Navigating the digital marketing landscape is akin to sailing uncharted waters. In this vast sea of analytics, optimizing your attribution strategy is the beacon that guides you through, helping you make sure your ROI remains solid.
In this article, we’ll explore a relatively sophisticated yet highly rewarding attribution model: position-based modeling. It brings with it a new level of fairness and insight to the way we assess the efficiency of our marketing efforts.
Understanding Attribution in Marketing
It’s important to first understand what attribution in marketing means before we look at the nuances of a new model.
Attribution is the process of understanding which marketing channels are responsible for customer acquisition.
In simpler terms, it’s a way to give credit to different touchpoints (e.g., ads, social media, website visits) that contributed to a conversion. It allows us to allocate marketing budgets in the most effective ways possible – all by emphasizing the most successful channels.
In a world where customers interact with brands through a multitude of platforms and devices, the traditional ‘last click’ attribution has started to become outdated and unfair. It fails to acknowledge the powerful influence of initial or even constant brand touchpoints.
New models like position-based, data-driven attribution, establish a fairer value distribution and give us a more accurate view of the customer’s path to purchase.
Position-Based Modeling (The 40-20-40 Rule)
Position-based modeling, often referred to as the 40-20-40 rule, is a multi-touch attribution model that allocates credit in a way that values the first and last touch points equally while distributing the rest of the credited value across all interactions.
The 40-20-40 rule is simple. The first interaction is given 40% credit, the last interaction gets 40% credit, and all middle interactions share the remaining 20%.
This approach assumes that the first contact generated interest while the last interaction clinched the deal. The middle interactions are viewed as supporting the customer’s decision-making process.
Imagine a luxury watch company that invests in three types of advertising: display ads, content marketing, and influencer collaborations.
Under the 40-20-40 model, a potential customer might first become aware of the brand through a display ad (40% credit) on a luxury magazine website, later research the brand through an influencer blog post (20% credit), and eventually make a purchase after seeing a targeted social media ad (40% credit).
This model recognizes that the first display ad played a significant role in initiating the buyer’s journey, while the influencer post and the social media ad worked in tandem to nurture and close the deal.
Benefits of Position-Based Modeling
Position-based modeling offers several advantages over single-touch models, primarily because it recognizes the complex reality of customer journeys. It doesn’t paint a picture in black and white – it acknowledges those gray areas.
By allocating credit among multiple touchpoints, the 40-20-40 model reflects a more equitable distribution of marketing success. It isn’t overly generous to the first or the last touch but instead recognizes the often collaborative efforts of a myriad of marketing touchpoints.
This model also provides a highly nuanced understanding of the customer’s path. You can now see which channels are excellent at generating interest versus those that are good for closing sales. This insight is invaluable for tailoring campaigns and gaining a competitive edge.
Finally, it can help improve your decision-making. With accurate crediting, you can make data-driven decisions, knowing exactly where to invest to achieve the best results. This can dramatically improve marketing efficiency and ROI.
Steps to Implement Position-Based Modeling
Adopting a new attribution model can seem daunting, but with the right approach, it is incredibly beneficial.
Start by mapping out all possible interactions a customer might have with your brand. This can be anything from seeing a social media ad to reading a blog post or even a recommendation from a friend.
The next step is where the 40-20-40 rule comes in. For each touchpoint in the customer’s path, you’ll assign credit according to the model. This needs to be done consistently across all your campaigns to ensure a fair comparison.
Use analytics and CRM data to track customer behaviors. By recording which touchpoints led to conversions and the type of conversions each touchpoint influenced, you can start to build up a picture of the most effective channels.
And finally, once you have data, you can give it actionable meaning by analyzing trends. Determine which channels work best at different stages of the customer’s journey, and shift your budget to reflect this insight.
Key Takeaways
The best way to introduce position-based modeling is gradually.
Remember: smart marketers are always on the lookout for better ways to understand and engage with their audience.
Maintaining a strategic advantage is increasingly challenging yet critical for success. The position-based modeling approach we’ve explored here may very well be the game-changer your marketing strategy needs.
Start adopting position-based modeling today. Watch as your insights grow richer – and your campaigns more impactful.
Matthew is a seasoned researcher and writer with over five years of experience creating engaging SEO content. He is passionate about exploring new ideas and sharing his knowledge through writing. Matthew has a keen eye for detail and takes pride in producing content that is not only informative but also visually appealing. He constantly expands his skill set and stays up-to-date with the latest SEO trends to ensure that his content always performs well in search rankings. Matthew can be found reading, surfing, or experimenting with new recipes in the kitchen when he’s not writing.
