Comparing Last-Click Attribution vs. Data-Driven Attribution

Google has recently announced the depreciation of several attribution models, narrowing our choices down to Last-Click Attribution and Data-Driven Attribution. The complete phase-out of the outgoing models is targeted for September. Google’s rationale behind this decision is the low adoption rate of these models. Given these changes, it’s an opportune moment to revisit and examine the differences between Last-Click Attribution and Data-Driven Attribution, allowing us to better understand their implications for marketing performance and decision-making.

Attribution models help businesses understand how their marketing channels contribute to conversions. In this comparison, we will examine the differences between Google’s Last-Click Attribution Model and Data-Driven Attribution Model, as well as discuss the benefits of moving to a data-driven approach. Additionally, we will address the concept of fractional conversions in Data-Driven Attribution, explaining why it occurs and how it contributes to a more accurate understanding of marketing performance.

Definition and Approach

Last-Click Attribution:

• Last-Click Attribution assigns 100% of the credit for a conversion to the last touchpoint a user interacted with before converting.
• This model is simple, easy to understand, and has been the traditional go-to for many marketers.
• However, it doesn’t consider the contribution of earlier touchpoints in the user’s conversion journey, which can lead to an incomplete understanding of marketing performance.

Data-Driven Attribution:

• Data-Driven Attribution uses advanced machine learning algorithms to analyze historical conversion data and determine the most effective touchpoints in driving conversions.
• By considering multiple touchpoints and their contributions, this model provides a more accurate representation of marketing channel effectiveness.
• Data-Driven Attribution is more complex than Last-Click Attribution and requires a sufficient volume of conversion data to work effectively.

How They Work

Last-Click Attribution:

• In this model, the system simply attributes the entire credit for a conversion to the final touchpoint before the conversion.
• It does not take into account the roles played by other touchpoints in the user’s journey.

Data-Driven Attribution

• This model uses machine learning to analyze patterns in conversion data and assign credit to each touchpoint based on its effectiveness.
• It considers multiple factors, such as the order of touchpoints, time between interactions, and interaction with other channels.
• The algorithms take into account user behavior patterns and the likelihood of a conversion based on the presence or absence of specific touchpoints.
• Data-Driven Attribution also accounts for factors such as channel fatigue, frequency, and recency of exposure to ads, which helps in understanding the diminishing or increasing returns of marketing efforts.
• By processing large volumes of conversion data, the model identifies trends and correlations between touchpoints and their influence on conversions. This allows the model to assign a data-driven weight to each touchpoint, which is used to calculate the proportional contribution of each channel.
• As new conversion data becomes available, the model continuously updates and refines its understanding of the conversion process, providing more accurate attribution over time.
• Data-driven attribution encompasses a wide range of interactions, including clicks and video engagements on Search (including Shopping), YouTube, Display, and Discovery ads in Google Ads.

Three Benefits of Moving to Data-Driven Attribution

• More accurate attribution: By considering the impact of each touchpoint, the Data-Driven Model provides a more comprehensive understanding of the marketing funnel and each channel’s effectiveness.
• Optimized marketing spends: With a better understanding of each channel’s performance, marketers can allocate budgets more efficiently and maximize return on investment (ROI).
• Improved campaign performance: By identifying the most effective touchpoints, marketers can focus on the strategies that drive conversions and improve overall campaign performance.
• Better personalization and targeting: Insights from Data-Driven Attribution can help marketers identify the best channels and messages to reach their audience, leading to more effective personalization and targeting.

Understanding Fractional Conversions in Data-Driven Attribution:

Data-Driven Attribution reports conversions as fractional numbers because it assigns credit for a conversion to multiple touchpoints in a user’s journey, rather than attributing the entire conversion to a single touchpoint. In other words, this model acknowledges that multiple marketing channels can influence a user’s decision to convert.

The fractional attribution helps provide a more accurate representation of each channel’s impact on the conversion. For instance, if a user interacted with four different marketing touchpoints before converting, the Data-Driven Model might assign 0.15 of the conversion credit to the first touchpoint, 0.30 to the second, 0.20 to the third, and 0.35 to the fourth, based on their effectiveness in driving the conversion.

Using fractions helps marketers better understand the relative importance of different channels, allowing them to make more informed decisions about where to allocate resources and optimize campaigns. This approach can ultimately lead to improved marketing performance and ROI.

Conclusion

In summary, the Data-Driven Attribution Model offers significant advantages over the traditional Last-Click Attribution Model. It provides a more accurate representation of the effectiveness of each marketing channel, allowing marketers to optimize their budgets, campaigns, and targeting strategies. By using fractional conversions, Data-Driven Attribution acknowledges the combined impact of multiple touchpoints, leading to better decision-making and ultimately, improved marketing performance and ROI. Adopting the Data-Driven Attribution Model can help businesses make more informed marketing decisions and stay competitive in the ever-evolving digital landscape.