Last Touch Attribution: E-Commerce Explained

Understanding Last Touch Attribution

What is Last Touch Attribution?

Last touch attribution is a marketing model that attributes conversion credit to the final touchpoint a customer has before making a purchase. In an e-commerce context, this often means that the last click a customer makes before purchasing is credited with the sale.

For example, if a customer sees an ad on Facebook, clicks through to your website, browses for a while, leaves, and then comes back a few days later and makes a purchase after clicking on a Google ad, the Google ad would get credit for the sale under a last touch attribution model.

The Importance of Attribution Models in E-Commerce

Attribution models are a crucial tool for understanding which marketing channels and touchpoints are driving sales. Without an attribution model, it's challenging to know which marketing efforts are paying off and which are falling flat.

There are several different attribution models that e-commerce businesses can use, including first touch attribution, linear attribution, and time decay attribution. Each model has its strengths and weaknesses, and the model that's right for your business will depend on your goals and the specifics of your customer journey.

E-commerce businesses rely on attribution models to improve their understanding of the customer journey and optimize their marketing mix for maximum impact. By tracking and analyzing data from each touchpoint, e-commerce businesses can fine-tune their marketing efforts and allocate resources more effectively.

Pros and Cons of Last Touch Attribution

Like any attribution model, last touch attribution has its pros and cons. Here are a few of the most significant advantages and disadvantages:

• Advantages:
• Simple to implement: Last touch attribution is easy to set up and track, making it a popular choice for businesses of all sizes.
• Clear and easy to understand: Because last touch attribution only looks at the final touchpoint, it's easy to understand which channels and touchpoints are driving sales.
• Focuses on the most recent touchpoint, which may be the most impactful: The last touchpoint a customer has before purchasing may be the most memorable or influential, making it an important touchpoint to track.
• Disadvantages:
• Does not account for the entire customer journey: Last touch attribution only looks at the final touchpoint, which means that it doesn't take into account all of the touchpoints that led up to the sale.
• May not be representative of the customer's intent or motivation to purchase: Just because a customer clicked on an ad or visited a website last doesn't necessarily mean that that touchpoint was the most important or influential in their decision to purchase.
• May overemphasize the importance of certain channels or touchpoints: Last touch attribution may give too much credit to certain channels or touchpoints, while undervaluing others that played a more significant role in the customer's decision to purchase.

Overall, last touch attribution can be a useful tool for e-commerce businesses looking to understand which touchpoints are driving sales. However, it's important to keep in mind its limitations and to consider using other attribution models in conjunction with last touch attribution to get a more complete picture of the customer journey.

How Last Touch Attribution Works

Identifying the Last Touchpoint

The first step in implementing last touch attribution is identifying the final touchpoint a customer has before making a purchase. This may involve tracking clicks, views, or other interactions with your website or marketing channels.

There are numerous ways to track and attribute conversions, depending on your marketing stack and platform. Google Analytics and other marketing analytics tools often include built-in attribution reporting that can help you identify the last touchpoint.

Tracking and Analyzing Customer Journey Data

To fully understand the impact of last touch attribution, it's necessary to track and analyze data throughout the entire customer journey. This may involve using analytics tools, CRM software, or other data management systems to collect and analyze data at each touchpoint.

By analyzing data from the customer journey, e-commerce businesses can gain insights into which channels and touchpoints are most effective at each stage of the funnel. This data can inform marketing strategies, product development, and other areas of the business.

Implementing Last Touch Attribution in Your E-Commerce Strategy

When implementing last touch attribution in your e-commerce strategy, it's essential to ensure that your tracking and data collection methods are accurate and comprehensive. You may need to work with developers, data analysts, or marketing experts to ensure that your attribution model is set up correctly and optimized for your business needs.

It's also important to remember that last touch attribution is just one of many attribution models that may be appropriate for your business. Depending on your marketing mix and goals, you may need to use other models, such as first touch attribution or linear attribution, to gain a complete understanding of the customer journey and optimize your marketing efforts.

Comparing Last Touch Attribution to Other Models

First Touch Attribution

First touch attribution is an attribution model that gives credit to the first touchpoint a customer has with your brand or product. This model is often used for brand awareness campaigns or top-of-funnel marketing efforts.

First touch attribution can be beneficial for understanding which channels and touchpoints are most effective at introducing new customers to your brand. However, it does not account for the entire customer journey and may not accurately represent the impact of other touchpoints.

Linear Attribution

Linear attribution is an attribution model that evenly distributes credit across all touchpoints a customer has with your brand or product. This model is useful for understanding the overall impact of your marketing efforts and can help identify which touchpoints are most critical throughout the customer journey.

However, linear attribution may not accurately represent the impact of individual touchpoints, and it can be challenging to track and manage data for this model.

Time Decay Attribution

Time decay attribution is an attribution model that gives more credit to touchpoints that occur closer to the time of purchase. This model is helpful for understanding which touchpoints are most impactful in the later stages of the funnel.

Time decay attribution can be useful for e-commerce businesses that rely heavily on retargeting or other remarketing efforts to drive sales. However, it may not accurately represent the impact of touchpoints earlier in the customer journey.

Position-Based Attribution

Position-based attribution is an attribution model that gives more credit to touchpoints that occur at the beginning and end of the customer journey. This model is helpful for understanding which touchpoints are most impactful for introducing customers to your brand and closing sales.

However, position-based attribution may overemphasize the importance of certain channels or touchpoints, and it may not accurately represent the impact of touchpoints in the middle of the funnel.

Improving Your E-Commerce Attribution Strategy

Combining Attribution Models for Better Insights

One useful approach for improving your e-commerce attribution strategy is to combine multiple attribution models to gain a more comprehensive understanding of the customer journey. By using multiple models, you can identify trends and patterns that may not be apparent with a single model.

Leveraging Multi-Touch Attribution

Multi-touch attribution is an attribution model that gives credit to multiple touchpoints along the customer journey. This model is useful for e-commerce businesses that want to understand the impact of each touchpoint and adjust their marketing mix accordingly.

Using multi-touch attribution can be challenging, as it requires more sophisticated data tracking and analysis methods. However, it can provide a more complete picture of the customer journey and help identify areas for improvement.

Utilizing Advanced Analytics Tools

To improve your e-commerce attribution strategy, it's essential to have a robust analytics stack that can help you track and analyze data effectively. There are numerous analytics tools available, from Google Analytics to advanced marketing automation platforms, that can help you gain insights into the customer journey and optimize your marketing efforts.

By investing in these tools and working with data analytics experts, e-commerce businesses can improve their attribution strategies and drive more sales through targeted and effective marketing.