NestScale Blog

What is Marketing Attribution? Ultimate Guide for eCommerce

Marketing Atribution Guide

In today’s ever-evolving digital landscape, understanding marketing attribution is not just an option; it’s a necessity. If you’ve ever wondered which marketing channels are driving your conversions, how to allocate your budget effectively, or how to maximize your ROI, then this blog is your ultimate guide.

What is Marketing Attribution?

Marketing attribution is basically the process of giving credit to the marketing efforts that lead to sales, helping you determine which channels are most effective and what return on investment you get from each channel. This analysis identifies the marketing touchpoints responsible for sales or conversions, such as organic search, display ads, or email campaigns. 

Tracking customer interactions from acquisition to purchase helps you to allocate your resources wisely, focusing more on high-performing channels and tailoring campaigns to specific customer segments. 

For instance, you can find out if customers respond better to email offers or multiple touchpoints and whether an ad on a platform like YouTube leads to website purchases or other channels like organic search. 

Ultimately, marketing attribution helps optimize marketing strategies and budgets for better results.

4 Key Benefits of Marketing Attribution

Marketing attribution is a powerful tool that offers numerous advantages to businesses looking to enhance their marketing strategies. By analyzing the impact of various marketing touchpoints and channels, marketing attribution can lead to improved decision-making and more effective campaigns.

Optimized Marketing Spend

Marketing attribution provides valuable insights into the effectiveness of different marketing touchpoints, helping you allocate your marketing budget more efficiently. By identifying which touchpoints generate the most engagement and conversions, your marketing teams can reallocate resources to focus on the most impactful channels and strategies. 

This optimization of marketing spend ensures that resources are directed where they will have the greatest impact, maximizing the overall effectiveness of marketing campaigns.

Increased ROI

Effective marketing attribution allows you to target the right audience with the right message at the right time, leading to higher conversion rates. This, in turn, boosts the return on investment (ROI) for marketing campaigns. 

By understanding which touchpoints and strategies are driving conversions, you can refine your marketing efforts to consistently deliver messages that resonate with your target audience, ultimately resulting in a more favorable ROI.

Improved Personalization

Marketing attribution data provides insights into individual customer preferences and behaviors throughout the customer journey. Armed with this information, you can create highly personalized and relevant marketing campaigns. 

By tailoring messages and content to match the preferred channels and messaging styles of individual customers, you can enhance the customer experience and build stronger connections, increasing the likelihood of conversions.

Improved Product Development

Attribution models that provide person-level data allow you to gain a deeper understanding of consumer needs and preferences. This valuable insight can inform product development efforts, ensuring that updates and enhancements align with the functionality and features consumers desire. 

By incorporating attribution data into product development decisions, you can create products that better meet customer expectations, leading to increased customer satisfaction and loyalty.

6 Common Marketing Attribution Types

Marketing attribution models are essential tools for understanding how different touchpoints contribute to a customer’s journey. These six attribution models, including:

  • First-Touch Attribution
  • Last-Touch Attribution
  • Linear Attribution
  • U-Shaped Attribution
  • W-Shaped Attribution
  • Time Decay Attribution

These attribution models offer diverse perspectives on tracking and evaluating the impact of marketing efforts, helping you make informed decisions to optimize your strategies.

Single-Touch Marketing Attribution Model

First-Touch Attribution

First-touch attribution assigns all the credit for a sale to the initial interaction that introduced a customer to your store. It doesn’t matter if the customer encountered multiple ads afterward; only the very first interaction receives credit for driving the sale.

First-Touch Attribution

Last-Touch Attribution

Conversely, last-touch attribution gives full credit to the final touchpoint that convinced a customer to make a purchase. If a customer clicked on an email just before buying, last-touch attribution attributes the sale entirely to that email, regardless of previous interactions.

Last-Touch Attribution

Multi-Touch Marketing Attribution Models

Linear Attribution

Linear attribution distributes equal credit to every step a customer takes before making a purchase. Each ad, email, or message in the customer journey is considered equally important in influencing the sale. For example, if a customer encountered three different touchpoints before buying, each of those three touchpoints receives one-third of the credit for the sale.

Linear Attribution

U-Shaped Attribution

U-shaped attribution acknowledges the significance of both the initial interaction and the moment the customer decides to buy. In this model, 40% of the credit goes to the first interaction, and 40% goes to the purchase decision. The remaining 20% is shared among the intermediate steps. 

U-Shaped Attribution

W-Shaped Attribution

W-shaped attribution is similar to U-shaped attribution but includes an additional key moment in the customer journey – the creation of an opportunity. In this model, 30% of the credit is allocated to the first interaction, 30% to the purchase decision, and 30% to opportunity creation. The remaining 10% is distributed among the other steps, recognizing the value of multiple touchpoints in the journey.

W-Shaped Attribution

Time Decay Attribution

Time decay attribution assigns more credit to touchpoints that occur closer to the purchase. It acknowledges that interactions just before buying have a greater impact. The earlier steps still receive some credit, but their significance increases the closer they are to the actual purchase. 

For example, if a customer clicked on an ad yesterday and made a purchase today, the ad clicked today receives more credit.

Time Decay Attribution

3 Biggest Marketing Attribution Challenges

Tracking the Complete Customer Journey

In today’s privacy-focused digital landscape, tracking the entire customer journey from initial touchpoint to conversion poses a significant challenge. Customers often use multiple devices and experience time gaps between their interactions with a brand. 

For instance, a user might encounter a Facebook ad on their smartphone, click on it, and then delay the purchase decision until payday when they directly enter the website URL on their laptop. In such cases, all credit is assigned to the last touchpoint (direct website visit), overlooking the impact of earlier touchpoints like the Facebook ad. 

This challenge is exacerbated by cross-device and cross-browser journeys, making it difficult to link sessions from different devices to a single customer, leading to an incomplete view of the customer journey.

Selecting the Right Marketing Attribution Model

Selecting an appropriate marketing attribution model is another significant hurdle for marketers. There are various attribution models to choose from, including single-touch attribution models that credit a single touchpoint (e.g., last click) and multi-touch attribution models that consider multiple touchpoints based on predefined rules or data-driven analysis. 

These models heavily rely on cookies to track user behavior across touchpoints. However, privacy regulations, tracking restrictions, and user preferences limit the use of cookies, potentially rendering many attribution models inaccurate. 

For example, a multi-touch attribution model might assign credit to several touchpoints in a customer’s journey, but tracking limitations can hinder its ability to accurately represent how each touchpoint influenced the customer’s purchasing decision, making it challenging for marketers to make informed choices.

Navigating the Cookieless Future

The impending cookieless future, marked by Google’s decision to eliminate third-party cookies and Apple’s changes to Identifiers for Advertisers (IDFAs), poses a significant concern for marketers. Attribution models, whether basic or data-driven, rely on cookies to function effectively by identifying and tracking users across websites and media channels. 

When third-party cookies are no longer available, the web will be divided into two main segments: the authenticated web (about 5% of traffic) with logged-in users retaining identifiers and the anonymous web (over 95% of traffic) with no specific identifiers for advertisers. 

This shift raises questions about how brands and agencies can continue to plan and optimize media effectively without the reliable data that cookies once provided. It necessitates the exploration of alternative solutions in a cookieless landscape.

So, what’s the solution?

Finding ways to cope with such challenges is not at all simple, it can be a huge headache for marketers to find a solution for each challenge. 

But, what if I told you that there’s a software that can solve all 3 problems above? Sounds nonsense doesn’t it? Okay, let me show you how NestAds can help you get through all those obstacles.

Multi-channel tracking platform

As a multi-channel tracking platform, NestAds allows you to monitor audience activity across various touchpoints, including social media platforms like Facebook and TikTok, all the way to your online stores.

Moreover, with the “Order Detail” feature, you can gain insights into the individual customer journeys, allowing you to comprehend the broader picture of how their audience progresses through the marketing funnel. 

This visibility into the entire customer journey empowers businesses to make informed optimizations to their marketing funnel, ensuring a more comprehensive understanding of user interactions and touchpoints.

NestAds Attribution Model

Designed especially for brands engaged in omnichannel marketing, NestAds Attribution assigns 100% order credit to the last ad click per ad channel in the customer’s journey leading up to a purchase. 

NestAds Attribution Model

Unlike other models where credit may be disproportionately assigned to conversion channels, NestAds Attribution ensures that earlier ad clicks in the customer journey still receive their due credit. 

For example, if a customer clicked on multiple ads across different platforms before making a purchase, NestAds Attribution would recognize the final click within each ad platform as the most significant for that channel and assign credit accordingly, eliminating duplicate credit issues.

This model allows you to focus on specific channels at any given time and gives credit to the last ad click on that channel, making it ideal for understanding the overall value of click-based revenue attributed to each channel and facilitating day-to-day ad decisions.

First-party data platform

First-party Data Third-party Platform

In contrast to many other marketing attribution tools that rely on third-party data, NestAds leverages first-party data sources. 

This strategic approach enables NestAds to navigate the changing landscape effectively, as it is not dependent on third-party tracking methods that are increasingly restricted and limited due to privacy regulations and evolving user preferences. 

By using first-party data, NestAds can continue to provide valuable insights and accurate attribution in the absence of third-party cookies, making it a reliable solution for marketers in the cookieless era.

But, seeing is believing, to really understand how NestAds can help your business, simply click the button below!


Meet our Author


Author at NestScale


Recent post

You may also like ...

You may also like...

Want to grow your business? Let's talk.