Optimize Marketing with Time Decay Attribution

What are marketing attribution models?

Marketing attribution models identify and assign credit to different touchpoints along the customer's journey contributing to a conversion or purchase. They help marketers understand which marketing efforts drive results and where to allocate funds for optimal return on investment (ROI).

You can use several types of marketing attribution modeling strategies. Each comes with its own approach to assigning credit:

• First touch attribution: This model attributes all weight for a conversion to the initial interaction or engagement a customer has with your brand. First touch attribution emphasizes the role of initial touchpoints in attracting customers to your offerings.
• Last touch attribution: Last touch attribution gives all credit to the final touchpoint or channel that directly precedes the conversion. It highlights the touchpoint that directly led to the purchase decision.
• Linear attribution: In the linear attribution model, a multi-touch attribution model, credit is evenly distributed across the multiple touchpoints a customer encounters throughout their journey. This equal credit attribution strategy acknowledges the contribution of each interaction equally, regardless of its position in the customer journey.
• Position-based attribution: The position-based attribution model assigns significant credit to both the first and last interactions, recognizing their roles in attracting and converting customers. The middle touchpoints get less credit.

Choosing the right marketing attribution model ensures the accurate measurement and optimization of marketing strategies. The selected model should align with your business goals, customer behavior patterns, and the complexity of your sales funnel.

For instance, if your marketing efforts are focused on generating awareness and attracting new leads, a first-touch model might be appropriate to understand which channels initiate customer interest. On the other hand, if your priority is to optimize conversion rates, a last-touch model can highlight the final touchpoints and most effective marketing channels that directly lead to sales.

What is time decay attribution?

Time decay attribution is an attribution model that assigns more weight or credit to marketing touchpoints that occur closer to the conversion point. It acknowledges that interactions or engagements that happen nearer to the point of conversion are often more influential in making customers take action.

This attribution model still considers each touchpoint along the customer journey. However, the credit assigned to each interaction decreases as you move further back in time from the conversion event. This gives the interactions closer to the conversion more weight because they have more of an impact on the customer's decision-making process.

For instance, let's say a user sees an ad on social media, then visits your website a few days later via an email link, and finally makes a purchase after clicking on a paid search ad. With a time decay attribution model, the paid search ad that led directly to the purchase receives the most credit, followed by the email link, and then the social media ad.

The rationale behind this approach is that the touchpoints that occurred closer to the purchase are likely more directly influential and indicative of customer intent.

Benefits of the time decay attribution model

The time decay attribution model offers several distinct advantages for marketers seeking to understand and optimize their campaigns. Because it reflects the recency of interactions in customer journeys, this model provides a more detailed view of how marketing efforts influence conversions over time.

Reflects recency of interactions

Assigning greater credit to touchpoints closer to the conversion event gives marketers valuable insights into which marketing efforts are most effective in driving immediate customer actions. This approach is particularly valuable in industries where customer decisions are influenced by timely and relevant messaging.

Improved understanding of customer journeys

A time decay attribution model enhances marketers' understanding of customer journeys. It allows them to track and analyze how customer interactions evolve from initial awareness to final conversion.

Capturing the impact of each touchpoint along the journey helps identify critical decision-making stages and optimize their strategies to better align with customer behavior.

Better budget allocation

Businesses must allocate their marketing strategy budget accordingly to contain costs and increase their ROI as much as possible. Attributing higher value to recent interactions means allocating resources more efficiently toward channels and campaigns that demonstrate an immediate impact on conversions. This ensures that marketing spend is directed toward initiatives most likely to yield positive returns within shorter timeframes.

Aligns with marketing campaigns

The time decay attribution model supports the alignment of marketing campaigns with customer behavior patterns. Focusing on recent interactions allows marketers to adjust messaging and tactics in real time to capitalize on current trends and consumer preferences.

Supports long sales cycles

The time decay attribution model is particularly beneficial for industries with longer sales cycles, such as B2B. It acknowledges that customer decisions may evolve over an extended period and attributes value to touchpoints that contribute to nurturing leads and maintaining engagement over time.

For instance, the customer journey might begin with awareness ads that attract initial interest, followed by multiple interactions during the consideration and engagement stages. Here, content marketing, personalized outreach, and customer self-service tools guide prospects through the decision-making process.

This interaction model provides a more comprehensive view, enabling marketers to build relationships and guide prospects through complex purchasing decisions.

Common challenges of the time decay model

No attribution model is perfect, and the time decay attribution model is no exception. It comes with several challenges that businesses will need to navigate to use it correctly and understand their data. These challenges include:

Data quality and completeness

Since this model heavily relies on accurate and comprehensive data about customer interactions across various touchpoints, any gaps or inaccuracies in data collection can skew attribution results. Marketers must invest in robust data collection methods and analytics tools to minimize errors and capture all relevant interactions.

Complex implementation

Implementing the time decay attribution model can be complex, especially for organizations that use lots of marketing channels and customer touchpoints. It requires setting up sophisticated tracking mechanisms and integrating data from multiple sources to trace customer journeys accurately.

The complexity increases when dealing with cross-device interactions or offline engagements, requiring advanced analytics capabilities and technical expertise.

Difficulty measuring long-term impact

While this model effectively attributes credit to recent interactions leading to conversions, it may overlook the cumulative influence of earlier touchpoints in shaping customer decisions over extended periods. Touchpoints with the least credit still have a major impact; without them, the customer may not have even known the company existed.

Marketers may need to complement this model with other attribution approaches or qualitative insights to gain a holistic view of campaign effectiveness across different touchpoints and timeframes.

Implementing time decay attribution

Implementing the time decay attribution model using analytics platforms like Google Analytics can give you insight into your marketing efforts, helping you understand the effectiveness of different touchpoints closer to conversion. Here are a few best practices to ensure accurate tracking and data collection:

• Ensure data consistency: Regularly audit your tracking setup in analytics tools to ensure consistency across all channels and devices. Verify that data from different sources, such as website visits, social media referrals, and email campaigns, are accurately attributed.
• Implement cross-device tracking: Use features like User ID in Google Analytics to track user interactions across multiple devices. This helps attribute conversions accurately, even if a customer switches between devices during their journey.
• Utilize UTM parameters: Use UTM parameters in your campaign URLs to track specific marketing initiatives. This allows you to segment traffic by source, medium, and campaign, providing insights into which channels contribute most effectively to conversions.
• Integrate offline and online interactions: If applicable, integrate offline interactions, such as store visits or phone inquiries, into your attribution model. Use tools like CRM integration to bridge the gap between online and offline touchpoints.

Analyzing marketing performance with time decay attribution

To analyze marketing performance with time decay attribution, you'll need to interpret data from reports to understand the impact of different touchpoints and channels on conversions. Here's how you can do that:

• Identify high-impact touchpoints: Review the time decay attribution reports in your analytics platform. These reports typically show how much credit each marketing touchpoint receives based on its proximity to the conversion event. Identify touchpoints that receive significant credit, especially those closer to the conversion.
• Segmentation and comparison: Segment your data by traffic source, campaign, device type, or user demographics. This segmentation helps you understand which segments are most responsive to your marketing efforts.
• Compare against other attribution models: Compare the results from the time decay model with other attribution models like first-touch, last-touch, or linear attribution. This comparison provides a broader perspective on how different models distribute credit across touchpoints and helps validate the effectiveness of your chosen attribution approach.

When identifying high-impact touchpoints using the time decay attribution model, there are a few things you'll need to keep in mind:

• Proximity to conversion: Focus on touchpoints closer to the conversion event in the customer journey. These could include interactions such as email opens, product views, add-to-carts, or specific pages visited shortly before conversion.
• Channel contribution: Identify which marketing channels contribute most effectively to conversions, considering their respective roles in the customer journey. For example, paid search ads might initiate customer interest (first touch), while remarketing campaigns or email newsletters closer to conversion (last touch or time decay).

Once you have all the data you need, you can use insights from time decay attribution reports to optimize your marketing strategy. Allocate more budget or resources to channels and touchpoints consistently showing high impact while refining or adjusting strategies for underperforming areas.

Enhance your marketing efforts with the right attribution model

Enhancing your marketing efforts with the right attribution model, like time decay, can significantly boost your ROI by accurately crediting touchpoints that drive conversions. By prioritizing recent interactions, this model can help you determine which marketing campaigns and channels are most effective in influencing customer decisions. This understanding allows you to optimize budget allocation, refine messaging strategies, and adapt campaigns in real time to capitalize on customer behavior trends.

Mailchimp provides robust analytics capabilities and tags to help track and analyze customer journeys across various touchpoints, from social media engagements to website interactions and beyond. This holistic view enables marketers to make informed decisions, optimize their marketing mix, and maximize the impact of their campaigns. Sign up for Mailchimp today.