How to Choose and Use the Best Marketing Campaign Lead Attribution Model

Highlights

  • Forrester reveals that 82 percent of CMOs report that their marketing goals are aligned to company revenue targets. However, that same group is challenged to identify the campaigns and marketing investments that drive revenue growth.
  • A lead attribution model determines which marketing campaigns, touchpoints or interactions achieve conversions or have a measurable impact on the customers' decision to purchase. It's a requirement to accurate campaign performance reporting and to optimize spend, but it's not easy to do.
  • Campaign reports without accurate attribution deliver erroneous performance and ROI results that create additional downstream inaccuracies in budget allocation, cost per lead, cost per customer acquisition, marketing ROI and elsewhere. Without an accurate lead attribution model your marketing reports are more like vanity metrics and are misleading you.
  • The challenges and solutions are different for different industries. In this post I'll share how to choose the best marketing lead attribution model to report which campaign, interaction and channel contributed to each conversion for both B2B and B2C industries.
Johnny Grow Revenue Growth Consulting

A Lead Attribution Model to Fix a Vexing Challenge

When it comes to measuring marketing investments, I think John Wanamaker's quote from about a hundred years ago still applies.

Marketing Reporting

Marketing campaigns deliver messages, offers or calls to action through different mediums or channels.

Attributing success by identifying the campaign, flight or interaction that generates each new sales lead is a requirement to measure campaign performance, customer acquisition costs and marketing ROI.

When marketing campaigns were one flight, single-channel distributions, attributing the acquired leads to the campaign was easy. Unfortunately, marketing campaign research shows one-off campaigns are are far less effective than other types.

That's why nurture campaigns, omni-channel campaigns and integrated marketing campaigns have stepped up. And while they outperform one-and-done campaigns, they are difficult to measure.

For example, in a 5-flight nurture campaign, which flights contributed to the conversion and which didn't? Without this information you have no way to stop investing in messages and channels that don't work and double down on the ones that do.

And to exacerbate the challenge don't expect much help from your CRM system or Marketing Automation Platform (MAP). Almost all of these applications, including market leaders such as Adobe, Salesforce and Microsoft Dynamics, are generally configured to attribute new leads to either the first flight or the last flight. In a 5-flight campaign, your odds of being correct are about one in five and your performance reporting is about four-fifths inaccurate.

How to Solve the Challenge of Marketing Campaign Attribution

A marketing lead attribution model can fix this challenge. It weighs each campaign distribution to determine its effectiveness. It assigns value to each distribution so its success, or lack thereof, can be measured by campaign and in the aggregate.

However, there is no one size fits all method that works best for all companies. They vary by industry, sales cycle and marketing sophistication.

But there are two categories of lead attribution models, single-touch and multi-touch, and each has its own measurements.

Single-Touch Attribution Models

These two models are extremely simple and identify just the one interaction that was most influential in the campaign conversion.

  1. First-Touch Attribution
    This model assigns all credit for the conversion to the first distribution that the lead engaged with. The upside is its simplicity. The downside is that additional flights or engagement that may have contributed to a sale are ignored and under-reported.
First Touch Lead Attribution Model
  1. Last-Touch Attribution
    This method does just the opposite and assigns all credit for the conversion to the last distribution that achieved engagement. Its upside is also simplicity, but its downside is that it ignores all prior interactions. This means your bottom of the funnel metrics may be valid, but your top of the funnel metrics will be under-counted and invalid. Last touch attribution can work in B2C industries, but seldom in B2B industries is a single distribution responsible for a new customer acquisition.
Last Touch Lead Attribution Model

Single source methods can be appropriate for short sales cycles. And when they fit, they avoid complexity and allow easy system automation as almost every CRM and marketing automation system can be configured to automatically attribute campaign success to either the first or last touch.

However, they can be overly arbitrary. And when they don't fit, they distort the buyer journey and create inaccurate campaign performance reporting, which then impairs a host of downstream marketing performance metrics.

Multi-Touch Attribution Models

Multi-touch or multi-source models weigh the relative influence and assign value to all the touchpoints.

Each contributing interaction, flight or channel is given a proportional revenue credit for its contribution to the final conversion. Compared to single channel attribution, these methods deliver more accurate performance reporting. However, their downside is their complexity.

There are five popular multi-touch attribution models.

  1. Linear Model
    This is the simplest of the multi-touch attribution models as it assigns equal revenue credit to all touchpoints which registered buyer engagement. So, for a 5 flight nurture campaign, each flight gets 20 percent credit.
Linear Lead Attribution Model

While its simplicity is attractive, it may be very presumptuous to believe that all distributions were equally effective. That presumption creates reporting that inflates under-performing flights and deflates the best performers.

  1. Time Decay Model
    This multi-touch method gives more credit to the more recent touchpoints, that is the touchpoints that occur closest to the conversion. It assumes the earlier interactions on the path to purchase were not as impactful.
Time Decay Lead Attribution Model

The upside of this method is that it is an easy calculation that supports a large number of interactions.

The downside is that it favors down funnel conversion metrics and disfavors top of the funnel metrics. That may be okay for longer sales cycles where more recent activities carry more weight.

  1. U-Shaped Model
    This method assigns 40 percent revenue credit to the first touch, 40 percent credit to the touch that created the lead record (i.e., the lead conversion) and evenly allocates 20 percent to the touches in between.
U-Shaped Lead Attribution Model

The upside is that this method favors campaigns that drive initial visits and lead conversions. This can be appropriate for companies with big lead gen or demand gen groups.

The downside is that it excludes the effectiveness of campaign interactions after the lead conversion. All revenue credit is assigned to interactions that generate leads, with no credit given to interactions that aid or achieve sales conversions.

  1. W-Shaped Model
    This multi-source method is an extension to the prior U-shaped model. It assigns revenue credit to the additional touchpoint that created the opportunity record. So, it assigns 30 percent revenue credit to the first touch, 30 percent to the touch that created the lead record, 30 percent to the touch that created the opportunity record, and evenly allocates the final 10 percent to any additional touches in between.
W-Shaped Lead Attribution Model

The upside is that it gives credit and measures effectiveness of interactions that create sale opportunities. That can be very helpful for companies that track MQL to SQL conversions.

The downside it that it adds slightly more complexity and provides no visibility or reporting for campaigns that advance sale opportunities.

  1. Full-Path Model
    Somewhat indicative of the name, the final multi-touch lead attribution model provides the fullest sales cycle coverage. It assigns 22.5 percent revenue credit to the first interaction, 22.5 percent to the interaction that created the lead record, 22.5 percent to the interaction that created the sale opportunity, 22.5% percent to the interaction that closed the deal and evenly allocates the remaining 10 percent among all other interactions.
Full Path Lead Attribution Model

This method can work for B2B sales where the sale opportunity can be won in a single event. It's popular with SaaS companies that sell through SDRs (Sales Development Representatives) and use demos with free trials or low risk offers as the closing event. It's also a recognized marketing campaign best practice. However, it's less likely to work for more complex sales transactions that require multiple sales process steps to get the deal done.

So, Which Marketing Lead Attribution Model is Best?

B2C Marketing Campaigns

B2C marketing campaigns generally promote impulse purchases to individual consumers. Their durations are short and interactions are few so single touch attribution methods such as first touch and last touch work well.

Sometimes B2C marketers will insert an additional attribution variable for things like device. This leads to multi-device attribution tracking so marketers can understand which devices, such as smartphone, tablet, laptop, desktop, TV, or kiosk, contributed to the conversion.

B2B Marketing Campaigns

B2B marketing campaigns have longer paths to purchase and far more buyer interactions with more people in the same company.

And B2B buyers consume a lot more content to educate themselves. According to Forrester, 68 percent of B2B buyers conduct online research, 60 percent prefer not to engage a salesperson as their primary source of information, and 62 percent say they down-select their vendor shortlist based entirely on digital content (source: Forrester/Internet Retailer US B2B Buyer Channel Preferences Online Survey.)

That online self-education process creates a multiplier effect in terms of interactions and content. In fact, some research by Adobe found that B2B customers are exposed to a brand an average of 36 times, and engage with multiple campaigns and channels, before finally making a purchase.

That means B2B marketers must avoid the mistake of measuring multiple disconnected campaigns that are really a single extended engagement for a single buyer over a lengthy purchase cycle. Connecting the dots of the buyer's purchase process is needed to avoid granting credit to ineffective interactions during the sales cycle.

Multi-touch attribution models are needed for B2B marketing campaigns. The best marketing lead attribution model will depend on your sales cycle duration, complexity, and number of buyer interactions during the customers' purchase journey.

See the marketing attribution measurement models that solve the vexing challenge of campaign attribution and accurate performance reporting.

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The Point is This

If marketing campaign attribution was easy, everyone would do it. It's not easy but it increases conversions, improves marketing spend and raises marketing ROI.

Some marketers apply the models verbatim. Others use them as guidelines and adapt them over iterations to improve measurements and performance reporting over time.

Technology is also stepping up. Now that most CRM and marketing automation systems include artificial intelligence (AI) many marketers are building custom algorithms and achieving both system automation and improved scoring.

In fact, the client experience that triggered me to write this post was assisting a life sciences company that used Salesforce to build an Einstein algorithm to track some pretty complex sales cycles. About 90 days after the deployment, the measurements completely reallocated the marketing budget and has since driven double digit increases to the marketing budget ROI.