In the world of online marketing and digital analytics, it’s important to assign a value to the events or “touchpoints” that a user has on their way to conversion. This is known as marketing attribution, a process that enables us to understand the Return On Investment (ROI) of our marketing channels. If for example, you spend $100 on a marketing activity, our hope is that we will generate *more* than $100 in revenue. This concept is known as **attribution**. Simply put, attribution is assigning credit for a conversion.
In this post, I’ll use a sports analogy to illustrate the critical role attribution plays in your website’s success. In a subsequent post, I’ll show you how to set up attribution in Google Analytics.
Basketball and Attribution: An Analogy
Here’s how the game of basketball works: two teams of five players score goals by throwing a ball through a netted hoop fixed above each end of a court.
For this analogy, you’re the coach of a top-performing team. Of your five starting players, Player 1 is your best goal scorer—he scores more points than anyone else on your team. And since points win games, Player 1 gets a lot of praise for all the points he scores. For example, there’s your boss, the General Manager (GM). He constantly raves about you about Player 1. He tells you things like, “He’s the best player in the league! Play him more!” The fans love Player 1, too. His is the top-selling jersey on your team by far. “We love Player 1! He’s our savior!” they cheer.
Player 1 is your star player—he’s hailed inside the clubhouse by personnel and outside the clubhouse by adoring fans. They attribute the team’s success to Player 1, but you know this isn’t true. Each player on your team plays a particular role that contributes or assist, in every goal Player 1 scores. Simply put, it’s how well your players work together as a team that’s responsible for the team’s success.
For example, you know that player 2 is the best passer on the team. He’s going to get the ball into Player 1’s hands at the optimal time for him to score. Player 3 is a defensive specialist. His supreme guarding abilities create turnovers that lead to easy scores. Player 4 is your veteran leader. When the pressure is on, he keeps everyone’s head in the game. Last but not least there’s Player 5, the young up-and-comer sidekick to Player 1. When Player 1 has an off-night, Player 5 picks up the slack.
Player 1 receives most of the praise and attention because he’s the top scorer. And although his credit is well-deserved, he wouldn’t be the top scorer if it weren’t for the skills that other players bring to the team. Without Player 2, Player 1 can’t score as easily. Without Player 3, you don’t get as many free points off turnovers. Without Player 4, the team makes careless errors in tense moments. Without Player 5, Player 1 has to shoulder all of the pressure to win.
Each player has a role that allows you to score points. Player 1 is the top goal scorer only because of the assists he gets from his teammates. Take any one player away, and your team’s performance drops. Take two players away and it drops even more, and so on. Before you know it, you’re losing more games than you’re winning.
Attribution and your Website
The goal in basketball is to score points. In the analogy above, your team’s success was dependent on you playing the right mix of players to get the win. In short, you assigned credit for each goal to multiple players. This is the concept of attribution as it applies to your website. Whereas the goal in basketball is to score points, the goal of your website is to turn website visitors into returning customers.
Like many companies, you have various marketing channels that bring visitors around the web to your website—Facebook, Twitter, and AdWords among others. At first glance, you see that 50% of all customers came directly from Facebook, and so you’re quick to credit Facebook for those conversions. This is known as the Last-Click Attribution model. For a long time, last-click attribution was the most popular attribution model. Recently, though, we’ve been able to collect more data points about our customers and the path they take to go from a visitor into a customer (a.k.a. The Customer Journey).
Continuing with the same example, one of your colleagues alerts you that although Facebook was the last-click for 50% of all customers, 90% of those people first visited your site first through organic search and then through AdWords remarketing. In other words, Facebook is your best closer but only because organic search and remarketing assisted it.
Attribution is assigning credit to conversions. In all likelihood, your customers saw you multiple times before they finally clicked on that Facebook Ad that generated their purchase. The Multi-Channel Funnel Attribution tool in Google Analytics shows you exactly which marketing channels played a role in converting your website visitors into returning customers. We’ll take a deeper dive into attribution in Google Analytics in the next post.