It’s Dec 2017, Pelicans vs Nets, and Rajon Rondo had only scored 2 points. Yet, in less than 30 minutes, he made it to the record books (which had been untouched for the last 21 years). He did something that not only won the game for the Pelicans but made bookkeepers rewrite records… he secured a spot in the exclusive 25 assists club and he did it in the shortest amount of time any of the 7 players who have assisted 25 shots in a single game. This setup 58 points, the most by any player in the game over the past 20 seasons. Great story but… what does this have to do with eCommerce attribution?
NBA performance is measured not just on the basis of the points you score but on the basis of points you assists, total rebounds, and total blocks. A player who made 58 baskets possible, scored only 2 times. But we can all agree that if it was not for his perfectly timed passes, those scores would not have been possible. This is exactly how performance in a game is measured and attributed… and it also applies to online business sells and eCom attribution.
Something very similar happens when you deep dive into a user’s buyer journey. Consumers go through multiple touch points while shopping online – sometimes using multiple devices before the final transaction is made. Clearly, as in the NBA, going by the last click attribution would just be plain unfair.
Attribution is the holy grail in advertising. And for businesses which heavily rely on advertising, attribution is becoming even the more important. Sources estimate that e-commerce will bring the global e-commerce market to $2.5 trillion in 2018, that’s 10% of total retail sales in the US.
The e-commerce industry is bloated with metrics. And most marketers do not look beyond the last click conversions. This often presents a picture that paints one channel as the ultimate hero. With this article, I want to take a shot at helping marketers who are scaling their business crack the problem of attribution wide open. This article will help you identify marketing channels that are contributing “significantly” to your user’s buying journey.
The Yardstick for evaluating online stores changes with every milestone that they hit. As online stores evolve, so must their metrics. I am not saying that tracking these metrics would be wrong – just that they are vanity and more than often these are false positives.
81% of organizations are using marketing attribution, but 70% are still finding it hard to act on insights – Source
You know what our problem is? We are biased without even knowing it. We usually consider the last channel that has interacted with the user to be the star, the lifesaver of marketing efforts, the ultimate channel you need to shove more money at.
It makes sense to start off attributing the last channel the user interacted with if you are just starting off or are a newbie eCommerce business owner. But as your business grows and you start seeing a measure of success, you need to track which channels helped bring your online shoppers to the point of conversion as well. Again, this depends on the business you have and if you sell high-value products or not. Once your business starts growing, it is always advisable to analyze multiple touch points that encourage users along the way to attribute credit to the right channels.
Assisted channels to understand buyer journey
“I don’t think any one channel will capture it all for a brand. It just doesn’t happen anymore.” – Heather Oldani, McDonald’s, Head of Communication
Assisted channels are those channels that engage with the users (even multiple times) before users actually make a purchase. For example, I visit a footwear store in the morning and browsed some shoes. In the afternoon I am shown ads on Facebook showing some new collections, and in some time, I receive a Web Push Notification announcing hot deals in the shoe collection on shoes. In the night when I receive an Email about the offers on shoes, I could no longer resist.
While for the marketer, email seems to have brought a conversion, for me, it was the push notifications, the ad on social that lured me to make a purchase. If I was not prompted multiple times on different channels, I wouldn’t have converted the same day.
Here is how you can find assisted conversions in Google Analytics –
Here is an example of how web push notification has the best-assisted click/ last click conversion ratio. You can know more about the conversion ratios and its role in understanding assists and direct conversion in this article.
Attribution with complicated buying cycles
Attribution not only becomes tricky, but necessary when you deal with multiple marketing channels. Attribution is crediting channel/channels for conversion. It helps you facilitate revenue tracking and lets you keep track of the channels that provide the highest ROI.
The duration you set while analyzing conversion depends on the products you are selling; if they are high-end products or not. The purchase cycle of a clothing store and a diamond jewelry store will be entirely different.
Google Analytics is the holy grail when it comes to analytics. And by default, Google Analytics notes the last click except direct click. But the question is, is that the right path you need to be tracking?
Also, there is no ‘right attribution model’. Just keep tracking the right metrics according to the stage your business is in.
Here are a few models you can to look at-
Let’s understand this with a story.
Imagine it’s your wife’s friend’s wedding in a month. Your wife is super excited and is on a shopping spree. She adds a blue dress to the cart but she is not sure if she should buy it. You see the enthusiasm on her face and tell it would look great on her and she shouldn’t think twice. In the afternoon her sister tells her that the material of the dress would be good for the summers and she should definitely go with it. In the office, her colleague tells her that she would slay in that dress and that she would be the star of the night (after the bride and groom of course). When she returns, her mom tells her that blue always looked good on her and she would look pretty in that dress. And she finally clicks on the Buy button.
Now, let’s get on to the attribution models and substitute channels to the people from the story above.
1) Last Click attribution – Crediting the last touchpoint
Last click attribution gives all the credit to the last channel a user has converted from. Now going back to the story, imagine if all the credit for convincing your wife to buy the dress goes to the mom. What about all the other people who were involved?
Who should use this model: As I earlier mentioned, if you are just starting off, the last click is a good model to look at. Businesses that see shorter sales cycle can use this model and know which channel was the decision making channel. For products that you know will be purchased impulsively, the last touch gives a better picture.
But as the number of marketing channels you use to engage with users increases, you need to start looking at something that just doesn’t give all the credit to the last channel from which the user converted.
2) First click Attribution – Crediting the first interaction
This model is just opposite of the last click model. Here the channel that interacted with the user first is given all the credit.
Imagine she is back from the wedding, and she says it was because of you that she bought the dress. You definitely don’t want to see the look on your wife’s mom face! *brace yourself*
The concept behind this model is that a user would not have known about your sale or a new collection announcement if it was not for the first channel. But it doesn’t take into account the contribution of the other channels.
Who should use this model: This model is best suited for businesses that are gunning for growth or if their focus is on awareness and new users acquisition. Best used when your marketing is limited to one or two channels. Use this model if you have a short sales cycle
3) Linear Attribution – Giving each channel equal credit
When they say treat everyone equally, I am pretty sure it doesn’t include attributing the marketing channels the same way. This model distributes the credit to all channels that were involved from the users first touch point to the last. But the whole point of an attribution model is to arrive at channels that perform the best.
Here all the people who were involved in making your wife purchase that dress are given equal credit. Everyone deserves credit, but we all know we can never say no to mom. You get what I am saying.
Who should use this model: Businesses that have started off can use this to see the channels that are constantly encouraging the users to convert.
4) Position-based attribution
This model attributes 40% to both the first click and the last click. This model believes that the channel responsible for attracting the user in first place and the channel that actually makes users convert should be given higher credit. Shows effectiveness in both ends of the funnel.
According to the story, you and your wife’s mom get most of the credit. Is it unfair for the others?
Who should use this model: This model is usually used by businesses who sell high-end products.
5) Time – decay attribution
The Time Decay model like the linear model credits all channels, but rather than giving them equal credit, it credits the channel closest to conversion the highest and keeps lowering the credit when the channel moves further away from conversion.
When it comes to comparing all the above-mentioned models, the Time Decay model is by far the most sensible, especially if your business is now in a stable state. You need to credit all the channels are they have played a role bringing the user closer to conversions.
Now we are talking! In the story, while everyone’s intention was to make her buy the dress, everyone played a different role, her interest only grew after she interacted with each person.
Who should use this model: This model would be appropriate to figure out which channel closes a sale faster for businesses that deal with high-end products as they see longer sales cycles. This model can also help find the channels that drive repeat sales.
But then, what is it considered as a conversion?
Conversions have a gamut of metrics that are involved. The way conversion is credited, is different for different tools. For some tools, a conversion could be opens or clicks, or even views for that matter. Hence, it is necessary to know what is considered as a conversion for the marketing tools you are using. Being unaware will create utter confusion when you calculate your revenue.
Is your total attributed revenue more than your actual revenue?
There are some tools that declare that they have made conversions, and we end up thinking they are talking about direct sales. Google analytics shows a number and the marketing tool shows something different altogether! Yes, it’s confusing, I don’t blame you. By the end of it, all you know is that the revenue numbers don’t match up.
Here is what some tools consider as conversions –
|First click attribution
First click attribution
First click attribution
Multiple attribution models – First click attribution
First click attribution
|By default considers a conversion if user purchases after 1-day view and 24 days click on an ad
By default conversion is credited if a user has clicked on an Ad and a sale happens within 30 days
By default, a sale needs to take place within 7 days of a user interacting with an ad to attribute conversion
Only if a user clicks on the ad and then makes a purchase, is a conversion credited
Considers it to be a conversion if user purchases within 72 hours of open/click of email or push notification
Tip: Stick on to one analytics tool to have all data in one place and follow one attribution model.
With users interacting with multiple channels, there are so many ways that user can land on your website. How do you differentiate each channel?
- Make sure that you are adding UTMs to all your efforts (UTM is a simple code that is attached to a URL for tracking.)
- Decide on the conversion metric you are going to track and make sure it’s captured
If the UTMs are incorrect, you will end up having a lot of direct conversions and you won’t be able to track the performance of the channels effectively.
Marketing is full of assumptions, especially when it comes to crediting conversions. A channel that seems like the king of conversions, in reality, might not even be close. You need to give due importance to assisted channels that help bring users closer to conversions. As mentioned above, there is no right model of attribution. But make sure you stick to one attribution model that suits your business the best at the stage your store is in. Let us know what model you prefer and why in the comments below.
Guest author Pravya is a Product Marketer at iZooto. In love with animals more than humans, obsessed with amazing hair and educating the world about the progressive web. She secretly is mastering the art of stone balancing. Amidst all of this, she also squeezes out time to paint on canvas. Her dream is to go on a bike trip to the highest motorable road. She writes often on the iZooto blog.
Twitter handle- @pavipravin @iZootoTeam
LinkedIn – https://www.linkedin.com/in/pravya-pravin-a98b1269?trk=hp-identity-photo
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Company URL – https://www.izooto.com/