
Attribution models are patterns or rules that analyze the interactions made by users before they buy so they can state how important each channel or strategy is in the final purchase.
Let’s break that down a bit more since it can be confusing at the beginning. Imagine that you sell sports equipment.
Your client is looking for basketball shoes, so they start looking on Google.
At the same time, they’re also checking your competitors’ websites (they’re not ready to buy because they need more information).
A few days later, and thanks to your remarketing strategy, they’ll see an ad about the shoes while checking the NBA results in a sports newspaper. Later, while checking Facebook, the ad that appears on their wall is also the one from your shop.
However, they don’t buy it yet because they have to show them to their partner.
When they finally decide which model they want and since they have your website in mind (they’ve been seeing your everywhere!), they type your URL into Google (SEO positioning), they enter your e-commerce, and they place the order.
Why the attribution models are so important
And now, the million-dollar question.
- Which of those actions was the one that led to the purchase?
- Which one was the most influential on the final decision?
Which method should you invest in more in order to optimize your ROI?
This is what attribution models for digital marketing analyze and that is why they are so important. If you don’t know which action was the decisive one, how can you optimize your strategy?
Bonus track: added impact
Returning to your basketball shoes example, we mentioned that the client was seeing both display ads and Facebook Ads.
If they had also subscribed to your blog, you could have also sent them an email with your email retargeting strategy.
This is just for pros. 😉
What are the most common attribution models for e-commerce?
Pay attention because this party is just getting started. 😉
1. Last Click or Last Touch
This is the most widespread model and it consists of:
Assigning all the conversion value to the last point of contact, without taking into account any of the other places the client has passed through (this is the model Google Analytics uses by default).
However, the truth is this method provides you with very little information.
As an exaggerated example, we could say that it’s like declaring you have a university degree simply because you passed one exam from a fourth-year course – without taking into account what you did or didn’t do in previous years.
In the shoes example, credit would be given to the SEO positioning, but the truth is that clients received plenty of other input before making the decision.
This model would be excellent if you were launching a massive campaign to find out if the “final push” worked.
2. First Click or First Touch
From one extreme to the other.
For First Click or First Touch, all the credit for the conversion goes to the first click of the conversion process.
In our example, it would be the SEM investment so that our ad appeared first on Google.
Determining how your client found you is valuable information, but the rest of the process is completely ignored.
You can use it for new product launch campaigns or if you are just starting to put yourself on the map. This way you will be able to determine which channel was the one that captured your client’s attention.
3. Linear attribution model
In this case…
Each point of contact in the conversion process is given the same importance as the rest.
In our example we would have the following:
- Email retargeting
According to the linear method, 20% will be assigned to each of them.
This is the perfect method for those sales funnels designed to maintain frequent contact with clients and in which each marketing channel receives the same investment.
4. Position-based attribution model
In other words:
Taking into account the position within the conversion funnel.
In this case, more value is given to the first and last points, allocating them approximately 40% each, and splitting the rest among the other phases of the conversion process.
5. Time decay model
Attributes more weight and importance to steps that are closer to the conversion. Therefore, the steps at the beginning of the process receive less value.
This type of model is perfect for specific actions, such as Black Friday or Cyber Monday promotions, since we often make an extra effort with the last digital marketing actions those days compared to the few weeks prior.
6. Custom attribution model
And last but not least, the customized version, which includes:
Giving each step a percentage of the success according to your own business.
This is the option offered by Google Analytics in their Google Attribution tool that allows you to better analyze the importance of each marketing action carried out over many channels and devices.
Basically, it’s a model that does not limit the information to the Last Click. 😉
Google Attribution can be integrated with:
- DoubleClick Search
This way it can combine information from all those channels and you can have an overall view of all the actions and their respective performances.
In order to set it up, you need to go to the Google Marketing Platform and establish the connections between the different available products.
Google explains how it works in this video:
Which attribution model should you use for your online shop?
This is a difficult question to answer.
Apart from very specific situations (a flash offer or a very cheap product), users don’t normally buy after only their first contact – they normally surf and get informed first.
There isn’t an ideal attribution model for each business, because they each have their limitations.
The better route to take is to start with the models offered by Google Analytics by default. Ideally, you’ll start by customizing your model to fit the needs of your specific e-commerce shop. You need to take your clients, sector, goals, and the budget assigned to each marketing action into account, among other things.
If you get lost with all the options provided by Google Analytics, here you have a mega tutorial to help you understand the huge amount of metrics.
As if everything we’ve already seen wasn’t enough, there are two other factors that you should bear in mind.
1. Multi-channel attribution
That is to say, if your digital marketing efforts are also at work in the offline world and vice versa.
For example, if clients decide to go your physical shop (if you have one) and buy the basketball shoes there after having seen your ad on Google.
If you don’t measure the impact of your investment on physical sales, you are missing out on information about the influence of the channel on the overall conversion.
2. Multi-device attribution
Your clients are using their smartphones to buy more and more while leaving their computers in second place. Actually, the most likely scenario is that your clients saw your shoes ad on Facebook while using their smartphone.
Users can be impacted on their computer, tablets, phones, or TV. How important is each of them?
This is a pretty complicated topic that we recommend avoiding for the time being, but it’s important to bear in mind its existence.
As you can see, designing the perfect attribution model takes time since it’s necessary to collect data and know how to analyze it in order to define the importance of each marketing action.
Ready to assign attribution models to your online shop?
Now that you know what attribution models are and why you need to use them, we just want to leave you with one last tidbit:
These models are not static, just as your business is also not static.
Your attribution model should evolve with your e-commerce in order to adapt to the new channels and strategies that you may be adding.
And now that you are completely ready, let’s get to work.
Just think that the sooner you identify which actions are responsible for your sales, the sooner you’ll be able to multiply them. 😉