There are a lot of activities that drive the overall success of your website. People can be landing on your site for many different reasons and they may have gotten to your site through many different sources.
And most users are not going to land on your site just once. How many times have you landed on a site you’ve never seen before and make a purchase on that first visit? For most sites, that’s not very often. The internet has allowed users to explore more information than they’ve ever had access to before. So the likely hood someone is going to land on your site and hit the buy button their first time there is unlikely. What this usually means is that people transacting on your site have probably visited your site before. They are a returning user. Because of this behavior, it raises a question on how to properly attribute the transaction. Here’s why…
Let’s say the first time they visited your site, they found you through a Google search and clicked on a search result. They browse. Then they leave because they’re not ready to buy. Later down the road, they see your Facebook ad, click it, and land back on your site again. Then they leave again. Again, later down the road, they see your AdWords ad, click it, land on your site, and this time they decide to purchase.
This is a pretty common behavior for a typical user. But here’s the problem… who get’s the credit? Which channel should the sale be attributed to? Was it Organic when they first searched and found you through a natural search result? Or was it the Facebook ad that brought them back a second time? Or should it really be the AdWords ad on the last visit?
There is no right or wrong answer. They all obviously played a role in that customers journey. What’s important is understanding that each channel played a part and without each one, there is no guarantee that this user would have purchased. In our example, had you not been running that Facebook ad running, maybe that user would not have remembered your brand, product, or service? The ad served as a reminder that you exist, and brought that product or service back to the top of their mind.
So the question is, how do we attribute that revenue? We have to know how each channel performs, so we need to gauge the success by putting that revenue into a bucket. There are a few different models that the industry uses in general, and understanding the differences will help you pick an attribution model for your organization. We’ll start with the most common.
1) Last Click Attribution
Google uses this one by default. This is the mindset that whichever channel closes the sale deserves 100% of the revenue from that conversion. In our example above, that would be the AdWords ad. That means Organic and Facebook Ads got no credit for helping that customer along their journey. All the credit gets assigned to the last channel that brought the user back to the site when the user made their purchase.
This model is common. It’s a straight forward way to monitor which channels are closing sales. The bonus is that it’s easy to understand and track. Many organizations stick to a last click attribution model because it makes things clean.
2) First Click Attribution
First click attribution is exactly opposite. It gives 100% of the credit to the first channel that brought the user to the site. In our example, this would have gone to the first Organic search that took place. This mindset is based around the idea that without the first channel, the user would not have found you in the first place. It’s the channel that first brought awareness of your product, service, and brand to that user. Therefore, it takes all the credit.
Paid ad companies love to use this model as default, because paid ads will drive a lot of traffic that end up converting later through a different channel. Be careful that you use the same attribution model across all channels to avoid overstating or understating revenue.
3) Linear Attribution
This model starts getting into splitting the attribution between channels. It takes the value of the conversion and splits it evenly among all the channels that were involved in that customers journey. So in our example, Organic would get a third of the revenue, Facebook ad would get a third, and then AdWords would get a third. Each channel gets a fair split of the revenue that came in. We like to call this the “everyone gets a trophy” model.
4) Position Based
Position based attribution model gives a set percentage based on where the channel was throughout the journey. This model gives you the flexibility to weigh which part of the customers journey holds the most value. An example of this model would be a 40-20-40 split. 40 percent of the credit goes to the first channel, 20 percent goes to all the channels in the middle, then 40 percent goes to the last channel. Applying this to our example, Organic search would get 40%, Facebook would get 20%, and AdWords would get the last 40%.
This model can get tricky and requires more work to keep it clean, but it gives you the flexibility to control what your attribution model looks like.
Like I said before, there is no right or wrong way. The only important step is to be consistent on how you measure your channels. Pick the attribution model that makes sense for your business and stick to it. Using different attribution models for different inbound channels is a reporting nightmare and not an accurate representation of performance.