If you’re new to digital marketing, ‘attribution’ is one of those words you suddenly hear frequently.
What is Ecommerce Attribution?
Put simply, marketing attribution answers the question: which marketing activity caused a particular order to be placed?
Examples are a good way to illustrate:
- Sarah clicks through to your site for the first time via a Facebook ad.
- A couple of days later, Sarah googles ‘red widgets’. She clicks through from an organic search result to your ecommerce site.
- She has a look around the site, and signs up for your free email newsletter.
- Sarah visits again the following day, typing the address of your website into her browser directly.
- A week or so later, Sarah gets an email from you “Special Offers on Red Widgets”.
- Sarah clicks through and places an order for $100.
‘Attribution’ deals with the question: what caused that $100 order?
- Was it the SEO activity you’ve been carrying out, which means that Sarah found your site in the first place?
- Was it the email newsletter that Sarah clicked through and purchased?
- Or… was it a bit of everything?
Another way of wording it is: ‘how should we attribute the sale?’
Common Ecommerce Attribution Models
- ‘Last Click Attribution’ (sometimes called ‘last interaction’) means you attribute every order to the marketing channel that brought the customer to your website in the last session of their purchasing journey. So if they visited the site 7 times, and bought on the 7th visit, whichever channel they came through on that visit is seen as being the channel that delivered the sale.
- ‘First Click Attribution’ is exactly the opposite of the above. If someone came to your site via a Facebook ad, and then visited 6 more times via Google Search, buying on the 7th visit, the sale would be assumed to have been ’caused’ by the Facebook ad.
- ‘Linear Attribution’ means giving equal credit to each channel that brought the user to your site prior to purchase. Eg, if Sarah visited via Facebook, then organic search, then direct, then email, each of those channels would be credited with 25% of the sale. Ie, if it was a $100 order, each channel would be deemed to have caused $25 of the order.
- ‘Position Based Attribution’ splits credit to channels at particular positions in the purchase journey. For example, you may choose to give 40% of the credit to the first interaction, 40% to the final interaction, and split the remaining 20% between any interactions that occurred in between.
- ‘Last Non-Direct Click’ is the standard model Google Analytics uses in most cases. This attributes 100% of the credit for a conversion to the last clicked channel, with an important exception: If the last click was ‘direct’ (eg. via a bookmark, or typed into the browser bar), Google Analytics will look back in the user’s journey to see whether there are any prior ‘non-direct clicks’, and will attribute 100% of the sale to the most recent. Ie: If Sarah comes to your site via Email, then returns the following day Direct, and buys, Google will assume Email drove the sale.
- ‘Paid Only’ is a variant that some use, usually as a variation of the ‘Linear Attribution’ model described above. In this model, credit is spread among each of the marketing channels leading up to a purchase, but only among marketing channels where the website owner carries out paid activity. The reason a website owner may use this is: Many use ‘marketing attributions’ as a way to decide where to place more of their marketing budget. If they are crediting sales to ‘free’ channels, that does not help them to answer the question “if I have $1000 more to spend next month, where shall I spend it?”, therefore, a ‘paid only’ attribution model recognises that free channels deliver sales, but – in the context of budget decision making – does not give any credit to them for the sales they assisted.
Example Ecommerce Attribution Models Compared
Here’s a quick visual representation of the above, showing how credit would be apportioned using each of the above models, assuming the user visited first through Facebook, then Google Organic, then Email, then Direct:
Which is the Ecommerce Attribution Right Model?
This is a question many people get hung up on. Some invest in complicated algorithms and services to help them answer the question, some rely on the basics from Google Analytics. There is no ‘one size fits all’ answer, but it is most important to:
- Understand that ‘attribution’ is just a tool that allows you to look at your marketing in different ways.
- Get into a position where you are able to understand which channels are introducing people to your site, which are helping them along the way, and which are delivering the final ‘sales’.
- When using tools such as Google Analytics, and making decisions on marketing spend based on their data, keep in mind that the standard reports are just one ‘view’ of the world based on one attribution model.
- When making marketing spend decisions, think through your customer journey, and try to take into account the different views of the world different attribution models would give you. For example, if 90% of your traffic comes from Facebook Ads, but Google Analytics is telling you 100% of your sales come from email, you may want to stop spending on Facebook, but make sure to check your Attribution Reports to see whether those Facebook Ads are sending everyone to your email signup form in the first place.
That’s it – a 2 minute introduction to Attribution for Ecommerce. It is a broad topic, so we realise this won’t answer all of your questions, bu, hopefully it pushes you along in the right direction a little. Feel free to ask any questions in the comments, and we will revisit the topic elsewhere.