Paid vs Organic: Understanding Attribution in Your Metrics
Very few eCommerce brands use only paid or only organic marketing efforts. So why do we think about it as an either/or question?
The Manifest reports 86 percent of marketers use both paid and organic marketing tactics. “Organic marketing is critical because it lets you develop and maintain a brand presence,” the report says. “Nurture your audience with a content-driven experience that leads to engagement and eventual loyalty.”
At the same time, paid advertising holds an important place as well: “If you have the budget, paid marketing shouldn’t be overlooked. It’s a quick and effective way to gain traction and drive conversions with customers.”
The bottom line is, both paid and organic advertising efforts hold a critical place in the modern marketing mix. The question here isn’t “which advertising approach is more important” but instead “how can you get the most out of each type of advertising?”
To help you get started answering that question for yourself, these are the attribution models you have available.
Six Attribution Models to Choose From
Well, there really are more than six. But these are the six most common attribution models, including our favorite.
At its best, an attribution model gives you the tool you need to understand where your traffic is coming from and why. The definitions for these six models are pulled from OrderMetrics’ Profit Guide on attribution in eCommerce. To get the most out of advertising, take the type to truly understand attribution for eCommerce, including the pros and cons of each model — you can see a more detailed discussion in the Profit Guide.
Last Interaction
“This is the default setting that Google Analytics uses to track your campaign. It gives 100% of the credit to the interaction that immediately preceded the sale. Important? Absolutely. Short sighted? Incredibly. While utilizing the data from this model could help increase sales by adding focus to interactions that close them, ignoring any other marketing touch points that got your customer to the conversion point will limit the potential of your campaign.”
Last Non-Direct Click
“This model shifts the credit to whatever ad campaign, organic click or paid action led to a conversion, excluding any that came direct. Direct is when someone types in your URL or it can happen when someone follows a link from outside the browser. It overvalues the previous non-direct click though, discounting whatever reason they came to your site directly. This can be useful for boosting sales by over-investing in effective ad campaigns but relying on it completely could lead to an over-reliance on paid content.”
Last Ad Click
“In this model, all the credit goes to Ads, wherever they may be along the actual path to conversion. It’s a great way to make Google look great. It’s also a great way to analyze the effectiveness of your Ads campaign. If a certain ad is performing stronger than others, this model will make it look like a star. It pays no need to organic search or direct traffic.”
First Interaction
“When tracking your customer’s sales story, why not start at the beginning? This is a great way to monitor the top of your funnel and figure out what hooks are most effective at sending your clients down the path to you. However, be careful not to discount the actual channel that created the conversion.”
Time Decay
“The first multitouch model! This model doles out credits based on how long it takes for your customers to convert. Channels they saw five days ago that influenced them still get a little love, but not as much as the channel that immediately led to the conversion. It’s a pretty efficient model and a good starting point into this process. However, it tends to undervalue the first touch. If a strong ad hooked them in the beginning and got them thinking about you, this model may not give the credit it deserves.”
Position Based
“The Goldilocks model for e-commerce in our opinion. In the position-based model, 40% of the credit goes to both the first and last touch points, and then the remaining 20% is spread evenly among the rest of the journey. Does it have the potential to undervalue your mid-funnel touch points? Absolutely. However, that can be worth it to give proper credit to both the value from the first touch point and the efficiency of the closing touch point. This is the model that will be most effective for the vast majority of small to medium sized businesses. If you want a “set it and forget it” model, position-based is the way to go.”
How Paid and Organic Advertising Support Each Other
If these attribution models show us anything, it’s that paid and organic advertising are not at odds. With marketing attribution you can see which endeavors are working, which are not, and where you need to make improvements.
With the right attribution model (and the data behind it), you can see how an initial search ad can work at the top of the funnel, ultimately leading to a conversion with an organic click at the bottom of the funnel.
Or the reverse could be true. You won’t know until you set up your attribution model and see what is working for you.