An attribution model is a practice that determines how credit for sales and conversions is assigned to different channels across different touchpoints in the buyer journey. It’s the process of connecting various campaigns to a company’s ROI.
The attribution model you use for Pay per Click campaigns, ad groups, keywords, ads, etc. get credit for your conversions.
Attribution modeling has always been important since your prospects frequently engage with your business via a broad range of channels before ultimately converting and you need to understand how much value each channel deserves. Now attribution modeling is more important than ever because so many people are using their smartphones for initial research and then making purchases using a secondary device (e. g. tablet, laptop, desktop).
What Attribution Models Does Google AdWords Use?
Google AdWords offers six attribution models.
Last click:
The last click gets all the credit for the conversion. If a customer clicks two of your ads, AdWords will credit the conversion to the second ad (and the associated keyword, campaign, etc.).
First click:
The first click gets all the credit for the conversion. If a customer clicks two of your ads, AdWords will credit the conversion to the first ad (and the associated keyword, campaign, etc.).
Linear:
Credit for the conversion gets distributed equally to every single click the customer made before converting.
Time decay:
Every click gets some credit, but the closer the click is in the journey to the final conversion, the more credit it gets.
Position-based:
If there are more than two clicks in the journey, the first and last clicks each receive 40% of the credit for the conversion and the intervening click(s) get the remaining 20%, spread out evenly.
Data-driven:
Google looks at thousands of signals to distribute credit for the conversion based upon its algorithmic understanding of how important each click was to the final conversion. This method is only available for accounts with a lot of data. Google doesn’t specify how much data you need to have, but in our experience, you need to have tens of thousands of clicks per month.
Which Google AdWords Attribution Model Should You Use?
Last-click attribution has been the default attribution method for the advertising world for many years. However, last-click attribution is generally NOT the best attribution model to use. Google considers Data-driven attribution as the best model. Google’s algorithms analyze thousands of signals, way too many for us mere mortals to assess, to identify how much impact each click had on the final conversion.
Most accounts don’t have enough data to use data-driven attribution, so usually the next-best model is time decay attribution.
Unlike first click and last click, it assigns at least some conversion value to every click in the conversion journey. Unlike linear, it recognizes that not every click in the journey is the same. Time decay assumes that the closer a click was to the time of the conversion, the more impact the click had on driving the person to convert, which is different than the assumption that position-based makes.
The right attribution model can tell you how much each channel contributes to your business objectives, such as profits, revenue, new business, and customer retention. By understanding which channels are driving the most impact across the different touchpoints of the sales funnel, you can better allocate advertising budget and invest in channels that have a higher conversion rate.
Using a more accurate attribution model helps you improve your Return on Investment.
