The Ultimate Guide to ECommerce Attribution
February 28, 2023
As an eCommerce seller, you probably have experience running ads to reach more customers. Perhaps you’re managing campaigns on Google, Facebook, Amazon and Youtube. You see that your sales are going up, but the data on which ads perform the best is blurry. Consumers might not click on the first ad they see, even if it makes the biggest impact on their eventual decision to purchase. Many people google a brand or type in the website URL directly, meaning you get no information on what ads were most effective. ECommerce attribution offers a solution to this issue, granting you a clearer view of your customers’ digital journey. In this guide we will explain what exactly eCommerce attribution is, and how you can use it to run more effective ads.
Table of Contents:
- What Is ECommerce Attribution?
- Types of Attribution Models
- First Click Attribution
- Last Click Attribution
- Linear Attribution
- Positional Attribution
- Time Decay Attribution
- Paid Only Attribution
- Data-Driven Attribution
- Why Use ECommerce Attribution?
- How to Fund Your Marketing Campaigns
Before making a purchase, eCommerce customers often go through a journey that involves social media scrolling, keyword searches, and email reminders. Every time they click on one of your ads or links, interact with a pop-up page, or start adding products to their shopping cart, that is considered a conversion. Each of these steps brings them closer to going through with their purchase. Because of this, to grow your success, you should consider getting a solid understanding of which ad influences customers to buy the most.
The picture painted by your current analytics might just be leading you down the wrong path. For example, your stats could show that a majority of your traffic comes from social media ads, but 100% of your sales result from Google searches. How do you give credit for those sales? ECommerce attribution provides a better understanding of each point of contact a customer has with a brand. More importantly, it also tries to gauge how influential each of them was in getting the customer to buy something. This means gaining a better ability to identify which campaigns succeed the most and should be boosted, as well as which ones aren’t doing well and can be discontinued.
There are several models of eCommerce attribution. Deciding which model works best for you will depend on your analytics, but that does not mean you are locked into one strategy or another. In fact, multi-touch attribution allows you to see your return on your investments from multiple angles – the highs and the lows. All of these models are based on tracking your customer’s journey through the conversion funnel, which means the points of contact with your brand they experience before deciding to purchase something.
First click attribution follows the initial point of contact with a potential customer, tracking when they come to your website for the first time. It focuses on the moment they become aware of your brand and how it happened, whether through an organic search or a paid ad. This model of eCommerce attribution credits the final sale to that first visit to your site. Doing so provides simplicity and straightforwardness. However, it misses out on the whole rest of the journey customers go through, such as ad campaigns that target them after that first point of contact.
Conversely to first click attribution, last click attribution gives total credit for the sale to the last interaction the customer had with your product. That means the final time they clicked on one of your links before making a purchase. This could have been through a CTA (call to action) button in an email, a PPC (pay-per-click) ad, your online chatbot, or a Google search. Last click attribution sees the final ad a customer saw as the key to their purchase, the push that got them through the conversion funnel and into the action phase.
This is often more accurate than first click since it suggests that the final touchpoint triggered the sale. However, on its own, last click attribution does not take the role all other touchpoints played in the conversion funnel into account. An organic search may have produced the first click which led to the last click. Analysts who use the final click model argue that the final touchpoint is the most important because it triggered the purchase.
Linear attribution tracks each point of contact across a customer’s journey and gives equal credit to all of them. This method ensures that no instance of contact is overlooked, which is helpful for new businesses that want to understand which of their methods is working. However, since it doesn’t differentiate between touchpoints’ importance it also has its limits. It offers no way to measure or account for how impactful each of them was. So if a company is trying to decide which of its marketing channels is most effective and should be expanded upon, or vice versa, linear attribution wouldn’t be helpful.
While first click attribution and last click attribution give either the initial or final point of contact all the credit, and linear attribution gives it to all points equally, there is a way to combine these schools of thought. Positional attribution suggests that the first and last touchpoints are the most important, but not exclusively. It holds that additional factors, like PPC ads, a chatbot, or emails, also make an impact, although a smaller one. With this model you would focus your funding on the touchpoint that wets your target audience’s appetitive, as well as the one that gets them over the line in completing a purchase.
Usually, the initial and primal points of contact share 40% of the credit for a conversion each, while all factors in between contribute the remaining 20%. This is generally considered a balanced approach, especially compared to the three alternatives listed previously. Normally a company would concentrate its focus on search engine results or social media ads and then the final call to action on its website when following this approach.
Following the path of multi-touch models listed above, the time decay attribution model agrees that certain touchpoints hold more value than others. Instead of weighing the first and last click equally to or more heavily than other touchpoints, time decay is more concerned with how much time has passed between clicks and conversions. Ultimately, the closer a touchpoint is to the moment of purchase, the more important it is.
The situation could look like this: a customer discovered your brand thanks to a Facebook ad and visited your website without buying anything. A week later, a Google retargeting ad draws them back and they make a purchase. In this scenario, the first ad is not dismissed as it piqued the interest of the consumer, but the retargeting ad gets most of the credit since it led to a sale directly. Compared to linear attribution, time decay attribution allows for a better understanding of how each touchpoint influences a consumer’s conversion journey.
Paid only attribution is similar to linear attribution, although it focuses entirely on the performance of paid ads. It tracks how much traffic they bring to a site, and how many conversions this leads to. The goal behind this model is to closely monitor marketing campaigns that cost a business money, so it can boost or reduce them, depending on their impact. This is done in order to cut costs and make ads more efficient. However, paid only attribution doesn’t account for organic engagement, like consumers reaching your site from search results. That means whatever insight it provides will be incomplete. Its main use is to evaluate paid ad campaign performance in order to prevent money from being wasted.
Data-driven attribution is based on your company’s touchpoints with consumers over a certain period of time. The data is based on individual marketing strategies or advertisements and how well they fare with your customers. This method looks at conversions you have already secured and compares them to consumers who dropped off the conversion journey. Their keyword searches and clicks are tracked to find out which paid advertisements they engaged with. This is done to build an understanding about which ads drive engagement with your audience and which ones don’t. Unlike first or last click attribution, which follow a single person’s journey, datadriven attribution compares all of your consumers’ conversions.
After previously having stuck with last click attribution, this is the model that Google uses since September 2021. It is generally seen as a better way to assign credit to each touchpoint in relation to their effectiveness in getting a customer to buy your product.
Using these eCommerce attribution models can help you improve your ad performance and develop a real understanding of how effective your campaigns are. Having such insight makes upgrading your marketing performance much more straightforward, as you will be able to see what is working, and what isn’t. This should result in better investment of funds, stronger ad results, more conversions, and, crucially, more sales. Choose the right eCommerce attribution model for your business, whether it be single or multi-touch, in order to grow more successfully.
Without properly understanding how and why your ads perform the way they do, you risk falling behind competitors that are maximizing their marketing impact. Even if you see no need to delve into the details of eCommerce attribution because your ads are performing well currently, know that this can change quickly. The marketing landscape is very volatile, and a tweak to Google’s code can cause huge changes overnight. Getting a strong grasp of the ins and out of ad engagement early on will help you adapt to future changes that much better.
Running large ad campaigns takes serious funding. One of small eCommerce sellers’ biggest issues is managing their cash flow, which can hamper their ability to invest in their ideas. In order to fund successful marketing campaigns, you might want to consider an 8fig Growth Plan. It entails getting continuous capital injections when you most need them. That means being able to invest in everything from better marketing to larger batches of product, it’s entirely up to you. And the best part is that our remittance schedule is customized for your business, meaning you will have maximum cash flow. If you would like to read more about the platform, SellerApp wrote this in-depth 8fig review, taking a close look at each feature. Sign up today to take your company to the next level.
The 8fig Team is an experienced group of eCommerce writers and experts committed to helping online sellers grow their businesses through informative content and guides. Whether you're looking to increase sales or build your brand, we have the knowledge and expertise to help you succeed.