Why you might be thinking about attribution all wrong!

Hi Founder

Attribution is one of the most complex challenges in eCommerce marketing. As founders, you're constantly bombarded with data points from various platforms, each claiming to have driven your sales.

But relying solely on last-click attribution (generally what your Shopify dashboard will show you) or a biased (IMHO) platform like Google Analytics can create a misleading picture of your marketing efforts—and it could be holding your growth back.

Let me walk you through two scenarios that illustrate why a last-click or platform-data only approach is often too simplistic:

Scenario 1: The Organic Obsession

A potential customer encounters your brand for the first time through a Facebook ad. They click the ad but don’t make a purchase. However, the ad leaves a lasting impression, and the next day, they can’t stop thinking about your product. They search for your brand on Google, find your website through an organic result, and finally make a purchase.

So, which channel is responsible for the sale? Was it the Facebook ad that planted the seed, or was it the organic search that closed the deal? Last-click attribution would give all the credit to organic search, ignoring the crucial role Meta played in sparking the customer’s interest.

Scenario 2: The Long Winding Path to Conversion

Another potential customer spots your brand through a Facebook ad—their first exposure to your products. Intrigued, they click on your social media profile and decide to follow you. Over the next few weeks, they engage with your content and gradually build a connection with your brand.

Three weeks later, they see an organic post that resonates with them and like it. This action triggers a retargeting campaign, which nudges them to add a product to their cart. Still not ready to buy, they abandon the cart, but the next day, they receive an abandoned cart email. This time, they’re convinced, and they finally make the purchase.

Here, multiple touchpoints contributed to the sale: Facebook ads, organic social media, retargeting, and email marketing. Which one deserves the credit? A last-click attribution model would likely attribute the sale to the abandoned cart email, overlooking the crucial role played by every other channel along the way. Both Meta and Klaviyo would also try to claim the sale!

Why You Need a Holistic Attribution Model

The truth is, there’s no silver bullet when it comes to attribution. Modern customer journeys are complex and often involve multiple touchpoints across various channels. By relying on a last-click attribution model, or just looking at your Meta or Google dashboard, you risk oversimplifying this journey and undervaluing or over-valuing key interactions that contribute to your conversions.

Instead, you need an attribution tool or model that takes into account the nuanced and multi-layered nature of today’s customer behavior. These tools can help you identify the real drivers of your sales and optimize your marketing efforts accordingly. Whether it’s data-driven attribution, linear attribution, or position-based models, the goal is to get a clearer picture of what’s really working in your marketing mix.

Why Smaller Brands Should Consider Tracking MER or Blended ROAS

For smaller eCommerce brands, diving deep into multi-touch attribution models can be overwhelming and resource-intensive. This is where MER (Marketing Efficiency Ratio) or blended ROAS (Return on Ad Spend) comes into play.

MER (Marketing Efficiency Ratio): MER is a metric that compares your total revenue to your total marketing spend. It gives you a broad view of how efficiently your marketing dollars are driving revenue. If your total revenue is $100,000 and your total marketing spend is $20,000, your MER would be 5:1. This means that for every dollar you spend on marketing, you're generating $5 in revenue.

Blended ROAS: Blended ROAS is similar to MER but focuses specifically on the return from your paid advertising efforts. It’s calculated by dividing your total revenue by your total ad spend across all channels. For example, if you spend $10,000 on ads and generate $50,000 in revenue, your blended ROAS is 5:1. Blended ROAS helps you understand the overall effectiveness of your ad campaigns without getting lost in channel-specific data.

For many early-stage brands, these metrics offer a simplified yet effective way to measure the success of your marketing efforts. They provide a high-level view that helps you focus on scaling your brand without getting bogged down by the complexities of multi-touch attribution.

Top 5 Attribution Tools for eCommerce Brands

As your brand grows, you might want to explore more sophisticated attribution tools that can provide deeper insights into your marketing performance. Here’s a quick roundup of five top attribution tools used by eCommerce brands:

1. Ad Beacon
   Ad Beacon offers detailed multi-touch attribution and advanced analytics, helping you understand the entire customer journey across various channels. It’s particularly strong in providing visibility into Facebook and Google Ads performance.

2. Northbeam
   Northbeam is known for its powerful machine learning algorithms that deliver highly accurate attribution insights. It’s designed to help you make data-driven decisions by offering clear insights into which channels and campaigns are driving conversions.

3. Triple Whale
   Triple Whale is popular among DTC brands for its user-friendly interface and real-time data tracking. It provides an all-in-one platform that integrates attribution, analytics, and financial data, making it easier for you to track and optimize your campaigns.

4. Hyros
   Hyros focuses on giving you precise attribution by tracking customer actions across multiple platforms, including email and paid ads. Its AI-driven analytics help you maximize your ROI by accurately identifying the most effective touchpoints in the customer journey.

5. Wicked Reports
   Wicked Reports specializes in long-term customer behavior tracking, helping you understand the lifetime value of your customers and how different channels contribute to it. It’s especially useful for brands with a strong focus on email marketing and repeat purchases.

Each of these tools brings its own strengths to the table, and the right one for your brand will depend on your specific needs and the complexity of your marketing efforts. As you scale, integrating one of these tools can provide the insights you need to make more informed decisions and drive sustainable growth.

Attribution is crucial, but it doesn't have to be complicated. As your brand scales, you can always layer in more sophisticated models. But in the early stages, sometimes simplicity is the key to driving growth.

Cheers,

Jessie