Attribution is not a new topic. The best solutions have been debated for a number of years now and it still remains a focal point of discussions for online advertisers. Contrasting views on the best attribution solution and if it should even be considered at all are regularly aired.
Why advertisers wish to attribute
Attribution modelling allows advertisers to understand each of the individual touch points involved within a customer’s path to conversion and how they interact. The ultimate goal is to ensure marketing budgets are invested effectively to generate an increased ROI. An attribution model allows advertisers to gain insights into cross channel user journeys and presents opportunities for them to invest in key areas.
From an affiliate channel perspective, advertisers wish to gain an understanding of how different affiliate types are interacted with. They also wish to reward publishers involved within the customer journey but that do not earn commission based on the standard ‘last click wins’ model.
Common attribution models
There are various attribution models that are widely discussed. The two most common models are single click attribution and multi attribution. Single click is the most common form of attribution used by advertisers – typically on a last click basis. With affiliate marketing being founded on a last click wins model, it is not surprising affiliates are experts in converting sales. Alternatively, single click attribution models could also be focused on rewarding the first click – the click that initiated the sale.
Multi attribution looks to attribute sales to the various touch points involved within a transaction. For example, if there are three affiliate touch points within a transaction, an advertiser may wish to split commission across all three. This could be split evenly or weighted in some way e.g. 30% to the first and middle touch points and 40% to the affiliate that converted the sale.
Problems with attribution
There are a number of issues that arise when discussing attribution modelling. Firstly it is important an attribution strategy is considered across all digital channels. This in itself throws up complications as all channels are paid for in different ways, some just on outcome (affiliate channel) and some regardless of outcomes (PPC, Display). In other words there is a significant ‘free’ element to affiliate marketing, unique to the channel that is often ignored.
To compare all channels in the same way ignores the various commercial models in place. It will always be necessary to assess influence and contribution, even if a channel is not credited with a sale on a last interaction basis. Clicks are an arbitrary measure. What happens beyond the click is equally, if not more, important.
Additionally, within the affiliate channel, attribution can have its own complexities. Attribution models that involve multi-attribution can be difficult to roll out and require manual implementation. It is also difficult to implement for some promotional types. For example cash back, loyalty and reward sites need to know a commission amount they will earn for a sale in order to pass this on to their members. If there is a multi attribution model in place, it is impossible to be transparent with their members.
Furthermore, with consumer behaviour evolving and customer journeys becoming increasingly complex, we are now also faced with the challenge of the path to conversion taking place over multiple devices. Currently there is no cross device solution so if we are unable to see the full customer journey across multiple devices, how can we expect to attribute sales effectively.
Is there a better way?
While advertisers and agencies have placed a lot of emphasis on developing attribution models to understand the customer journey up to the point of conversion, one significant piece missing from this is what happens after the conversion? How valuable are the customers being driven by each online channel? An advertiser’s own internal KPIs will determine the metrics that constitute value. For example this can be the generation of new customers, increased life time values and low churn rates.
We are big advocates of value attribution. The process of understanding what has happened beyond the purchase and the channels that have been instrumental in driving valuable customers. By looking at the value driven beyond the last click, it is also possible to look at additional/alternative payment models to reward publishers for the customers they are driving.
A crude split commission model could see affiliates delivering very valuable, engaged consumers further down the line penalised and in turn they could choose to turn their attention to alternative advertisers.
Additionally, advertisers could be looking at the publishers adding value earlier in the customer journey. For example, content or comparison sites could be involved in a significantly higher proportion of sales than they are credited for on a last click basis. To reflect the value they deliver earlier on in the path to conversion, they could be paid a higher CPA to recognise the sales they have contributed to, or there could be a tenancy agreement in place. Again this would reflect the value and the role the publisher plays higher up the conversion funnel. This will also negate the need to split commissions based on the publishers involved in the transaction.
Attribution is a complex issue and the implications of rolling out an attribution model need to be fully understood. As well as understanding the customer path to conversion, it is important to understand the post sale metrics such as customer quality to ensure partners are recognised for driving quality as well as quantity.