Understanding Attribution Through a Case Study

Imagine you are managing three marketing channels—Channel 1, Channel 2, and Channel 3—that drive traffic to your website, leading to primary conversions for your business. Your goal is to analyze the performance of these channels based on first-click and last-click conversions and decide how to allocate an additional 25% budget effectively.

 

Key Insights:

  • All three channels have potential for scaling.
  • They attract users with similar Customer Lifetime Value (CLTV).

Channel Performance Analysis:

  • Channel 1: First-click and last-click conversions are nearly identical.
  • Channel 2: First-click conversions are 80% of last-click conversions.
  • Channel 3: First-click conversions are 112% of last-click conversions.

 

Warm-Up: Attribution Basics

Attribution in digital marketing is crucial yet often misunderstood.

  • First-Click Attribution: Credits the first touchpoint that initiates the customer journey, like the initial spark.
  • Last-Click Attribution: Credits the final touchpoint before the conversion, often seen as the decisive moment.

Deeper Dive into Attribution

In digital marketing, channels typically align with three objectives:

  1. Awareness Creation: Campaigns designed to make a lasting impression and drive initial traffic, though not immediate conversions.
  2. Driving Consideration: Campaigns that move users closer to making a purchase.
  3. Aiding Conversion: Campaigns that push undecided users towards conversion.

Case Study Analysis

  • Channel with Both First and Last Clicks: Indicates that it either stands alone in the customer journey or covers the entire marketing spectrum, from awareness to conversion.
  • Channel with More First-Click Conversions: Implies high brand awareness, though conversions may occur through other channels.

For example, in search engine marketing (SEM) for an air travel brand, broad keywords (e.g., “Bangalore to Chennai”) drive initial awareness (first-click), while specific keywords (e.g., “Bangalore to Chennai Indigo morning flights”) drive final conversions (last-click).

In a multi-channel scenario, social media often drives first-click conversions, whereas search channels drive last-click conversions.

Conclusion: Optimal Channel Allocation

  • Channel with Both First and Last Clicks: Scale this channel first if it can be further optimized.
  • High First-Click Conversion Channel: Choose this next if the previous channel’s efficiency drops and there’s no competitive advantage.
  • High Last-Click Conversion Channel: Scaling this channel alone may not increase overall conversions, as it likely relies on other channels for initial engagement.

In our case study, prioritizing Channel 1 makes sense if it drives both first and last clicks effectively. If Channel 1’s performance plateaus, focus on Channel 3 for its high first-click conversions, which drive awareness and eventually feed into other channels like Channel 2 for final conversions.

That’s all from my side. Share your thoughts and questions in the comments!