Ecommerce retailers already know the importance of attribution.
Attribution is how you know which of your sales and marketing channels are working — and which ones aren’t, so you can adjust your strategies and boost revenue.
But in this digital world we live in, attribution is a lot less simple than it used to be. Ecommerce retailers now have an expansive (and constantly growing) variety of digital touchpoints they can use to reach their customers, and when customers interact with companies in more and more new ways every day, it gets harder to cleanly track attribution and other important metrics that will help keep your sales funnel optimized.
What’s an ecommerce retailer to do? Well, we have the answers, and they come in the form of multichannel attribution — and one game-changing tool that will take your omnichannel strategy to the next level. Ready to learn more? Read on.
What Is Multichannel Attribution?
Let’s say you own an ecommerce store that sells backpacks.
You make a sale of one of your backpacks to a customer who first discovered your product from a YouTube influencer review. They clicked the link in the video description and browsed your website, but didn’t actually make a purchase until later, when they were scrolling Instagram and saw a paid ad for your site.
So which channel do you attribute that sale to: YouTube, or Instagram?
This is where multichannel attribution comes in. Multichannel attribution allows you to create a set of rules — based on your buyer experience and sales funnel — that determines how you give credit to different marketing and sales channels for the revenue they bring in. It’s an important way of keeping track of your ROI on different channels, and knowing what’s working and what’s not. This allows you to make changes to your marketing and sales touchpoints to increase revenue over time.
Multichannel attribution can be set up in a lot of different ways.
This is one of the most common types of multichannel attribution, and is great for sellers who want to see the big picture of their entire customer journey. Linear attribution assigns equal credit to every channel the customer engages with before they make a purchase.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and make a purchase. With linear attribution, YouTube, Instagram, and targeted paid advertising would all get equal attribution for the sale.
In this type of multichannel attribution, all credit is given to the first channel that drives a customer to make a purchase, for that sale and for all future sales.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and make a purchase. Later, they make a second purchase after clicking on an email campaign. With first-order attribution, credit for both purchases would go to paid Instagram ads, as that’s the channel that drove the first purchase.
First-click attribution gives all the sales credit to the channel where the customer makes their first click, regardless of how they end up purchasing a product.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and make a purchase. With first-click attribution, credit for the sale would go to the influencer marketing campaign that produced the review video on YouTube, since that’s how the customer first clicked through to your website.
Last-click attribution is just like it sounds — it gives credit to the channel where the customer made their last click prior to making a purchase.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and make a purchase. Later, they click through an email campaign and make another purchase. With last-click attribution, the first sale would be attributed to targeted Instagram ads, while the second sale would be attributed to the email campaign.
Position-based attribution is similar to the linear model in that it assigns credit to every channel along the customer’s entire journey — but it gives proportional credit based on where in the journey the touchpoint falls. Typically, 40 percent of the attribution is given to the first and last touchpoints, and 20 percent is spread evenly among any touchpoint in between them.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and sign up for an email newsletter. They click through an email campaign later and make a purchase. With position-based attribution, 40 percent of the credit would be given to influencer marketing on YouTube, and an additional 40 percent would be given to the email campaign that led to the purchase. 20 percent would be attributed to targeted Instagram ads.
Similar to position-based attribution, time-decay attribution distributes credit among all the channels a customer engages with on their way to making a purchase. Under this model, though, more attribution credit is given to channels that are closer to the point of purchase.
Example: A customer visits your website via the link in a YouTube video description. Then, they see a targeted Instagram ad and sign up for an email newsletter. They click through an email campaign later and make a purchase. Under time-decay attribution, you might attribute 50 percent of credit for the sale to the email campaign, 30 percent to targeted Instagram ads, and 20 percent to YouTube.
An increasingly popular model of multichannel attribution is algorithmic, which is becoming more feasible for ecommerce retailers as they utilize more advanced technology to help track sales metrics. This model analyzes past touchpoints to determine which channels are most predictive of sales and revenue. This is an especially useful model for businesses that have many channels and campaigns, or tend to have particularly complex customer journeys.
Custom Attribution Models
It’s possible that none of these common multichannel attribution models are a good fit for your business, and that’s OK. Sellers can always create their own custom multichannel attribution models that are specific to their own sales cycles.
Creating a Multichannel Attribution Model: Step-by-Step
Before choosing one of the multichannel attribution models we’ve already covered, there are some steps you need to take to prepare your data and your business. Ready to get started with multichannel attribution? Here are the first steps to take.
Step 1: Define Your Questions
The first step is to sit down and think about your customer journey, your sales funnel, and what you need to know about your sales and marketing channels to make them better.
Some potential questions ecommerce sellers might define at this point are:
- What share of revenue comes from each channel in my omnichannel strategy?
- At what point in the buyer journey should I start to encourage customers to make a purchase? And what channel is best for doing so?
- How many of my offline shoppers are influenced by online campaigns?
Remember, these are just example questions. As every business is different, the questions you define to increase your sales and revenue might be totally different from these.
Step 2: Find Relevant Data
Once you’ve narrowed down what questions you’d like answered about your omnichannel efforts, it’s time to start collecting relevant data. This can come from a lot of different platforms and tools.
Relevant data sets can come from ad platforms like Google Ads, Facebook, and Twitter; email marketing platforms; mobile analytics systems; call tracking; your CRM; and other sources.
Step 3: Choose a Multichannel Attribution Model
Once you’ve defined questions and started collecting the right data to answer them, you can choose a multichannel attribution model, like one of the ones we described earlier in this article.
If none of those seem like a good fit for your buyer journey, you can create a custom model better suited to how you market and sell your products.
Step 4: Track Your Results
As you begin to collect results from the multichannel attribution model you chose, you’ll want to track them in one place, like a dashboard, where you can easily spot patterns and see if channels are underperforming and need a new strategy or approach.
The challenge here, of course, is that multichannel attribution creates a ton of data that needs to be organized and analyzed so your business can make the best use of it. That’s a challenge that’s easily met, with the right tools — but more on that in a minute.
Step 5: Act on Results and Iterate
And now for the likely reason you became interested in multichannel attribution in the first place: So you can take that attribution data and turn it into revenue-boosting value for your business.
That’s the last step in this process: Analyze the data from your results and iterate to improve sales or revenue. Invest more into high-performing channels. A/B test new buyer journeys to see how they compare.
Of course, analyzing data and iterating on it is easier said than done. That’s why you need the right tools for the job.
Multichannel Attribution: Tools and Best Practices
As you’ve probably gathered, it takes some pretty advanced digital tools to successfully implement a multichannel attribution model. You need to be able to collect and track a lot of product and sales data from every channel and touchpoint your business uses to interact with customers.
Sure, you can pull data from multiple sources and analyze it all by hand. But there’s actually no need to waste all that time — you can have one tool aggregate your most important business metrics and automatically create dashboards that help generate insights that improve your business.
It’s an ecommerce retailer’s secret weapon: Product information management (PIM) software.
Not only can the right PIM keep your massive amounts of product information up-to-date and ready to distribute to any sales or marketing channel, playing a vital role in any strong omnichannel strategy — the best PIM can also help you track and optimize important ecommerce metrics to ensure you’re maximizing all your sales strategies.