What is attribution modelling and why it is the ‘key’ to online business success?

 

Attribution Modelling in Google Ads and FacebookAttribution Modelling in Google Analytics and Beyond

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Video Transcript

Hello everyone.

Himanshu here from OptimizeSmart.com

In today’s video, I want to talk about, what is attribution modelling and why it is the ‘key’ to online business success.

Attribution modelling is the process of understanding and assigning credit to marketing channels that lead to sales and other conversions.

These marketing channels are primarily digital marketing channels (like paid search, display advertising, Facebook, etc.) but can also include offline touchpoints (like store visits, phone calls, etc.)

The objective of attribution modelling is to understand the buying behavior of your website visitors and to determine the most effective marketing channels/touchpoints for investment at a particular point in time. 

Now for many people, Attribution Modelling is still a mumbo jumbo. They may have heard about it somewhere. And they may have a vague idea of what it is but they don’t really know how to use and benefit from it.

And that is because attribution modelling is full of jargon. We have got ‘last click conversions’, we have got ‘first click conversions’, ‘data-driven conversions’. We have got ‘click-through conversions’, we have got ‘view-through conversions’.

 

Then we have got dozens of different attribution windows, conversion windows, attribution models. And then under each attribution window, conversion window and attribution model, we can have a range of different conversion volume and conversion values. 

Then we have got different types of cost per acquisitions (CPA) like Last Interaction CPA, Last non-direct click CPA, Linear CPA, Time Decay CPA…. and the list goes on and on. 

And the biggest headache of all is to decide which attribution window, conversion window and/or attribution model to use for optimizing marketing campaigns and interpreting data. 

All of this has made web analytics and optimization incredibly hard and complex. 

 

However, you need to learn all of this attribution modelling jargon. And not just learn it but truly understand it, if you want to remain relevant in the current marketplace and in demand. 

Gone are those days when you were advertising on just one marketing platform and device, and attributing sales was as easy as looking into an analytics report.  Analytics reports are not what you see is what you get. They are what you interpret is what you get. 

Now in the world of multi-channel and multi-device marketing and the ever-increasing number of marketing platforms, attributing conversions to the right touchpoint is becoming progressively complex and hard. 

Let’s be honest. Most of the online marketing that is exact today is not based on science or any formalized process. People are doing all sorts of different things to generate sales.

They blog, they produce videos, they are on Instagram, they do podcasts, they speak on stages throughout the world. But they don’t really know what is working and what is not working. 

They are just copying each other, like blind leading the blind. They do not have any data to back up their theory, formulate a hypothesis, or increase the budget. They have got no way of knowing which marketing channels are actually working.

They can not put their finger on any one marketing activity and can say with any degree of confidence that this is the marketing activity which has the most impact on our sales. 

What they have got is an ‘attribution problem’.

So you can no longer ignore attribution modelling unless you don’t mind getting obsolete. Because markets reward those who continue to add value to the marketplace. Those who refuse to upgrade themselves or believe they know it all are left behind. 

 

Let me tell you a real-life story.

A long time ago, in a galaxy far far away, 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 is an actual email I got from a big Australian e-commerce store, back in 2013. 

This email was basically the final warning for me to either improve the campaigns’ performance or lose the project. And it hit me like a ton of bricks because I am not used to getting such types of emails. 

The cost per acquisition for the Google AdWords 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 just couldn’t figure it out, What was going wrong?

Then I had yet another client, this one was in the business of selling and installing swimming pools. All of their sales were happening offline via phone calls. I couldn’t attribute phone calls to the correct traffic source. I had no way of knowing which keyword or marketing channel resulted in a phone call or a sale.

This meant I couldn’t increase or decrease investment in a marketing channel with confidence and I couldn’t increase or decrease bids on keywords with confidence.

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

Basically, I was just going in blind. I did not have any data to back up my theory, formulate a hypothesis or ask for more budget. I had no way of knowing which keywords or marketing channels were actually working, and which resulted in sales and other conversions.

What happens is that when business owners or c-level executives do not see any apparent return on investment from a marketing channel, they tend to deinvest in that market channel and allocate more budget to those marketing channels where they can see a clear return on investment. 

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. 

I also could not educate my client on how to correctly interpret the analytics data and reports.

Because my client was not aware of the Last Ad Click attribution model used by Google Ads, and not really familiar with attribution modeling 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 later I realized that surely I can’t be the only one in the whole world facing the attribution problem. That’s when I decided to share my understanding of the attribution modelling with the outside world in the form of two books.

The first book is ‘Attribution Modelling in Google Analytics and Beyond ‘:

This book has been written to help you implement attribution modelling in your organization. It will teach you to leverage the knowledge of attribution modelling while allocating your marketing budget and help you to understand your user’s buying behavior.

In this book, there is a strong focus on using Google Analytics and other Google tools and technologies. I have explained various attribution models mainly in the context of Google Analytics. This book is available on all Amazon marketplaces, worldwide. Simply search for it on amazon and you should be able to find it.

 

My second and the latest book on attribution modelling is ‘Attribution Modelling in Google Ads and Facebook’:

This book talks about attribution modelling in the context of Google Ads and Facebook. This book is also available on all Amazon marketplaces. If it is not available in your country, you can always purchase it from amazon.com.

Amazon can ship items practically anywhere on planet earth. That’s why we picked them as our distribution partner.

Both the first and second book complement each other. But they are not dependent on each other. You can read one book without reading the other book.  Most people buy the paperback version of these books for their office. So their entire staff can benefit from it. 

These are the only two books on attribution modelling ever published. So there are no alternatives available out there. 

 

However, you can still choose not to purchase them. And that is absolutely fine with me. I just want to let you know about the options available, in case you are serious about learning attribution modelling and want to be on the winning side.

Because I really don’t want anyone left behind in the marketplace. That’s the reason I wrote these books. That’s the reason I am sharing my understanding of attribution modelling with the outside world.

I could have kept all of this information to myself because I am losing a competitive advantage here and you can not really put any price tag on that. But I genuinely want to help others and that’s why I am sharing my knowledge with others. 

So that’s it for the video. 

Thanks for watching and I look forward to speaking to you soon.

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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
This book focuses solely on the ‘analytics’ that power your email marketing optimization program and will help you dramatically reduce your cost per acquisition and increase marketing ROI by tracking the performance of the various KPIs and metrics used for email marketing.

Attribution Modelling in Google Analytics and Beyond
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.

Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers' purchase journey and helping them determine the most effective marketing channels for investment.

He has over 12 years of experience in digital analytics and digital marketing.

He was nominated for the Digital Analytics Association's Awards for Excellence. The Digital Analytics Association is a world-renowned not-for-profit association that helps organisations overcome the challenges of data acquisition and application.

He is the author of four best-selling books on analytics and conversion optimization:

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