Attribution for eCommerce 101
eCommerce attribution is perceived as one of the most complex areas of analytics, so much that many eCommerce founders, as well as marketers don't really bother to think about it.
However, it is tough to understand the unique value of each marketing channel without it.
In an eCommerce world where ROAS and gross margins are king, eCommerce attribution is a tool for marketers to understand what to cut and where to double down.
But what is attribution?
An attribution model is a backward-looking analytics system that allows you to credit your various customer touchpoints for a percentage of the sale or conversion. That includes your advertising channels (Facebook, Instagram, Google Ads), touches with your support team, and even visits to any physical stores if you have them.
Types of attribution models
There are many attribution systems used by marketers and analytics platforms. These are some of the most popular:
- Last touch, or last click: the final touchpoint gets all the credit for the sale, regardless of any other touches that may have set up the sale. It is very common, effortless to set up, and very popular because of that, but it is flawed. Assigning all the weight to the last action, disregards most of the buyer's lifecycle.
- First touch, or first click: the opposite from last touch - the first touch gets all the credit, regardless of any efforts you may have done to nurture the contact on their way to the sale. Great if you want to understand what type of campaigns bring awareness to your brand, but often inaccurate because of cookie expiration times.
- Linear: all touchpoints get equal weight. Unlikely to be accurate, but accurate enough. By definition, not all touches are made equal, so the spread between the real value and the value attributed by the linear model is likely to give you an inaccurate view of things.
- Time-decay: all touchpoints get credit. However, the touchpoints closer to the sale get drastically more weight than those early in the path. In our opinion, the hardest to set up (particularly if you don't have an expensive analytics solution) but the most accurate to eCommerce mechanics.
The perfect attribution model for your eCommerce brand
Figuring out which attribution model works best for your brand depends on your vertical, your LTV/AOV multiple, and your marketing spend breakdown, among other factors.
Most businesses that are advanced in attribution choose a custom model, set up by them or a consultant that provides proper weighting to touches based on that business' unique mechanics. eCommerce attribution modeling is a creative art, and like all, it requires interpretation.
Which marketing channels do you use? Which ones don't you use? Which ones are directly converting? Which ones are assists, or 'soft conversions', that set up sales later in the funnel, how does the average purchasing path look like? Where are you finding the best ROAS?
Those are all questions that have to be answered, which happen to be unique to your business.