Marketing Attribution 101 for eCommerce
Learn the basics of marketing attribution for eCommerce and why it’s important for you.
You’ve likely read or heard about applying “multi-touch attribution” to your marketing strategy in order to drive a better ROI.
But how does this work for your unique situation? And how does attribution apply to eCommerce stores?
In this post, I’m going to cover the basics of marketing attribution: What it is, why it matters, and some common myths within the eCommerce world.
What is Multi-Touch Attribution?
Multi-Touch attribution is the process of determining which marketing touch points influence a desired outcome — typically a user completing a purchase — and assigning relative value to each touchpoint.
The purpose of multi-touch attribution is to quantify ROI on your marketing campaigns within each marketing channel (ex., organic, affiliate, paid search, paid social, etc).
In even simpler terms — where are you making money on your money?! Instagram? AdWords? Affiliates?
What is Attribution Modeling?
You probably don’t hear multi-touch attribution without the word “model.”
Modeling is the rule, or set of rules, that determines how credit for sales and conversions is assigned to touch points in conversion paths.
Google Analytics provides a Model Comparison tool that allows you to analyze your data using 7 built-in models to compare to one another. I won’t cover these 7 models in detail in this post, but you can learn more about their definitions here.
Here are common terms related to marketing channel attribution:
- Last-Touch or Last Interaction is the last interaction prior to a conversion. Example: A user clicks-thru an abandoned cart email to complete their purchase.
- First-Touch is the first interaction on the path to conversion. Example: A user Googles “bathroom sinks” and clicks on one of your organic (non-paid) landing pages.
- Assisted Conversion is any interaction on the path to a conversion, but not the final interaction. You generally look at assisted conversions by marketing channel.
- View-Through Conversion is triggered when a user is on the Display Network and sees your ad but does not click on it. They later visit the site and complete a purchase.
- Cross-Device Conversions, primarily seen in AdWords reports, are when a user clicks on an ad on one device but completes their purchase on another device or browser.
- Time Lag gives insight into your conversion cycle by providing the # of days it took between first interaction and conversion.
Why Attribution Matters in eCommerce
Let’s take an example of a user purchasing a $100 product from your store.
Here’s a path to purchase that seems normal, right?
Here is a visual of the way revenue reporting used to work from your different marketing channels:
So they can look the most profitable in your eyes, each channel wants to claim as much credit for a sale as possible — even if they aren’t the last interaction before a purchase.
Imagine if your email provider — Mailchimp, Bronto, Drip, etc.— reported $0 in revenue in their reports that you view. You’d probably consider dumping the cost for that service, right?
Understanding the role and value each channel plays in your acquisition and conversion events allows you to optimize spend in the right channels. You’ll also be in a better place when planning future marketing campaigns, as you will have data driving your focus on the channels that result in the highest potential ROI.
— “You can now track users across all devices.”
While this is true, it has a huge *. In the majority of eCommerce implementations I see, implementing cross-device conversion analysis comes with a cost to the user experience.
Yes, Google Analytics has a new-ish feature called UserID that can unify sessions across devices; however, this requires the user to be logged in on each device.
Unless you are forcing login — even if just at checkout — obtaining this cross-device reporting is not as easy as it sounds (as of today 🙂 )
If you do decide to force login then measure the change in your conversion rate or Revenue Per Visitor. A/B tests commonly prove that allowing users to check out as a guest outperforms checkouts forcing login. Here’s data from a Baymard Institute study reinforcing that account creation friction hinders conversion:
— “Attribution only matters when using paid marketing channels.”
If you’re investing sweat equity into marketing your business, then understanding those results are imperative. Whether it’s blogging, attending conferences, link building, etc., you’re expecting each of those efforts to produce some sort of ROI. It doesn’t have to be a conversion event either — it could be acquiring leads/emails too, which is why attribution is even more important here.
Here’s an example scenario:
- Blogging increases the total # of users to your website by 10x, but they don’t lead to an increase in conversions on your website when looking at last-touch conversions.
- You attend a trade show and acquired 10 new customers who purchased an average of $100.
Let’s assume your website has an $AOV of $50, and all of this additional non-qualified traffic from the blog decreases your site wide conversion rate by 20% … it went from 1% to 0.8%.
You’d assume the trade show is more important for marketing, right?
- Trade show = $1,000 revenue (10 customers x $100)
- Blogging = $0 revenue AND it hurt conversion rate by 20%
Not so fast.
Hopefully you’ve seen an increase in your overall revenue from the website:
Without going more granular to look at the costs of trade show and blogging time, we can see that blogging is in fact leading to additional top-line revenue … albeit not via last-touch.
I’m aware there are hundreds of holes that could be poked through this basic analysis (Costs? What about other leads from trade show? What about promos during the time period this was measured?) but hopefully you get the idea :).
Don’t take the results of last-touch at face value. Some channels are meant to drive more users to your site that you can then nurture through the sales process, while others are meant to be last-touch closers.
Attribution isn’t easy, especially in a world of eCommerce where users are “guests” on your site and pop around on different devices throughout the day. So don’t feel bad if it seems like you’re behind your competition by not utilizing attribution analysis … the majority hasn’t mastered it yet either!
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