Attribution Modeling, or the ability to connect a sale with a specific marketing effort, is a hot topic. But the model is flawed. In this podcast episode, Elizabeth and Steve introduce Contribution Modeling, a well-rounded way to measure the ROI of our marketing tactics.
In this episode, we discuss…
What is Attribution Modeling (3:31 – 5:09)
- A measurement for return on investment (ROI) for marketing at the tactical level
- Three common models include:
- Last-Touch Attribution: the last marketing tactic a prospect touched before they became a sale
- First-Touch Attribution: the first marketing tactic a prospect touched before they became a sale
- Multi-Touch Attribution: spreading revenue across multiple touchpoints based on weight or importance in the customer journey
Why Attribution Modeling is Flawed (5:10 – 9:50)
- All marketing tactics work together and support each other, but marketers are in the dark as to how.
- If revenue is divided between marketing tactics, it doesn’t tell the full story. Without any one tactic, other marketing tactics will be hurt in the program.
- Example: If a Last Touch Attribution Model shows email converted the sale, it may wrongly suggest that all tactics before the email were ineffective.
Introducing The Contribution Model (10:38 – 13:30)
- This model asks: what contribution did a marketing tactic or touch point make to creating a sale? This can be answered by looking at what percentage of customer journeys have a touch point that resulted in a sale.
- Example: Do you have evidence that a sale can occur without someone reading a blog post?
How to Track Correlation (13:31 – 16:41)
- Data is needed in a third party system to track what marketing inputs and outputs were part of a prospect’s customer journey.
- Some marketing automation systems can use special automations to track this by appending tactics to the contact and account levels, indicating what touchpoints occurred on the journey.
But, There is a Catch (16:42 – 22:12)
- Marketers who create a consistent experience ensure every prospect hits an intended tactic. In doing so, they also made sure every sale includes the same tactics.
- This paints a picture that correlation equals causation, which isn’t necessarily true
- Example: One study found a correlation between people who like candy corn and those who are not concerned with home security.
- Luckily, most marketers aren’t perfect and purposely introduce inconsistency in their customer experience.
For more information on the charity in this episode, please visit Operation Homefront.