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Here’s Why Everyone’s Talking About the Data-Driven Attribution Model in Google Ads
Marketers have a lot calling for their attention these days. There’s always a new campaign to push, and a new way to track its success. If you manage paid search for your business, you may be wondering whether 2020 is a good time to overhaul your attribution strategy.
Using the right attribution model is critical for truly knowing what, precisely, is behind the success of your PPC campaigns. But is first-click or last-click better for you? What about the (relatively) new data-driven attribution model everyone seems so interested in?
Below we get into the different attribution models available today, and why the data-driven model may be the right choice for your business.
Different PPC Attribution Models in Google Ads
Google Ads offers several attribution models for you to choose from. Here’s a graphical representation of how they work:
If this looks like Greek to you, don’t worry. It will all become clear after we spell out the details:
- First-click: The first-click model attributes the value of a conversion to the first ad in a campaign. This can be valuable for identifying which ads set customers down a path that ultimately leads to conversion, but it ignores the impact of other interactions in a campaign.
- Last-click: Oppositely, with last-click, Google Ads attributes the conversion to the final interaction a customer had before they finally converted. No matter how many ads they see before, a customer’s conversion gets attributed to the final one that leads to their purchase.
- Time decay: With this model, the value of the conversion gets spread across the ads in a campaign, with more value getting assigned as you near the final click. This paints a more realistic picture than last-click, but it’s not the full story, as it assumes that the ads a customer sees before finally converting are more responsible for driving their ultimate conversion than the interactions they had before.
- Linear: In this model, the value of the conversion gets split across all interactions in a campaign. The problem here is that it assumes each ad or interaction is of equal value in persuading the customer to convert, and as we all know, that rarely represents reality.
- Position-based: The position-based model assigns 40% of the value of the conversion to both the first and final interaction, with the remaining 20% split across interactions that occur in between.
- Data-driven: Introduced by Google in 2016, the data-driven model uses machine learning to identify patterns among your campaigns and assign value to each interaction in the customer’s path, based on how they actually affected the final conversion.
Which Google Ads Attribution Model Should You Choose?
The best model depends on the type of campaign you’re running and your goals, but there are some clear disadvantages to many of these that are worth being aware of.
The first-click fails when it comes to analyzing the success of an ad set or campaign as a whole. When you focus only on the first interaction, you lose potentially valuable insights like: how many subsequent interactions a customer who sees that first ad usually takes before converting, whether different intermediary ads can shorten the path to convert, or whether some interactions along the way provide no value at all.
With last-click and time decay, on the other hand, the initial ad in a campaign could be virtually ignored—even though it’s actually a critical step in kicking off the process that leads to the final conversion. Both of these attribution models assign little or no value to that first touch ad. If you’re running a prospecting campaign, that just won’t work.
Linear and position-based attribution models aren’t perfect, either. Both of these can run the risk of attributing part of a conversion to one of the ads in a campaign, simply because it exists or simply because of the time it exists—when in reality, the ad may have no sway over the final conversion.
It’s because of all this that, whenever possible, we like to use the data-driven attribution model at Your Marketing People. It does the best job at providing the full picture of the path that leads to the final conversion, and attributing value where it belongs along the way. Because Google’s algorithm evaluates the entire path and compares it to other user’s paths, the data-driven attribution model also helps identify any touchpoints (or campaigns) that are NOT adding value. Useful, right?
The Data-Driven Attribution Model In Action
Here’s an example of how powerful the data-driven attribution model can be. Let’s say you run an eCommerce site that sells outdoor gear, and a conversion occurs after the following paths for customers A, B, and C:
- Customer A clicks [Prospecting AD] >> x days later [Camping Tents AD] >> x days later [Brand AD] = 3% Conversion Rate
- Customer B clicks [Camping Tents AD] >> x days later [Brand AD] = 2% Conversion Rate
- Customer C clicks [Prospecting AD] >> [Camping Tents AD] >> [4-Person Tent AD] >> [Brand AD] = 3% Conversion Rate
With last-click attribution, the Brand campaign would get the credit in all three instances.
With first-click attribution, the credit would go exclusively to the Prospecting and Camping Tents Ads, and none would go to the Brand Ads. If you looked at that data, you might then decide to pull back spend on your branding campaigns, but that would be the wrong idea.
With the data-driven attribution model, each campaign in the path would receive some credit. In the case of Customer C, Google Ads would even let us know that the 4-Person Tent Ad didn’t improve the conversion rate, so we can stop spending money there. But, we should spend more on our prospecting campaigns, because when Prospecting gets added to the path, the conversion rate for customers like Customer B bumps from 2% to 3%!
Here’s another example from Google Ads themselves:
These are just two examples of the insights data-driven attribution model can provide. It’s no surprise this model can deliver more conversions, but with a similar CPC, to last-click campaigns. And that’s according to Google’s own data.
Interested in setting up data-driven attribution for your paid search ads? Contact Your Marketing People now.
