Benefits of Attribution Modelling in Online Marketing and Business

Last Updated: December 14, 2021

Attribution modelling is the process of finding and fixing attribution issues, understanding the buying behaviour of your website users and determining the most effective marketing channels for investment at a particular point in time.

Through attribution modelling, you can get answers to questions like:

  • Why do people buy from my website?
  • What happens before they make a purchase?
  • What prompted them to make a purchase or complete a predefined goal?
  • How much time elapsed between a visitor’s initial interest and their purchase?
  • What role did prior website referrals, searches, and ads play in conversion?
  • How do I attribute conversions to a marketing channel?
  • How much am I undervaluing paid search and how much am I overvaluing direct traffic?
  • How can I improve ROI across all marketing channels?
  • What is the value of carrying out paid search campaigns for branded terms when I already rank in the top five organic search results?
  • How much in-store revenue did my email campaign generate?
  • If I change my TV ad spend, how will it impact my organic search campaigns?

Attribution Modelling is the KEY to online business success

A long time ago, I received an email from a client which read something like this:

Hi,

I will put this month’s payment through but I have to ask – are you happy with the results so far? 

Our cost per acquisition is so high. We don’t see any ROI from our Google AdWords campaigns. 

If this continues after this month we will have to discontinue using your services.

Regards

Your client

This email was basically a final warning for me to either improve the campaigns’ performance or lose the project.

The cost per acquisition for the Google Ads campaigns was pretty high and all the generic keywords that I was bidding on were not resulting in enough sales to cover the ad spend.

Despite my best efforts, I was not able to make the campaigns profitable.

However, I knew from past experience that whenever I reduced the ad spend or paused the campaigns, there was a decline in the overall website sales.

At that time, I just believed what I saw in the analytics reports and the reports were telling me and my client that the cost per acquisition from the Google Ads campaigns was high and the campaigns were not profitable.

Later on, I had another client and I was in charge of their Facebook marketing campaigns.

Google Analytics wasn’t reporting many sales from Facebook and the Facebook campaigns didn’t seem to be profitable.

But, yet again, every time I reduced the ad spend or paused the Facebook campaigns, I noticed a decline in overall website sales.

I couldn’t figure it out! What was going wrong?

I was just relying on correlation is causation. Meaning that when I do something, something happens as a result.

So I was basically losing business because I did not understand the true customer purchase journey.

I did not understand how Google Analytics, Google Ads and Facebook actually attribute conversions and sales. 

Because my client was not aware of the Last Ad Click attribution model used by Google Ads, and was not really familiar with attribution modelling in general, he had no reason to doubt his interpretation of the data.

He simply believed whatever he saw in the analytics reports. He thought that he was correctly interpreting the data and I could not change his belief.

After this, I came to the conclusion that if I do not understand, pretty fast, how marketing platforms actually attribute conversions and how customers use different marketing channels and devices in their purchase journey then one thing was certain, I was going to go out of business.

This fear of losing clients and going out of business prompted me to dig deep into attribution modelling. 

Then I came to the conclusion that the cost per acquisition that my client was referring to in the case of their Google Ads campaigns, was actually ‘cost per last ad click acquisition’. 

Then I started to understand how platforms like Google Analytics, Google Ads and Facebook actually attribute conversions. 

Even if a campaign is not directly completing a sale, it may be initiating a sale or assisting a sale.

Even if a keyword is not directly completing a sale, it may be initiating or assisting a sale.

Not all direct traffic is actually direct. Whenever a referrer is not passed, that traffic is reported as direct traffic by Google Analytics.

Then I realised that if I can track offline marketing activities and conversions online and correlate them with the website usage data then I would be able to truly understand the customer purchase journey and determine the most effective marketing channels for investment.

So that is how I came to the conclusion that learning and implementing attribution modelling is the key to online business success.

How is Attribution Modelling helpful for ecommerce and non-ecommerce websites?

A non-ecommerce website is the one where the commerce is taking place offline.

For example, if a website sells properties then it is most likely a non-ecommerce website.

This is because the whole process of buying a property involves a lot of offline visits to the property, phone calls, a lot of paperwork and the final transaction is also carried out offline via a wire transfer. 

Often non-ecommerce websites are set up to sell very high-priced items (properties, cars, yachts, etc.) or to sell services or to fight for a cause (animal rights, child rights, etc.).

In the case of a non-ecommerce website, the majority of conversions usually happen offline via phone calls, store visits, etc.

These websites generally do not have any macro conversion (like making a purchase) but have a lot of micro conversions (like book a call, submit the form etc). 

If you are doing marketing for a non-ecommerce website then you will have to correlate your online marketing activities with offline conversions.

You will have to prove that your online efforts are really impacting offline conversions.

Otherwise, you will have a hard time reporting the value that you have added to the business bottom line. If you run or market a non-ecommerce website then you have attribution issues.

Attribution modelling is beneficial for both big and small companies

There is a common misconception that attribution modelling is useful only for big companies with big ad spend. This is simply not true.

Attribution modelling is meant for companies of all sizes. From big public traded companies to small start-ups can benefit from attribution modelling.

In fact, Attribution modelling is more useful for small players because they need to be a lot more cost-effective. They can not afford to lose a lot of money in paid advertising.

If you can not find winners and losers then you can not scale your winners and get rid of the losers.

You can even implement attribution modelling by just using the free version of Google Analytics.

Of course, for big companies, it makes more sense to move beyond free tools and invest in more robust attribution modelling solutions and systems.

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  7. Default and Custom Attribution Models in Google Analytics
  8. Understanding Missing Touchpoints in Attribution Modelling
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  10. Model Comparison Report Explained in Google Analytics Attribution
  11. Data-Driven Attribution Model in Google Analytics – Tutorial
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  20. Introduction to TV Attribution in Google Analytics Attribution 360
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  30. View-Through Conversion Tracking in Google Analytics
  31. Offline Conversion Tracking in Google Analytics – Tutorial
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  35. How to Use ZMOT to Increase Conversions and Sales Exponentially
  36. Connected Properties Explained in Google Analytics Attribution
  37. Marketing Mix Modelling or Attribution Modelling. Which one is for you?
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  39. Conversion Time & Interaction Time Explained in Google Analytics Attribution
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  42. Google Analytics Attribution Beta and Project Tutorial
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My best selling books on Digital Analytics and Conversion Optimization

Maths and Stats for Web Analytics and Conversion Optimization
This expert guide will teach you how to leverage the knowledge of maths and statistics in order to accurately interpret data and take actions, which can quickly improve the bottom-line of your online business.

Master the Essentials of Email Marketing Analytics
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Attribution modelling is the process of determining the most effective marketing channels for investment. This book has been written to help you implement attribution modelling. It will teach you how to leverage the knowledge of attribution modelling in order to allocate marketing budget and understand buying behaviour.

Attribution Modelling in Google Ads and Facebook
This book has been written to help you implement attribution modelling in Google Ads (Google AdWords) and Facebook. It will teach you, how to leverage the knowledge of attribution modelling in order to understand the customer purchasing journey and determine the most effective marketing channels for investment.

About the Author

Himanshu Sharma

  • Founder, OptimizeSmart.com
  • Over 15 years of experience in digital analytics and marketing
  • Author of four best-selling books on digital analytics and conversion optimization
  • Nominated for Digital Analytics Association Awards for Excellence
  • Runs one of the most popular blogs in the world on digital analytics
  • Consultant to countless small and big businesses over the decade
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