Monday, November 26, 2012

Still doing basic online attribution?

Online attribution? Well, imagine you have a transactional website and you didn't know which digital  channel was responsible for each of your goals or conversions (e.g. sales) . Finding a way to 'attribute' specific actions to specific marketing channels gives you a better understanding of how and where to spend your budget.

Currently a lot of website analysts and digital marketers apply a ‘last click wins’ approach  to measuring goals. This is where the last channel used gains all the credit for the acquisition (this could be: an online advert such as Google’s AdWords, a paid for link on a partner website, a targeted email, a review site looking to get affiliate revenue for a referral, or a listing in search engines , etc.).
Why do they do this? Well it is what your typical online analytics tools provide you out of the box and therefore it easy to understand and manage.
Note: Others actually apply a 'first click wins', which means awarding conversions to clicks that have not actually produced conversions... or in other words, not rewarding the last channel that did!

However some sites are now applying slightly more complex attribution models, to try to give some credit to the overall purchasing process and not just one click. Some apply an equal weighting to all the known/recorded‘ touch points’ or alternatively and with slightly more complexity they apply a simple gradual increased weighting up to the moment of purchase. These methods of equal attribution and escalating attribution both have their plus points (they are quite simple to measure and calculate) and their drawbacks...with the obvious caveat being that none is really a true picture of the value added by each online customer interaction.
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