What is revenue attribution and how does it compare to ROI?

As a marketer, you’re likely familiar with the ever-increasing pressure to demonstrate the impact of your efforts on your business’s bottom line. That’s where revenue attribution comes in. In this blog, we’ll delve into revenue attribution, how to measure it, what models are available, and why revenue attribution wins over return on investment (ROI).

What is revenue attribution?

Revenue attribution is a method of connecting different data sets to paint a picture of which marketing channels are producing the best sales and revenue. It essentially draws a line (direct or otherwise) between the efforts of a marketing campaign and the revenue generated as a result, so you can see what is or isn’t working when it comes to your marketing strategies. 

Whatever your product, market, or role, finding the right attribution model for you and your business is critical for getting the most accurate information that’ll help you and your marketing strategies.

Not only do businesses and products differ, but your roles differ too. What a Marketing Director wants to take away from an attribution model will differ from that of a Content Manager, so having the flexibility to change your attribution tracking window for multiple users is a useful tool for accurately tracking revenue attribution.

How do you measure revenue attribution?

Tracking revenue attribution is done through a variety of different models. Depending on your role within or connected to marketing, different models will provide you with details more relevant to you and what you want to know. There are five commonly used models when it comes to tracking revenue attribution, each of which has pros and cons. Let’s take a look at these models below:

First touch

As the name implies, this model attributes 100% of the success of a marketing campaign to the very first touchpoint used. It’s good as it can help you identify which of your channels are attracting the most new customers, as the emphasis is placed on the top of the funnel marketing channels. Its downside is that doesn’t help you see to what extent the first touchpoint actually contributed to the final conversion.

Last touch

Converse to the first touch model, the last touch model attributes 100% of a campaign’s success to the final touchpoint ahead of conversion. It’s a simple and easy-to-track model, but it doesn’t attribute any success to other marketing channels used before the final conversion, even though multiple channels may have been used and engaged during the lifecycle of a campaign. This model is called the “direct campaign revenue” model in Dotdigital.

Linear

This is one of the more simple models, as it just splits the success of a campaign equally across all touch points. So if you had a five-channel campaign, each of those channels will be allocated 20% success to the final conversion. 

The downside to this is that it doesn’t take into account the potential for different channels to be more successful than others, therefore, it won’t efficiently inform you which of your marketing strategies are more successful than others.

Time-decay

As with the Linear model, this distributes campaign success across multiple touchpoints, but where it differs is that it gives more credit to touchpoints closest to the final conversion. Essentially the model assumes that the closer a touchpoint was to the conversion, the more influence it had in the process. 

It’s effective for determining which channels are regularly driving conversions, but will never give a completely accurate summary of how the top-of-the-funnel marketing activities have performed. In Dotdigital, this model is referred to as “assisted campaign revenue”. 

Positional

This model splits the credit of a campaign across all touch points, with 40% being allocated to both the first and last touch points, and the remaining 20% being allocated equally across all of the middle touch points. This still doesn’t often place high enough value across the middle touchpoints which can often skew the results

At Dotdigital, we offer either a “last touch” or “time-decay” model, along with a fully flexible conversion window tailored to your business and your customers. 

Revenue attribution for email

Revenue attribution for email in Dotdigital works with two key models; direct campaign revenue (similar to “last touch”) or assisted campaign revenue (which is a combination of the “last touch” and “linear” models). These models work through the tracking of interactions (i.e. clicks) between a contact and a campaign, before looking into the purchase data. 

After this is done, inference logic is used to track the conversion journey, which can be both multi-touch and cross-device. When a customer clicks on a link within your email, a unique tracking code will be assigned to that customer. The code is then stored as a cookie, allowing Dotdigital to track all subsequent actions, such as making a purchase.

Once the purchase is completed, Dotdigital will attribute the generated revenue from that purchase to the marketing campaign that led to the sale. This is completed by analyzing the campaign interactions preceding any contact’s purchase, within the conversion window. This allows you to understand which of your campaigns are driving sales and contributing to revenue. 

As well as tracking and attributing the revenue, Dotdigital provides a series of comprehensive reporting tools to analyze the revenue attribution data. These reports support you in identifying high-performing campaigns and allow you to make data-driven decisions to further optimize marketing campaigns. 

Revenue attribution for SMS

SMS is the ideal channel to support email, due to high open rates and engagement from customers. So offering revenue attribution for SMS gives you that extra overview of overall campaign success. As with email, it tracks both direct and assisted campaign revenue to easily track how different touchpoints are performing throughout the customer journey. 

It works the same way as revenue attribution for email. Each SMS is assigned a unique tracking code and is embedded in all links included in the SMS message. This allows you to track all interactions with the message, such as clicks and conversions. 

Any click will be recorded and associated with the specific campaign and message. If your customer then goes on to complete a purchase, the revenue attributed will be generated from that action to the corresponding SMS campaign. 

Overall, revenue attribution for SMS helps you to identify your most effective SMS campaigns and strategies, allowing you to refine future campaigns to ensure they’re more targeted and effective. They can also help identify valuable customers and segments, allowing you to better serve customers who engage and purchase through SMS marketing. 

ROI vs. revenue attribution

For many years, ROI was the gold standard for checking how your marketing is performing vs converted sales. But since revenue attribution came on the scene, it has begun to take over as the leading method of tracking marketing effort vs sales. 

There are several benefits to using revenue attribution over traditional ROI methods of tracking. It goes far beyond the “This is what we’ve spent in total vs this is how many sales we’ve made” comparison that ROI uses. Here are the key benefits of revenue attribution: 

• Revenue attribution provides more granular insights to pinpoint specific marketing activities that are driving sales, enabling better decision-making and optimization of each channel. 
• By understanding which channels and campaigns contribute the most, you can distribute and allocate budgets more efficiently and prioritize high performing channels.
• Attribution models can consider multiple touchpoints, so companies can measure the impact of their entire marketing funnel across various channels. ROI only looks at the whole picture without breaking down the details.
• Revenue attribution helps identify the most effective marketing channels and campaigns, enabling companies to refine and focus their strategies and efforts on what works best.
• While ROI provides a general measure of the profit generated from marketing investments, revenue attribution attributes value to specific touchpoints, offering a more detailed analysis of marketing performance.
• Revenue attribution equips you with better information for creating long-term marketing strategies and adapting as needed. You can also use this for annual campaigns by using the results from the previous year (such as Black Friday/Cyber Monday campaigns).
• By mapping out the customer journey across touchpoints and stages, you can create more personalized and engaging marketing experiences.

How to get started with revenue attribution

If you’re an existing ecommerce customer of Dotdigital, you can get started with revenue attribution right away. If you use our customer and retail dashboards, you’ll find there is a wealth of data at your fingertips ready to help you get started. 

You could start by looking at amending your attribution window (the default is set to five days, but remember you have the flexibility to change this to reflect your sales cycle) to help you find the best conversion window for your needs. 

The good news is, whatever conversion window you choose, it’s not ‘forever’. You can always come back to your settings later and tweak it should it not feel quite right. You should also bear in mind the average sales cycle of your products when it comes to setting your window. If your product generally has a longer sales cycle, then your window should be set to reflect this. 

On the other hand, if your products have a much shorter cycle, then again it would be better to set your window to a much shorter period. It’s good to bear in mind what your other existing attribution models are telling you. For example, Google Analytics is set to a 30 day window by default.

What makes the Dotdigital revenue attribution stand out even more is that it’s ready to see the world. It doesn’t matter if your customers complete their transaction in dollars, yen, pounds, euros, or any other currency – our integrated Forex conversion rates will track the exchange rate back to the day of the transaction, giving you the confidence that the numbers you see can be relied on.

All existing customers get in touch with your Customer Success Manager, who’ll happily guide you through the process of getting started with revenue attribution.

If you’re not currently a Dotdigital customer, get in touch with us today to explore how the platform can help you advance your marketing strategy.