Imagine your business has three salespeople.
Steve earns £1000, Lewis £2,500 and Pete £10,000.
I ask you which one salesperson is the best?
You might say the answer is obvious. Pete £10,000.
Steve brings 100 new leads. Lewis 20 and Pete 4 new leads.
Given the additional data which salesperson do you think is performing better?
Attribution model are the rules to apply to sales process. Rules attribute a value to various touchpoints along the conversion path.
Imagine a visitor to your website first views an add on social media. They click the ad, but they did not make a purchase. A day or two later they view a display ad. That reminds them of their visit to your website. They decide to Google your business. There they view a Pay-per-click (PPC) ad. They decide to make a purchase.
So, who or what should be credited for that sale?
Viewing the diagram below the sale can be accredited to ‘Last Click’ model. Typically, this model is the default.
However, our customer viewed the social media ad and the display ad prior to making a purchase.
Surely all these ads should be given some accreditation?
As all ad channels played a role in the prospect’s conversion.
We need a way to analysis that and to understand how these ads prior to conversion impact sales. To achieve that we need to analysis the stats applying different attribution models.
First model ‘Last click’ gets all the credit. But we decided the two previous ads played a role.
‘First click’ model would mean the social media is accredited with the sale. But that ad did not result in a sale at that moment time.
The ‘Linear Model’ model gives equal credit to each touchpoint in the sales funnel. In my example the social ad, the display ad and PPC ad.
The ‘Time Delay Model’ attributes the proximity of time. To the actual conversion process. The ad that converts the prospect to a customer is given highest weighting. In my example PPC.
So which attribution model to choose?
The ‘Last Click’ model tells you which channel (ad) converted the prospect to a customer.
But that is not the full picture.
If you are advertising on multiple channels. Social media, display, PPC then you really need a helicopter view.
You really need to know how a prospect's journey converted a prospect to customer.
You need to understand how ads contribute or not.
It is a case of knowning whether an ad channel is or isn't delivering a return on investment (ROI).
If you are wondering where to start. Consider Google Analytics.