Attribution models are key tools in marketing for understanding how individual channels and interactions affect the overall success of marketing campaigns. In digital marketing, a customer doesn't have to go directly to a purchase and make it right away. They may visit your website several times before a conversion occurs. For this reason, we use attribution models as marketing tools to help us determine among which touchpoints the conversion value for a sale will be distributed.

Types of attribution models:

There are several types of attribution models, each of which divides the conversion value in different ways. The most well-known models include:

1. First Interaction

In the first interaction model, the first point of contact through which the user came in contact with the campaign gets all the value, that is, 100% of the credit.

2. Last interaction

This model attributes all credit to the last point of contact. Although this is a simple and widespread model, it also has its drawbacks. It ignores all previous interactions that may have had a much greater influence on the user's decision.

3. Last indirect click

Here, the last channel from which the customer visited the site before making the conversion receives 100% of the credit.

4. Linear

The linear model evenly distributes the credit for a conversion among all the contact points the user came into contact with. The advantage is that each contact point receives an equal share of the credit, but the disadvantage is that we don't know which point had the biggest impact on the conversion.

5. Increase over time

This model assigns more credit to the contact points that are closest in time to the conversion. Thus, the closer the interaction is to the conversion, the more weight this model gives it.  

6. Based on the position

The Attributional Position Based Model, is often referred to as the U-shaped model. Credit is divided between the first and last contact point leading to conversion, with 40% of the credit attributed to the first contact, another 40% to the last contact, and the remaining 20% divided between the remaining points.

Advantages of attribution models

1. Budget optimization: they allow you to better allocate budget to the best-performing touchpoints, increasing ROI.
2. More accurate measurement: you'll always have a comprehensive view of the individual touchpoints that contributed to conversions.
3. Better customer understanding: by tracking what touchpoints and channels brought customers to your site, you can understand how they think and optimize their customer journey.
4. Improve campaign performance: Using attribution models, you can identify the effectiveness of channels at different stages of the buying process, allowing you to better target your audience.

Conclusion

In conclusion, attribution models hold a vital role in modern marketing. They allow marketers to track and understand customer journeys and manage budgets effectively. With the right model in place, companies have a powerful tool in their hands to evaluate the success of their campaigns and optimize their marketing strategies.