May 1, 2015, 3:31 PM

Choosing the right attribution strategy

Alex Lirtsman, chief strategist at digital agency Ready Set Rocket, explains how retailers can find the right attribution strategy for their business.

Any e-retailer or brand that wants a better understanding of its customer journey and the media-mix model that maximizes ROI needs to choose a marketing attribution strategy that complements its entire business model and maturity. This does not mean a model that favors one department over another, or one that gives credit to the loudest voice in the company. It means establishing a model that works across the typical customer journey to capture how a user is likely to learn about the e-retailer or brand and convert.

Many e-retailers and brands are using the wrong attribution strategies for their businesses. There are three organizational reasons for this:

Laziness: Also known as using the default attribution method in your marketing analytics software, and that’s typically last-click attribution (more on this later). This is the case of not even trying, and 60% of marketers live in this realm, according to eMarketer Inc. For most, making decisions based on that one touch point is akin to throwing out every dollar that does not result in a direct sale right away. It’s not only unsustainable, it’s plain lazy. Every analytics program, including the free version of Google Analytics, provides for a multi-touch attribution view.

Loudest voice attribution: It’s not the loudest voice of the consumer; it’s the loudest people or departments that have an attribution model that favors their channel. For those who sit at the end of the customer journey (email, paid, affiliate, etc.), it’s obviously in their best interests to show models that slant toward the end of the journey versus the beginning. Executives in charge of marketing typically come up through channels closer to the journey’s end to the detriment of the brand-building parts of the organization like social, content marketing and branding. 

Let’s all have a say: While this can seem like a compromise, this is probably the most flawed way of looking at performance. With this approach, everyone reports their own numbers but nothing seems to add up. Literally. This is the most common challenge plaguing e-retailers and brands with all departments reporting different revenue and cost-per-acquisition numbers, and all taking credit for the same customer. Display can’t take full credit for a customer who has as likely a chance of converting without an ad, just as paid search can’t take credit for a customer who would not have even considered the brand had it not been for social.

An unhealthy internal struggle has been created within marketing departments as specialties emerge. Competition is not always bad and, when focused, can lead to innovation, growth and, in this instance, a higher ROI. The key is focus, and that can only happen through company-wide alignment of one attribution model that works for the entire brand.

Now let’s shift focus to the six primary attribution strategies. Having a proper attribution model does not just help marketers have the most relevant view of the target customer to optimize against, it helps keep marketing investments financially sound. At the end of the day, it helps e-retailers and brands allocate scarce marketing dollars where they make the most sense.

Last interaction: A last-interaction strategy credits the entire conversion value to the last channel the customer interacted with before purchasing. This is the standard last-click model and one that most brands unfortunately still rely on.

For mass merchant e-retailers that sell lower-priced consumer goods, such as Walmart.com and Target.com, this can be the right strategy. These are items that people don’t need to be convinced they want before buying—think groceries, toiletries or other items that everyone simply needs for daily life. Consumers don’t need to research or consider the products they’ll buy at these retailers. It’s only that last channel that likely influenced them to make the purchase.

Last non-direct click: If a customer comes directly to an e-retail site to make a purchase, attributing some of the conversion value to the direct visit will dilute the understanding of what truly led to the sale. That is why many brands now employ the last non-direct click strategy, which ignores direct traffic and credits the entire conversion to the last non-direct touch point the customer had with the brand or site prior to purchasing. For example, if a customer clicks through an email on Monday, but purchases on Thursday by going directly to the URL, the email gets the credit. Matthew Butlein, president of underwear e-retailer Freshpair.com, takes this one step further by excluding all branded searches from the attribution model in the same way that a brand would exclude direct visits. “It’s not like we can throw more budget at branded search,” Butlein says. “We need to be mindful about why we’re doing attribution in the first place: To help us allocate budget to touch points we can scale.”

Well-established, single-vertical-focused brands, such as Ann Taylor, often use this strategy. Their customers already know and trust them so they don’t require multiple channels to convert. Those additional channels don’t increase the propensity to purchase.

First interaction: Some companies attribute the entire conversion value to the first channel a customer interacted with. If, for example, that customer initially heard about the brand from a social media post, did some research on the brand, then found the brand’s website and made the purchase, the only touch point that really matters is the original social post.

This type of attribution strategy works best for newer players looking to build brand awareness, such as razor and shaving goods e-retailer Harry’s or web-only mattress seller Casper. They’ll want to understand the initial touch points that led to the eventual conversion. They can then use this information to grow data about the keywords and channels that may work to entice future customers.

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