In this article I'm going to talk about some important concepts to know when you are planning your digital marketing campaign: Customer Journeys, Marketing Funnels and Attribution. Most people planning digital campaigns are at least somewhat familiar with most of the terms here. Despite that, most digital marketers STILL fall into some of the common pitfalls that come up when you don't truly internalise these concepts and act accordingly.
A wise man in a pub once told me that knowledge is being aware of the facts, but wisdom only comes when you internalise and live by that knowledge. And so, most marketers have knowledge of the concepts I am about to explain but they don't have the wisdom to change their act accordingly. In this article I am going to take you past knowledge, into the realm of wisdom, and show you exactly how you should think and act differently once you are aware of the relevant facts.
What is a Customer Journey?
A customer journey, as it relates to your digital marketing, is every step a customer takes online before completing a purchase on your site. It's handy to view typical customer journeys as a diagram showing all the touchpoints, where each touchpoint is one of the various interactions they had with your business and/or your digital marketing.
The reason I want to clearly define for you what a customer journey is is because there is a key concept you need to keep in your mind when you are planning your digital marketing campaign. This is a fundamental concept that is seemingly often forgotten or not thought about when businesses are plotting their digital marketing world domination. The concept is this: a typical online customer journey is NOT as simple as "see, click, buy".
“A typical online customer journey is NOT as simple as ‘see, click, buy’”
To illustrate this for you, when planning their digital marketing spend here's how most people think a typical customer journey might look:
Pretty straightforward, right? This diagram is using Google Paid Search as the only touchpoint but you could substitute any other kind of touchpoint and that's how most marketers end up thinking their customers find their products. It could be "sees email, clicks email, buys stuff" or "sees banner ad, clicks banner ad, buys stuff". Those are all versions of the same type of customer journey, the "one click then buy" journey.
While this model of online consumer behaviour is attractive in its simplicity, it has one tiny little, minuscule flaw that should probably be mentioned: it's (almost) always completely wrong! A typical customer journey is complex, involving many touchpoints and the bigger your business is and the more expensive your products are, the more touchpoints are usually involved. If we zoom out on the above customer journey diagram and look at how that customer journey actually happened we might see it looked a little bit more like this:
This is an important concept to master because if you only think of the digital marketing channels at the very end of the customer journey, you will consistently undervalue the channels at the start of the journey.
What is a Marketing Funnel?
When it comes to marketing funnels there are lots of different acronyms and buzzwords to describe what is essentially the same concept. The one I like to use is AIDA: Awareness > Interest > Decision > Action.
At the top of the funnel you have the Awareness stage. This is the stage where your prospect first becomes aware of their problem. Of the people who are aware of their problem, a certain percentage of them will develop an Interest in getting a solution. Eventually some of these people will move into the Decision phase, where they are actively deciding which solution to use. Finally, at the Action phase, they act on all of this by buying a solution.
This concept is relevant to you when planning your digital marketing campaign because you need to cater to users at every stage of the funnel. Different PPC channels fit in at different stages of the funnel. For example, Facebook Ads are a great way to drive awareness. Facebook Ads is a "push" advertising channel, meaning you can push ads to people who had never previously thought of your company or type of product.
Once a person is aware of your product, paid search ads are great for the Interest and Decision phases of their journey. Once they become interested in a solution, they will likely be searching on Google for it. And when they want to decide which specific solution they want to go for they will be, you guessed it, searching on Google again.
The final hurdle is getting them to act. This is where retargeting, both on Google Adwords and Facebook Ads, shines. At this point they may have visited your site multiple times, giving you the opportunity to retarget them with ads for the exact product they were interested in. A solid discount or offer in your retargeting creative is often all that's needed to push them over the edge and finally buy from you.
The pitfall that a lot of marketers fall in to here is only thinking of the bottom of the funnel, the decision and action phases. People who do this often spend too much effort on bottom funnel channels such as paid search and retargeting, whilst totally forgetting that it's the top of funnel channels such as Facebook Ads or Display Banners that drove those users into the top of your funnel in the first place.
What is Attribution?
Attribution is the practice of deciding which touchpoints along the customer journey deserves to be awarded for the sale. If you are running digital marketing campaigns, you are already doing attribution, and if you didn't change your settings then you are most likely using the "last interaction" model of attribution.
What this means is that you are probably attributing 100% of the value of every conversion to the last touchpoint that the user clicked before converting. This is where we start to tie in the previous themes, and this is why most marketers make simple mistakes when considering their digital marketing plans.
Because the default attribution setting in almost every advertising and analytics platform is "last interaction", most marketers end up overvaluing the last click. THIS is why marketers forget about previous touchpoints in the customer journey, and THIS is why marketers concentrate too much on the bottom of the marketing funnel and not enough on the top of it.
These days it's actually very easy to change your attribution settings in Adwords and Google Analytics and when you do you will get a much fairer picture of how much each channel is really contributing towards your business goals. The only tricky part here is choosing the right attribution model that aligns best with your business goals. So, let's go through the available models and figure out which ones are best for which business goals. While we are at it, let's show you how to see different attribution models in Adwords and in Google Analytics.
How to Select a Different Attribution Model in Adwords
You can select a different attribution model in the old Adwords interface by going to Tools > Conversions:
Select your desired conversion action and then edit the settings:
In the settings for your conversion, select a different option under "Attribution":
How to Compare Different Attribution Models in Google Analytics
In the side bar, select the Attribution Model Comparison Tool:
By default the "Last Interaction" model will be selected for comparison. Select a second model to compare it against:
Now you can see a comparison of the two models and get the percentage change that would happen for each channel if you were to attribute all conversions based on the comparison model. I recommend you play around with the different options in this report to get an idea of how your attribution would change with each different model. Next up we'll have a look at each model, how it works, and what it is good for.
Last Interaction
This is the model that Google Analytics and most ad platforms default to. This model attributes 100% of the value of the conversion to the last channel that drove a click. This is probably the simplest and most widely used model available. This is how attribution has worked since before the times that "attribution" was a relevant word for digital marketers. The benefits are that it is simple, but the main disadvantage is, well... it sucks! It consistently under-weights the channels that drove any awareness or action before the final click. Not a great situation to be in if your goal is to grow and maximise profits.
Last Non-Direct Click
This is the same as Last Interaction, but it excludes the last direct click. This is slightly better than last interaction, because if someone navigated directly to your site they MUST have found out about you somewhere else, unless they happened to guess your URL which is unlikely. So, by using last non-direct click, we ignore the last click if it was a direct one and instead look at whatever channel was last clicked other than direct. This model is very similar to last interaction and has similar advantages and disadvantages. It's a slight improvement on last interaction and will be useful if you don't want to stray too far from what you are used to, but do want to get slightly smarter about attribution.
Last Adwords Click
Your Google Analytics conversion numbers and your Adwords conversion numbers are very unlikely to match up 100%. Part of the reason for this is that Adwords will attribute 100% of the conversion whenever Adwords is anywhere in the customer journey, whereas Google Analytics (GA) will only attribute the sale to Adwords when it is the last click in the journey. By using the "Last Adwords Click" model in GA, you can see numbers in GA that will more closely match to the numbers you see in Adwords.
First Interaction
This is the direct opposite of the usual default Last Interaction model. This model awards all of the conversion to the FIRST channel that was clicked on. This is useful if you want to aggressively grow your business, as it will award those channels that drove awareness. However, like Last Interaction this is a simplistic model that does not tell the full story. It's usually best to use a more sophisticated model.
Linear
This model would make a great diplomat in the digital marketing world. It favours no touchpoints more than any other, and instead gives equal weight to every touchpoint along the way. This is a good place to start when you want a balanced attribution model, however the next two models are probably better suited in most cases. The main con here is that it overvalues unimportant touchpoints and undervalues important ones.
Time Decay
This model give some credit to every touchpoint, but it gives more weight to the touchpoints at the end of the journey and less weight to the touchpoints at the beginning of the journey. This is an efficient model that gives some credit to every touchpoint but gives the most to the final touchpoint. The main con here is that it possibly overvalues the stuff at the bottom of the funnel.
Position Based
This model gives most of the credit to the first and last interaction, with the remaining credit given to the touchpoints in the middle. This is our go-to attribution model and for clients that don't want to spend too much time fretting about models but do want a better one than the default, this is what we set them to. If you are unsure what model is best for you but you do want to be smarter about your model, give this one a try. The con here is that it can undervalue middle touchpoints, especially when the sales cycle is long.
What Steps Should I Take Next?
Go in to Google Analytics and start comparing the different models. Get an idea of which channels are being overvalued and undervalued on the default Last Interaction attribution model. Once you have a good sense of this, start using a better attribution model to make your budgeting decisions. You may find that you should be spending more on Display or Facebook ads, or you may find that certain channels such as retargeting are worth a lot less to you than you previously thought and you may decrease bids there as a result.
While you are at it, head in to Adwords and select a better attribution model as your default one. I recommend going for Position Based if you are not sure. As soon as you select a new model, all your decisions you make based on conversion data will become much smarter, as you will now be considering your channels based on a greater awareness of your typical customer's journey.