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5 Reasons Why Ad Attribution is Essential for Marketers

Regan Hestand
May 30, 2023

Ad Attribution is Essential for Marketers to Estimate Success

If you have experience running ads, you know marketing attribution is essential. But if you're new to running ads, it may be hard to understand why it matters.

In this blog post, we'll explore marketing attribution in detail. We'll define ad attribution, its purpose in marketing attribution, different types of attribution models, and how they affect your budget. Lastly, we'll provide five reasons why ad attribution is vital for successful marketing performance.

What is Ad Attribution?

First, let's get into the technical definition of attribution to help you understand how it works and relates to marketing tactics.

Attribution, under Webster's dictionary, is defined as:

"1. the act of attributing something. Especially: the ascribing of a work (as of literature or art) to a particular author or artist. 2. an ascribed quality, character, or right. 3. psychology: the interpretive process by which people make judgments about the causes of their own behavior and the behavior of others".

By adding the term "ad" or "marketing" to attribution, we are gathering all of the components of the marketing campaign that are credited to the user's action and purchase. In short, It's like capturing a snapshot of every element of consumer behavior that contributes to the ad's success. 

What's the difference between marketing attribution and ad attribution?

Marketing Attribution is a tool that allows you to view the customer journey and help you determine the most valuable marketing touchpoints.

Ad attribution falls into your marketing attribution model and specifically allows you to measure performance across each touchpoint of your digital campaigns — from the first click to the final conversion.

How does Ad Attribution work?

Ad attribution works by tracking the entire customer journey. This is through user activity before, during, and after ad campaigns. When a customer clicks on an ad or visits your website from a link in your ad, the ad attribution platform records that information. This data is then used to assign credit to each ad campaign's performance. Accurate attribution helps you understand how your ad campaigns are performing.

You can also use ad attribution to assign credit to various creative variations, such as different ad images, ad copy, and landing pages. By tracking which ad variation is performing the best and giving credit to each, you can accurately track the performance of different ad elements within each campaign.

Why is Ad Attribution Important?

Marketing teams need to know all digital touchpoints, campaigns, ads, and creative variations that have influenced someone to convert. If you're not collecting those data points, there's no way to know if your marketing efforts are working. You're just taking a shot in the dark.

I will give a quick example to understand how you would measure ad attribution in a business setting. A company runs a Facebook ad campaign promoting a new product. We want to determine if the ad led to sales on their Shopify store. To measure this, they'll use digital marketing attribution.

The company sets up a tracking Pixel on its website, which allows them to track user activity after clicking on the ad. If someone clicks on the ad and purchases on the website within a specific time frame, the pixel can attribute that sale to the ad.

The example company can also set up UTM parameters for more multi-touch attribution in all their marketing links. UTM parameters will help them track which ads or marketing channels drive the most traffic and conversions. The multi-touch model helps them better grasp the buyer's journey if there are multiple touchpoints.

By using a marketing attribution strategy to optimize their campaigns, they can create better re-targeting groups and focus on the ads that are generating the most revenue. In conclusion, having a better idea of how sales are being attributed helps them save money by allowing them to turn off any ads that aren't having their desired effect.

An important note is that while social media platforms like Facebook provide in-platform tools for measuring ad attribution, the data may only sometimes be reliable. Investing in a trustworthy third-party ad attribution platform is well worth it to make the correct conclusions.

What is the Most Common Way to Measure Marketing Attribution?

Attribution models, also known as measurement models, are ways to identify the value of marketing channels. Answering the most common measurement method is tricky because marketers will use a different marketing attribution model based on what they're trying to measure. 

Types of Attribution Models 

There are many types of marketing attribution models that ad platforms use to measure success, each with its benefits and drawbacks.

The Most Popular Marketing Attribution Models

Knowing the popular marketing attribution models can help marketers make smarter decisions about their campaigns and optimize marketing spend.

First-touch Attribution model

First-touch attribution measures the success of a marketing campaign by counting the number of people who first interacted with the brand during or after it. Drawbacks from this leave out 

Last-touch Attribution

The last touch attribution model assigns credit for conversions to the ad channel the user interacted with immediately before a conversion occurred. The last touch model is arguably the most popular attribution model because it is easy to understand, implement, and familiar. 

It assigns 100% of the credit for a conversion to the last marketing touchpoint the customer interacted with before converting. This simplicity makes it attractive to marketers who want to measure marketing effectiveness straightforwardly. 

Multi-touch attribution

Multi-touch attribution is an advanced model that allows marketers to assign various credit levels to each interactive touch point in the sale process.

Other Attribution Models

There are many ways to measure success by attributing specific metrics of your customer touchpoints. Here are a few more different models to explore.

Time Decay Attribution Model

The time decay model assigns more credit for conversions to ad channels closer to the conversion event and less credit to ad channels further in the funnel. 

Position-Based Attribution Model

The position-based ad attribution model assigns 40% of the credit for conversions to the ad channel that first made a user aware of your

Linear Attribution Model

The linear attribution model assigns equal credit for conversions to all ad channels involved in the customer journey. This type of ad attribution can be popular because it fairly distributes credit across all touchpoints in the customer journey, acknowledging the contribution of each marketing channel.

By understanding these attribution models, you can choose the suitable one for your marketing funnel. Therefore marketers can maximize their ad spend, optimize campaigns more effectively, and make informed decisions about their strategies going forward.

Benefits of Ad Attribution

Ad attribution gives companies the information they need to make savvy decisions about their digital marketing efforts. By tracking conversion attribution and multi-touch attribution, organizations can determine which of their advertising approaches are working best and deduce trends in protocol changes over time. 

Knowing which ads drive conversions greatly benefits firms trying to fine-tune their campaigns and maximize their ROAS(return on ad spend). Ad attribution lets business owners be highly confident about each budget spending.

Challenges with Ad Attribution

For digital advertisers, gathering accurate data about their campaigns is essential for optimizing performance. However, the task has become increasingly challenging due to the complex nature of ad attribution and the changes from lawmakers in privacy laws. Many social media platforms use first-party measurement tools for reporting clicks which is often inaccurate and outdated.

Moreover, native platform analytics can have unreliable data because it does not consider more intricate details, ex: Facebook charging for views instead of clicks per ad. In light of these issues, marketers must look towards third-party solutions to accurately measure their ads' impact and maximize return on investment (ROI) across multiple channels.

It's one thing to track marketing attribution. It's another to make sure what you're tracking is actually accurate. Read more about choosing the right ad attribution and ad tracking for your business.

Five Reasons Ad Attribution is Essential

Ad attribution can be overwhelming, so it's essential to know why attributing ads is crucial for your business.

#1 Allows for Accurate ROI Calculation

ROI stands for return on investment, arguably the most critical aspect of a business's marketing tactics. Ad attribution helps you track and measure the success of your campaigns. If you're focusing on social media marketing campaigns, you need ad attribution to track and measure how people interact with your ads. You can determine exactly which digital campaigns are achieving the best results.

Ad attribution helps unlock more profound insights into marketing ROI, so you can continue to refine your strategies for maximum return. It doesn't have to be complicated - just simple, informed steps toward getting the most out of your marketing budget.

#2 Helps Identify Effective Marketing Channels

Ad attribution gives insight into which channels bring in the most conversions. With data from marketing attribution, you can craft more effective campaigns by targeting the channels that generate the most conversions and eliminating those that don't move the needle. This valuable data will help your business increase sales, save money on ineffective promotions, and stay one step ahead of your competition.

# 3 Gives You The Ability to Make Informed Decisions

With ad attribution data, you can make more informed decisions about where to allocate resources and budget.

Making decisions on where and how to allocate resources and budget is no easy feat - the success or failure of your marketing campaigns and initiatives can often rest on a single decision. Thankfully, modern ad attribution data gives marketers the edge needed to craft strategic choices that are more informed than ever before.

This data lets you gain powerful insights into ads' performance, including web visits, customer acquisition costs, and total attributed sales. This valuable information is essential for maximizing your resources and budget, whether big or small. Ultimately, utilizing this data puts you in the best position to achieve successful outcomes from your marketing efforts.

# 4 Helps You Optimize Your Campaigns

Marketing attribution makes it easier to optimize each campaign by understanding which parts work best and what needs improvement.

Ad attribution can be a key player in boosting your campaign optimization efforts. By understanding which elements of your campaigns are performing the best and which need further improvement, you can make adjustments quickly and confidently, allowing for higher overall success.

Optimizing campaigns using ad attribution data also means that you can focus on honing strategies to maximize the ROI of each one, meaning that each campaign works harder - making more of an impact with less effort. And due to its nature as a holistic approach to optimizing your campaigns, ad attribution is a great option for streamlining just about any process related to running marketing activities.

#5 Allows You to Create Better Customer Experiences

Ad attribution helps you create a better customer experience by aligning marketing messages that resonate with customers across multiple channels.

Ad attribution is an invaluable tool to improve customer experience. By analyzing a customer's interactions with ads across multiple channels, you can identify the messages that best resonate with them and optimize your marketing strategy to keep them engaged.

Moreover, this data can provide essential insights into a customer's preferences and behaviors, enabling you to craft experiences tailored to their needs – such as personalized product recommendations. 

In sum, ad attribution allows you to build customer trust by delivering on their expectations, creating meaningful relationships, and driving better rewards for everyone.

Marketing Attribution is Essential Conclusion

Ad attribution can give you a significant edge in your marketing efforts and allow you to measure the success of each campaign with greater accuracy. By understanding which channels drive the most sales, you can strategically decide which campaigns need more investment, allowing for better customer experiences.

With Sirge, you can quickly achieve better ROI from your marketing budget and optimize each marketing channel for maximum effectiveness. When understanding how customers interact with different content, Sirge offers marketers the intelligence and flexibility to make decisions that drive sales and foster customer loyalty confidently.

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