Omnichannel vs. Multi-Channel Attribution: Which Is Better?
Who made the sale? And what made customers buy? Businesses typically use one of two different models—omnichannel attribution and multi-channel attribution—to answer these questions. What’s the difference? Multi-channel attribution focuses on which channel was most effective, or which touches were most effective within each channel. In contrast, omnichannel attribution—which builds more sophisticated models analyzing all touchpoints, on all channels, to understand how much each touch contributed to sales—is an increasingly important way to understand the answers to these important questions.
Omnichannel attribution usually yields better results, but used to be quite difficult to achieve, especially before the advent of more powerful marketing technology such as customer data platforms (CDPs). Unfortunately, many marketers are still stuck using outdated martech that doesn’t allow them to unify their data at a large scale, which means they’ve been stuck with simpler multi-channel models.
That’s because digital channels have quickly become the primary source of communication, news, and consumption, but they’re usually poorly integrated with all of the other channels and touchpoints that influence customers: events, non-digital ads, in-store experiences, and more Plus, the success of modern brands depends on their ability to translate data from all channels into real-life experiences, and vice versa. Your digital channels must be quantified, analyzed, and optimized to reach your future business goals.
Still, only accounting for your consumers’ digital behavior leaves out a significant piece of the puzzle. Multi-channel marketing attribution and omnichannel attribution each serve their own purpose, but we believe omnichannel attribution is the way to go. Here’s why.
What is Multi-Channel Attribution?
Multi-channel attribution is the process of determining which digital marketing channel “gets the credit” for converting customers. It awards each online channel credit for sales based on its role in the customer journey leading up to the point of purchase. Sometimes, it analyzes a number of touches within a single channel.
Although widely used across industries, multi-channel attribution has its limitations, including the potential for duplicate reporting, presenting the wrong content or experience to prospects, misspent resources for touchpoints/content/experiences that don’t pay off as well as expected, and a lack of insight into what’s actually driving revenue. Other pitfalls and less-than-best practices associated with multi-channel attribution include overreliance on last-click and first-click attribution (because these are the easiest models when you don’t have omnichannel information), as well as irrelevant retargeting.
Different Models of Multi-Channel Attribution
The following are a few multi-channel attribution models, and some of the problems that can arise if you rely too heavily on these overly simplistic techniques.
Last-Click vs. First-Click Attribution
Last-click attribution looks at the last action taken by a customer before they make a purchase. First-click attribution, on the other hand, examines the first action they took. Here’s an example:
The customer just heard about a new clothing brand from a friend. She searches for the brand on Google, clicks the first result that pops up, and peruses the company’s site a little. Then, she closes out of the window, sets down her phone, and goes about her day.
A few hours later, she picks up her phone again and opens up Instagram. After scrolling through her feed for a couple of minutes, she’s presented with an ad from the clothing company she looked up earlier. She thinks, “I love their selection,” and decides to make a purchase. She clicks the Instagram ad, which takes her back to the company website where she fills her cart, enters her information, and hits “confirm.”
Last-click attribution would attribute 100% of the credit for this sale to the Instagram ad the customer clicked at the end of her customer journey. First-click attribution would attribute the credit to the organic search results. The problem with each of these attribution tactics is that they fail to account for the full picture—i.e., the full customer journey. The path to purchase included multiple touchpoints, so it’s important that marketers account for every step each customer took before they measure attribution.
Mere Multi-channel Attribution Can Lead to Irrelevant Retargeting
Failure to understand the customer journey in its entirety can lead to failed targeting or retargeting efforts—which can ultimately diminish trust and impede a customer’s decision to make a repeat purchase. Consider the example above. After hitting ‘confirm’ to purchase the items in your cart, the customer’s journey continues:
The customer closes out of the retailer window and opens up her email inbox in search of an automated order confirmation message. Then, she goes to Facebook to check her recent notifications and scans the day’s headlines and popular Buzzfeed quizzes.
Within just a few minutes of scrolling through her news feed, she’s presented with an ad carousel from the retailer she just bought from. All the items she just bought are featured: the gold necklace she couldn’t resist, the jeans she hopes fit just right, and the flannel shirt she knows her partner will love for Christmas. How frustrating!
Seeing an ad for items they already purchased can make customers feel annoyed or even misunderstood. Plus, they account for wasted ad spend. Marketers’ failure to understand a customer’s full path to purchase—from the first click to the last click and beyond—often results in a misstep just like this. Luckily, an omnichannel attribution model can fill in where multi-channel attribution falls short.
What is Omnichannel Attribution?
Although multi-channel marketing attribution is simple to implement if data unification is a problem, omnichannel attribution is a more accurate strategic approach to analyzing customer behavior and driving them toward conversion. Omnichannel attribution looks at all touches on all marketing channels—including online, offline, paid, owned, and earned. Plus, you evaluate and attribute each part of customer journeys using data from all channels simultaneously. This model can then be used with such techniques as regression to understand which touches accounted for most of the decision to purchase. The only reason that omnichannel models have been less frequently used in the past is that they require data unification at large scale—usually with a CDP—so that all of these actions, including the order in which they happened, can be analyzed and associated with each individual customer.
Omnichannel attribution is better than multichannel attribution because it better analyzes customer journeys that span a variety of types of interactions, Today’s customers encounter a variety of touchpoints before making a purchase, and omnichannel attribution accounts for them all. The modeling technique can also be used with next-best-action technology to boost sales and other marketing results. Here are some of its benefits:
- Deduplication—This crucial process ensures you aren’t counting one customer’s actions across channels and devices as multiple customers’ actions.
- Smarter Retargeting & More Relevant Follow-Up—Using omnichannel attribution to understand each step of the customer journey helps you improve your retargeting and follow-up efforts. Instead of promoting an item your customer already purchased, what if you could recommend a similar item they might like, or a coupon for a repeat purchase?
- Accurate Reporting on What’s Driving Revenue—Understanding a customer’s first or last action is important, but it’s just one part of the equation. Omnichannel attribution accounts for all marketing and sales efforts, delivering more accurate insights to help you understand where revenue is coming from, so you can pivot your strategy accordingly.
- Better Understanding of How to Rework Customer Journeys—Once you understand why customers buy, or why they leave, you can prioritize your resources to revamp the experiences and touchpoints that seem to matter most.
- Better Understanding of All Contributors to the Sales Process, and More Effective Resource Allocation—Using a naive model doesn’t give proper credit to all of the contributors to sales. If you award credit only to the last touch, it might look like your sales staff is brilliant—and they all get rewarded—but if it’s really your events-marketing or content-marketing staff that gets them through the door, you’re likely to pay big sales bonuses and neglect the resources to keep other teams going.
How to Get Started with Omnichannel Attribution
Unfortunately, many marketers today still rely on siloed marketing measurements that only provide insights into specific channels. Omnichannel attribution provides a more holistic view of the customer experience—one that allows marketers to deliver personalized customer experiences across a complex marketing mix to increase conversions and drive revenue.
- Audit Your Data Streams—First things first: identify the customer information you’re collecting, where you’re collecting it from, and where there are gaps in your process.
- Unify Data into Complete, Accurate Customer Profiles—A reliable customer data platform (CDP) can collect, consolidate, and analyze various customer information all in one place, so you can easily access the information and use it to make data-driven decisions moving forward.
- Encourage Communication Across Teams—Although marketing and sales departments have historically operated separately, omnichannel attribution requires everybody to join forces and share information about which channels customers engage with and which channels lead most often to conversions.
Treasure Data CDP is built to unify the customer journey across all channels and provide you with an omnichannel view of your customers. It helps analyze every interaction made between a customer and your brand along the customer journey to purchase, delivering a unified view of your customer so you can learn how to further personalize their omnichannel experience. To learn more about how to overcome attribution challenges, to access omnichannel analytics and understand the true value of your campaign investments, read our post on Multi-Touch Attribution or download our MTA Guide. Learn how Treasure Data uses the Shapley Value Attribution Model.