Revenue attribution is the process of matching revenue from customers to a specific marketing output. Understanding revenue attribution helps prove your ROI, optimise campaigns, and allocate budgets with more confidence.
Revenue attribution has become a buzz term in marketing in recent years, with an increasing number of discussions around the topic.
This can only be a good thing, as marketers are being held increasingly accountable for the need to connect efforts with more than simple lead generation.
Instead, the attribution of revenue is paramount in a modern marketing strategy, with around 57% of marketing teams having some form of attribution tracking in place.
Whether you’re new to revenue attribution or would like a refresher on how to use it, this blog will cover the basics and help you get the most out of it.
For this article, we’ll discuss:
- What is revenue attribution
- Why revenue attribution more useful than conversion tracking
- The importance on revenue attribution
What is revenue attribution?
Revenue attribution, or marketing attribution, is a method which connects different data sets to determine exactly which forms of marketing are resulting in revenue downstream.
Marketing technology continues to innovate, mature, and advance with each passing year. As it does, there is an increasing demand for business executives to hold their marketing functions accountable where revenue is concerned.
Attribution ensures this is possible, and that there is a clear line between marketing efforts and revenue income.
Why is revenue attribution more useful than conversion tracking?
Conversion tracking provides a simple means of tracking the specific actions taken by people on a website. The most frequent use of conversion tracking is in form submissions, such as a subscription to an email list.
However, conversions can also be used to track other actions taken on a page, such as clicking a button, following a link, or the amount of time spent on a page. An action or goal is set, and when that criteria is met, it counts as a conversion.
Revenue attribution is a little different, as it tracks the specific marketing actions taking place, and the impact they have further down the marketing funnel. Ultimately, the point at which they generate revenue, and how much they create.
Attribution tracks more than a single action taken by a prospect. Instead, it keeps tabs on every engagement they make. It follows the customer journey from the first time they visit your website, to the point at which they purchase a product or service.
A proportionate amount of revenue is attributed to every marketing effort leading to those engagements, based on the marketing cause behind each prospect engagement.
What is a revenue attribution model?
While it’s important to be consistent in the manner of revenue attribution you use across your channels, there are several different forms, ranging from simple, single-factor to more advanced models.
The latter may incorporate highly complex logic and algorithms. Yet there are positives and negatives for each method, which is one reason attribution is currently one of the most highly debated marketing topics.
Single source attribution models
A single source model of attribution uses one touchpoint (usually either first or last) to assign credit. When first-touch attribution is used, all credit for revenue is assigned to the point of engagement from a lead.
Ruler Analytics source report – first click
For example, if they downloaded a free resource, like a cheat sheet, that would count as the first point of engagement, and revenue would be attributed to that point.
On the other hand, last-touch attribution does the opposite, attributing credit to the final point of engagement before revenue is generated.
Ruler Analytics source report – last click
In practice, that will likely be a final sales call or pitch. The problem with this method is that it fails to account for earlier interactions, such as social media views or website visits and consequently means you miss core insights into your other marketing channels.
Given that both first and last single point attribution models only allow for one channel to be considered, and modern digital marketing has a plethora of channels, the single-source method is widely viewed as inaccurate and somewhat archaic.
Multi-source attribution models
As the name suggests, multi-touch attribution (or MTA) models assign credit to multiple channels that contribute to the final conversion. Depending on which attribution model you choose, you can ensure key parts of your customer journey are accounted for and better understand the touchpoints occurring. Multi-attribution models include:
Linear attribution. Revenue from the conversion is distributed evenly across all of the touchpoints in the buyer’s journey.
Time decay attribution. Credit is distributed to all marketing touchpoints. But more credit is assigned to the most recent touchpoints, and is generally used for longer sales cycles, such as B2B.
U-shaped attribution. This model assigns credit to the first point of engagement, the creation of the lead, and everything in between. Credit is attributed by giving 40% to the first touch, 40% to the lead creation, and dividing the remaining 20% between the remaining touchpoints in between.
W-shaped attribution. Very similar to the U-shaped model, but with the inclusion of an additional point of contact – the creation of the opportunity. All three of the main touchpoints receive 30% of the credit, while the remaining points share the last 10%.
Full path attribution. This model offers an extension of W-shaped attribution by factoring in the final point of closure. While most of the credit is applied to the key milestones along the client journey, the touchpoints between are given a lower weight of credit. This model comes with the big benefit of accounting for the follow-up interactions carried out post-opportunity by your sales team and assigning them an equal weight of credit to early marketing activities.
Custom attribution. Finally, there is custom attribution, which gives you the chance to assign credit according to your own custom model. This is arguably more sophisticated than other models, as it enables your team to determine their own weighting percentages, using the specific marketing channels, industry, and typical client behaviour relevant to your business.
What’s the best revenue attribution model?
This is the big question all marketers are asking. Generally speaking, how successful an attribution model is will depend largely on the business to which it’s applied.
With tools like Ruler Analytics (and the ability to use trial and error), you can test and compare different models to find the one that will work best for your company.
Regardless of which touchpoint in the journey you assign the most credit to, consider that it is going to be continually supported and budgeted for, in order to maintain high performance.
This can cause upstream channels to suffer due to the (often inaccurate) perception that they aren’t effective.
Multi-channel methods of attribution enable you to see value over all your channels, which can ensure budgets are allocated more fairly.
The importance of revenue attribution
B2B companies have long since separated out marketing and sales activities, with the only goal of marketing being lead generation. Sales then step in to transform those leads into customers.
The problem with this is that optimising your marketing for a higher volume of leads results in lower quality, which works against the efforts of your sales team.
It’s important for both teams to work together, using the same goals and metrics, with revenue as the primary objective in order to optimise your whole process. When you do this, there’s no chance of under- or over-valuing any of your channels.
It’s important for both teams to work together (in a method coined as smarketing), using the same goals and metrics, with revenue as the primary objective in order to optimise your whole process. When you do this, there’s no chance of under or over-valuing any of your channels.
When considering solutions, you need to find the one that fits in best with your existing marketing stack, such as your CRM and automation platform.
For us, we use closed-loop marketing attribution. It allows us to track our visitor’s multiple touchpoints and align revenue from our CRM with marketing data so that you can attribute value accurately across the entire sales cycle.
Are you ready to get started with revenue attribution?
Marketers are being held increasingly accountable for the need to connect their efforts with revenue growth.
Simple lead generation is not enough.
With revenue attribution, you can better measure your offline and online marketing campaigns and allocate budget towards acquiring higher qualified leads.
Ready to try out a revenue attribution solution? Ruler Analytics can help to close the gap between your sales and marketing data so you can prove your ROI, optimise your campaigns, and budget, and see all your data where you need it most.