The first step in measuring success is developing an attribution model. In this episode, we explain the ins and outs of marketing attribution models.
Episode Transcript — How to Find the Right Attribution Model for Your Business
00:01 Stewart Anderson: Welcome back to the Spend 10K a Day Podcast. I'm Stewart Anderson, the Chief Marketing Officer here at MuteSix. With me...
00:08 Steve Weiss: I’m Steve Weiss. I’m the CEO of MuteSix. Welcome back for a pre-Thanksgiving online marketing discussion.
00:18 SA: Yeah. Today we’re gonna be chatting a little bit about something that we get asked about a lot which is tracking results, how to properly choose an attribution model, what some of the different attribution models out there actually mean. There’s a lot of confusing language if you’re not a marketer.
00:35 SW: Before we go into this, let’s discuss the big words. ‘Cause I feel like there’s kinda these buzzwords that are floating around the customer acquisition world. There’s number one, there’s ‘attribution’. This is a word you probably heard a multitude of times. You’ve probably been in a meeting with someone and they use this word, just because they think they’re smart, they think they can use big words, and this word, ‘attribution’. So Stewart, tell me your definition of attribution.
01:01 SA: When I talk about attribution, whether it’s in regards to an email, an ad campaign, basically anything driving traffic, when I attribute value back to an ad or back to an email, I am assigning the value of a specific conversion to that source. It’s how to, basically, assign value.
01:22 SW: Yep. Exactly. What you wanna understand is, you understand you’re running Facebook, you’re running Google, you’re running email marketing, and you have sales coming through, and you’re trying to understand like, what is the result of these sales? ‘Cause remember, the way Facebook tracks is very unique to any other place online. If you show an ad to someone and they convert, Facebook says, “That’s my conversion.” Or, if you show an ad to someone, they click but they don’t buy, but then they buy somehow seven days, a week later, Facebook says, “That’s my convert. Come back to me.”
02:06 SA: Yeah. And you’re gonna wanna basically set what are called attribution windows, which are periods of time in which you say, if this happens, if this sale happens, if this registration happens, whatever it is, if that happens during the window that you set, I’m gonna assign the value of that conversion to that source. So, if you say to Facebook, I’m gonna use your default attribution window, which is a 28-day click, one-day view.
02:33 SW: First off, before you say that, tell us what that means. That’s very important to really understand how Facebook attributes conversions because there’s a default… Facebook doesn’t really talk about this. It’s not the most popular topic, but when you generate conversions and you say, on a campaign level, “My conversion objective is conversions.” Well, what Facebook’s really doing is they’re optimizing your campaign around the default conversion window to generate conversion. So Stewart, tell us what that means, a default conversion window.
03:08 SA: By default, they use, as I mentioned a little while ago, 28-day click and one-day view. What that means is, if an ad shows and somebody clicks on it, and then converts within 28 days or within one day of viewing that ad, that ad is gonna receive the conversion value from that person taking an action. So, it’s basically setting the parameters by which somebody or an ad can get the attribution value.
03:40 SW: This has a lot of impact because the conversion data dictates the amount of money you spend, number one, and how you optimize your campaign. It’s very important for all marketers to really understand, on a deep level, how attribution works. We like to do is, we like to work with companies and kinda build out an attribution model for them. I don’t wanna say we work with companies, we do that for our own internal sites. We’d like to understand that if we are spending money on other platforms, how that impacts Facebook?
04:12 SA: Definitely.
04:13 SW: ‘Cause what happens is, you could be spending on radio, TV, podcasts, all these different great channels, and now you’re driving traffic to Facebook and Facebook’s like, “These are all my conversions,” and you really need to have a very good idea of how you modelled off those conversion, and what dollar value you assign.
04:34 SA: Absolutely. And there’s two main things that go into developing an attribution window. There’s the time period…
04:39 SW: Attribution model.
04:40 SA: Sorry, so the attribution model. Thank you, Steve. There’s two things which is the attribution window, meaning the amount of time that an ad, or an email, or whatever it is has to gain a conversion to get that value. And the other thing is the actual… Usually, it’s termed as an attribution model, it’s basically how are clicks or other things that drive traffic, how is that calculated? It’s first click, it’s last click, linear, time decay, it’s basically how you’re viewing web activity in the scope of conversions. Each of those terms has a slightly different meaning, obviously. When you use a first click attribution model, what you’re essentially doing is saying, “In the course of everything that led up to… “
05:35 SW: Before you go into first click and last click, tell us what first click and last click means. It’s very important for… Whenever you refer to these… These are analogies or these are buzzwords. There’s attribution, there’s first click, last click. Tell us what this means, so the audience is so aware of how we’re thinking about it.
05:52 SA: So first click attribution is when you are assigning a value of a conversion back to the first click that drove somebody there. In the course of buying, somebody might visit your website four or five times, maybe more, maybe less. What you wanna do in first click attribution is actually assign value to the first click, whatever got them in the door. For some businesses, that’s gonna make sense for them. On the other hand, last click assigns the value to everybody or it assigns the value to whatever drove the last click, whatever…
06:22 SW: The last touch point.
06:23 SA: Yeah. Essentially, whatever pushed them through and finally got them to convert. Linear is when you take every step in the process and assign equal value. And then, time decay is similar to linear, but the earlier steps, the earlier something is overtime, you’re assigning less value to it. The first click might get less value, whereas, the last click is gonna get more. And there’s combinations of those. You can do your own custom one but those are the four most common attribution models.
06:55 SW: And the reason why… If we’re putting people to sleep, wake up, I would just say wake up. This is important. This is gonna grow or kill your business right now because if you’re double-counting conversions and you think you’re generating 100 conversions, but the reality is you’re double-counting email and Facebook together, then you’re not actually growing your business, you’re just running around in circles.
07:21 SA: Yeah, you’re not tracking results properly. And it’s really important to find something that works specifically for you. If you find that people are… It’s a quick sales process. People make decisions fairly quickly, it could be a week or less. You might wanna consider having a shorter attribution window. Whereas, if somebody takes a long time, you might wanna have something that could be a month longer.
07:41 SW: And on the flip side, there’s two ways of really looking at attribution. There’s one, I’m gonna be very, very liberal and allow you to… Hate to use political analogies here, but it fits the bill. It could be very liberal and say, I’m gonna give a longer window to Facebook and allow Facebook to optimize for a lower CPA. As you know, your CPA on Facebook goes down day after day, after day, after day just because… For the month, at least when you’re calculating it. Or you can look at it and you say, “Listen, I’m only gonna count one day click conversions.” I always say that you need to be somewhere in the middle. You’re either gonna count seven, 14 days out. You gotta count some view through some 7-day conversion or 14-day conversion window is because if you only do last click, your CPA is gonna look really, really ugly. Now, I’m sure if you go on Facebook, we could… We’re gonna do this on our next podcast, but if you go on Facebook and you look at the default attribution window and you do one day click, one day view, you’re gonna be at 300, 400, some crazy number CPAs. I say, there’s a middling point to it. I say, you meet somewhere in the middle.
08:50 SW: You have to do some view through some click conversions, but I think that you really… I just wanna get everyone to start thinking about this for the holidays because some people are gonna say, “Wow. I had a great holiday season. December killed it.” What they really don’t understand is that Facebook’s counting all the holiday as you ran in November and attributing all those conversions over a long window. I really want you guys to really explore this, this is very important. If you guys have any questions for me and Stew on anything attribution or analytics, this is our bread and butter. We’re pretty boring guys and that we actually talk about this on a daily basis, and it’s terrible. It’s terrible that we have to sit down and talk about this every single day, but it’s the life we live and we love it.
09:36 SA: We love it. So here’s a couple just parting thoughts when you’re thinking about how to track data and figuring out your attribution model. One, just make sure that you stay consistent. Don’t go switching back and forth. You wanna be able to make apples to apples comparisons. As results come in and you’re tracking results week over week, month over month, you wanna make sure that you’re tracking results that are modeled in the same way, otherwise, you’re not gonna be able to make sense of your data. The other thing is, as we mentioned this before is make sure that you think about how people buy, and how people use your website, and use that to figure out what your attribution window’s gonna be.
10:13 SW: What do you mean like, how many touch points does it take to get a user to make a purchase, a customer to make a purchase?
10:17 SA: Exactly. And the other thing to think about too is, what is most important for you as a business in getting people to buy? Is it really important to get really high quality lead onto your website, and then you can probably handle the rest of the conversion process from there? Or is it easy to get someone to your website, but you need some channel to help nurture that prospect? The two models I’m describing, the first one would be a first click attribution situation where you wanna assign the most value to something that is getting somebody in the door. The second one, being a last click attribution situation where the really important thing for you is close the deal.
11:04 SW: Yeah. You could look at it like this. Facebook can help you drive in the top with the funnel and the bottom of the funnel. More buzzwords for you guys before Thanksgiving holiday. Top of the funnel, bottom of the funnel. Alright. Top of the funnel real quick. I’ve never heard of you, I’ve never seen you, I don’t know who you are. I click on your ad the first time I see you. Facebook drives top of funnel. I’ve never been to your website, I don’t know who you are. Bottom of funnel, I heard you on a podcast. I heard you on TV. Now I’m gonna make my purchase based on this Facebook ad. Real quick, that’s what attribution is, it’s really understanding and putting a dollar sign on traffic channels, and clicks, and conversions.
11:48 SA: That’s a little primer on attribution tracking results. Something for you to digest along with the holiday turkey. Again I’m Stewart Anderson, with me is Steve Weiss.
12:01 SW: Yeah.
12:01 SA: Wishing everyone a happy and safe Thanksgiving holiday.