ATTRIBUTION MODELLING FOR DUMMIES (AND MARKETERS) – READING TIME: 3 MINUTES

Category: Articles

By: Pavel Šíma, Roivenue CEO
[LinkedIn] [Twitter]
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For long I have struggled to conceptually grasp different attribution models via mathematical equations. So, I devised simple,

real-life metaphors for them. This way it shouldn’t take you more than 3 minutes to finally understand all the most frequently

used attribution models in digital marketing and recall them with ease.

 

 

 

1) HEURESTIC (=TOTALLY USELESS) ATTRIBUTION MODELS

 

 

A) MODELS WITH ONE SOURCE OF ATTRIBUTION

 

LAST CLICK

 

LAST CLICK Attribution model

 

All the glory goes to the striker – even if he is totally lame, everything was fought out by the rest of the team and he merely

put his foot in the path of the shot.

 

 

FIRST CLICK

 

FIRST CLICK Attribution model

 

Who is to blame for all the bad deeds in my life? My mother of course. For she stood at the dawn of my existence.

 

These above models are as far from reality as the burger you get at the counter is from the one you see on the billboard.

 

B) MODELS WITH MULTIPLE SOURCES OF ATTRIBUTION

 

LINEAR

 

LINEAR Attribution model

 

“The most important thing is not to win but to take part!” This supposes that in a tug of war, an anorectic celeb who was

put on your team to attract more viewers makes the same contribution as a 250-pound wrestler.

 

TIME DECAY

 

TIME DECAY attribution model

 

Sure, I am grateful to all the Chinese manufacturers who put the pieces together, the freighters who brought it across the

ocean, and the retailers who sold it to me. However, most of the margin will go to Apple as they put their logo on the box.

 

With these models, at least all the credit doesn’t go to one person. The level of inaccuracy is still humungous, though.

 

Do you really think a human brain can actually decide which touchpoints should be assigned which weight?

Didn’t think so.

 

 

2) DATA-DRIVEN (ALGORITHMICAL) ATTRIBUTION MODELS

 

They try to calculate the probability a certain channel contributed to a conversion.

 

SHAPLEY (ALSO KNOWN AS GAME THEORY)

 

SHAPLEY (ALSO KNOWN AS GAME THEORY)

We all have such a friend. When he shows up at a party it’s always a blast. Then one day, he doesn’t come and you are

bored to death. A hunch tells you that he is a really important part of a good party. But how can you be sure?

 

Imagine, you went to 10,000 parties a year instead of ten, both with and without your mate. By the end of the evening you

would rate all of them from 1–10 on a scale of awesomeness.

 

Then you would easily be able to calculate the probability that he’s the most important ingredient of a good party.

 

The same way, you could evaluate any guest (= marketing channel) at every party (= conversion path).

 

Shapley’s big problem is that it doesn’t take the order of guests/channels into account. Somebody is a great party starter

who nevertheless falls into a coma at 9 PM. Standing on your feet at 4AM is an entirely different discipline. You need a

great mixture of all these types of people to throw a legendary party.

 

MARKOV (ALSO KNOWN AS MARKOV CHAINS)

 

How does gossip get spread in an organization? Sometimes you get them directly from the source, sometimes they

travel through six nodes of people, while other times they get stuck in a loop and never reach your ears.

 

Michael knows about the latest scandal first and tells Monica about it over lunch. In the bathroom, Monica passes it on

to Jane. Back in the office, Jane tells Michael about it again. After that, Michael goes directly to you.

 

If you omit Michael you are pretty much screwed and will learn nothing. On the other hand, Monica and Jane are not all

that important in the chain as Michael would probably have told you anyway. That’s why Michael is the most important

informant.

 

How do you determine who’s the most valued informant (= marketing channel) in the long run? Try to send different

employees for a long vacation and observe if the level of information passed on to you dropped off or not. If it did –

the guy on vacation contributes to conversions a lot.

 

MARKOV CHAIN 1ST ORDER

 

MARKOV CHAIN 1ST ORDER

It measures the influence of the movement of the information (= nudging people closer to conversion) to the very next

person (= channel).

 

MARKOV CHAIN 2ND ORDER

 

MARKOV CHAIN 2ND ORDER

It measures the influence of the movement of the information to the next two people because if, for instance, you often

talked to Jamie who is mute and couldn’t pass the gossip on to anyone else, the first-order Markov would blame you.

Not fair!

 

 

WHICH ATTRIBUTION MODEL IS THE BEST?

 

Our opinion at Roivenue is that it is th e Markov model. You don’t necessarily have to trust us, though. Just looking at what

different models say about your data is often an eye-opening experience. In our experience, with some channels you can

find up to a 300% (!) difference in how the different models value their contribution.

 

Graphic to compare different attribution models

 

Choose for yourself which attribution model you want to trust the most. Roivenue will allow you to compare all of them.

Once you decide which is the best, you can switch the whole application and order all metrics to be recalculated with one

click of a button.