Trying to determine which marketing channels are producing the most leads, customers, or revenue can be tricky. But don’t worry, we’re here to help you understand the right affiliate attribution model for your in-house affiliate program.
In this post, we’ll walk you through the different attribution models available and help you choose the right one for your in-house program. We also have a full guide on starting an in-house affiliate marketing program.
First, let’s start by breaking down what an affiliate marketing attribution model is.
What is an Affiliate Attribution Model?
An affiliate marketing attribution model is the method by which credit for sales and conversions is assigned to touch points along the customer journey. In other words, it’s how you determine which part of the sale can be attributed to each step in the process, from initial awareness all the way through to purchase.
It’s important to have a clear understanding of your affiliate attribution model for many reasons. First, it directly affects your commission structure and overall strategy. Second, it allows you to make informed decisions about where to allocate your resources for the greatest return on investment.
Launching your program without a well-defined attribution model is like driving without a GPS. You might eventually get to your destination, but the journey will be much more difficult. Also, you’ll likely make a lot more wrong turns along the way.
Now that we’ve covered the basics, let’s take a closer look at some of the most common attribution models used in affiliate marketing.
Different Types of Affiliate Marketing Attribution Models
There are a number of different attribution models that you can choose from. The one you select will depend on your specific business goals and objectives. The model you choose will also affect how you measure success and what counts as a “conversion.” We’ll go over a few of the most popular options below.
- First click
- Last click
- Linear
- Position-based
- Time decay
- Algorithmic
- Preferred
- Custom
Affiliate attribution model – First click
With first click attribution, all credit for a sale or conversion goes to the very first touchpoint. This could be the initial click from an email campaign, an ad, or a social media post. This model is popular with businesses focused on generating brand awareness and initial traffic.
One plus of the first click attribution is you know which campaigns are most effective at generating initial interest. However, you might miss out on credit for later touches that helped close the deal.
For new SaaS companies, this model can be especially useful. SaaS products need to generate awareness and interest before they can start closing deals. By attributing all credit to the first touch, SaaS companies can see which campaigns are worth their investment.
The downside is that first click attribution can be difficult to track if you’re not using software that specializes in it.
Affiliate attribution model – Last click
The last click attribution model is the opposite of the first click design. One hundred percent credit for a sale or conversion goes to the very last touchpoint. For example, if a customer reads an email, clicks through to your website, and then makes a purchase, the last click would get all the credit. It’s also called the qualified lead model.
This is probably the most commonly used model. For one, it’s simple to understand and easy to implement. Also, it’s more likely to reflect the reality of the customer journey, which is often a complex mix of multiple touchpoints. That said, the last click attribution can be misleading. Just because someone clicked on your ad right before they converted doesn’t mean your ad was responsible for the sale.
This model could help SaaS companies with easy-to-use products that don’t require a lot of explanation. If potential customers can quickly understand your product and its value, they’re more likely to convert without a lot of guidance.
Consider the following when selecting this attribution model.
- This model is best suited for short sales cycles where customers can quickly understand your product.
- You might want to use this model if you’re running ads on well-known platforms like Google or Facebook.
- Tracking can be difficult if customers are clicking on multiple ads before converting.
Linear
With linear attribution, credit for a sale or conversion gets evenly distributed across all touchpoints. For example, if there are five touchpoints, each one would get 20% credit.
This model is popular because it’s easy to understand and implement. It also provides a more accurate picture of the customer journey, which is often complex and multi-faceted. However, linear attribution can be difficult to track and measure. It is especially difficult to communicate the commission calculation to affiliates for individual referrals.
Here are a few things to note when choosing this model.
- Make sure to understand your customer’s journey so you can attribute credit correctly.
- You’ll need to track all touchpoints along the customer journey.
- This model is best suited for businesses with long sales cycles and sell complex products
Position-based
With position-based attribution, credit for a sale or conversion is based on the position of the touchpoint in the customer journey. It is considered a multi-touch attribution model. The most common attribution design is 40% credit to the first touchpoint, 40% credit to the last touchpoint, and 20% evenly distributed across all other touchpoints.
This model is popular because it’s easy to understand and implement. It also provides a more accurate picture of the customer journey, which is often complex and multi-faceted. However, position-based attribution can be difficult to track and measure.
For SaaS businesses with complex products or services, the position-based model is can be a good choice. That’s because the complexity can result in a longer sales cycle. Also, customers often need to touch the product or experience the service multiple times before they’re ready to buy.
For this model to work well, you need to track all touchpoints accurately. This will allow you to attribute credit correctly and make decisions about where to allocate your resources.
Time decay
With time decay attribution, credit for a sale or conversion decays over time. This means that touchpoints that are closer to the sale or conversion get more credit than touchpoints that are further away. So, it’s also another example of a multi-touch attribution model.
For example, a touchpoint that happened one day before the sale would get more credit than a touchpoint that happened one week before the sale.
Customer journeys are not always a straight line. So this model may not provide an accurate picture of the customer’s journey. It can also be difficult to track and measure touchpoints over time.
Algorithmic
With algorithmic attribution, a computer algorithm is used to assign credit for a sale or conversion. The credit is based on data from your customer journeys. This model is also known as data-driven attribution.
This model is popular because it’s objective and unbiased. The algorithm looks at all the data to determine which touchpoints had the biggest impact on the sale or conversion. However, this model can be difficult to set up and track. Also, it requires a lot of data to work effectively. Google recommends at least 15,000 conversions over 30 days. So may not be a good fit for small businesses or those starting out with attribution modeling.
Preferred
The preferred affiliate attribution model is a hybrid model that combines aspects of the linear, position-based, and time decay models. It’s also known as the “Linear with Decay” model.
With this model, credit for a sale or conversion is given to the first touchpoint, the last touchpoint, and any touchpoints in between that meet certain criteria. For example, the criteria could be a certain number of days before the sale or conversion, or a certain number of page views.
This model needs to be customized to fit your business. That’s because it’s based on the unique customer journey for your product or service. As a result, it can be difficult to set up and track. However, it can provide a more accurate picture of the customer journey.
Affiliate attribution model – Custom
You can create a custom attribution model. This model is based on your specific business needs and goals. For example, you might give more credit to touchpoints that resulted in a higher purchase amount. Or you might give more credit to touchpoints that resulted in a customer who stayed with your business for a longer period.
The benefit of customizing your attribution model is that you can align it with your business goals. However, this approach can be time-consuming and difficult to track.
To create a custom attribution model, you need to:
- Define your business goals
- Identify the customer journey for your product or service.
- Determine which touchpoints had the biggest impact on the sale or conversion.
- Assign credit to each touchpoint based on its impact.
There are three main types of custom attribution models:
- U-shaped
- W-shaped
- Z-shaped
U-shaped
This model gives the most credit to the first touchpoint and the last touchpoint in the customer journey. It’s also known as “first-touch” or “last-touch” attribution.
For example, let’s say a customer sees an ad for your product on Facebook. Then they visit your website and read a blog post about your product. After that, they see another ad for your product on Instagram. Finally, they click on a link in your email newsletter and buy your product.
In this scenario, the customer had four touchpoints with your business: Facebook, your website, Instagram, and your email newsletter.
With a U-shaped attribution model, the Facebook ad would get the most credit because it was the first touchpoint. The email newsletter would get the second most credit because it was the last touchpoint. The website and Instagram would get equal credit because they were in the middle of the customer journey.
This model can also give you a good idea of which channels are driving initial interest in your product.
However, this model has some drawbacks. It doesn’t take into account many touch points in the middle of the customer journey. So you might not be able to identify which channels are driving sales. Also, this model doesn’t account for how long ago a touchpoint occurred.
W-shaped
This model gives the most credit to the first touchpoint, the last touchpoint, and the touchpoints in the middle of the customer journey. It’s also known as “full-path” attribution.
For example, let’s say a customer sees an ad for your product on Facebook. Then they visit your website and read a blog post about your product. After that, they see another ad for your product on Instagram. Finally, they click on a link in your email newsletter and buy your product.
In this scenario, the customer had four touchpoints with your business: Facebook, your website, Instagram, and your email newsletter.
This model may work well for businesses that have a lot of touchpoints in their customer journey. That’s because it gives credit to all the touchpoints, not just the first and last ones. However, this model can be difficult to set up and track. It can also be difficult to identify which channels are driving sales.
How to track an affiliate attribution model in Google Analytics
If you’re using Google Analytics, you can set up affiliate attribution modeling in just a few steps.
- First, log in to your Google Analytics account and go to conversions > attribution > model selection.
- Next, select the attribution model you want to use from the list of options.
- Finally, adjust the settings for that model to fine-tune the results. For example, you can change the decay rate for the time decay attribution model or the number of touchpoints for the position-based attribution model.
You can also use Google Analytics to create custom attribution models. This can be helpful if you want to experiment with different combinations of touchpoints or weighting factors.
To create a custom attribution model, go to conversions > attribution > model selection. Then, select “custom” from the list of options. You’ll be able to create your own custom attribution model by selecting the touchpoints you want to include and assigning a weight to each one.
Once you’ve created your custom attribution model, you can save it and use it again in the future.
A/B Testing Your affiliate attribution model
Once you’ve selected an affiliate attribution model, you can also A/B test it to see if it’s really the best fit for your business.
To A/B test your attribution model, go to conversions > attribution > model selection. Then, select “A/B test” from the list of options. You’ll be able to create two different versions of your attribution model. You can then compare the results of each one to see which one is more effective.
You can also use A/B testing to compare different attribution models against each other. This can be helpful if you’re not sure which model is the best fit for your business. To do this, go to conversions > attribution > model selection. Then, select “A/B test” from the list of options.
Next, select the attribution models you want to compare from the list of options. You’ll be able to see how each model performs and compare the results. Once you’ve found the attribution model that works best for your business, you can stick with it or continue experimenting to find an even better model.
Affiliate attributions and tracking models
To make your attribution model work with your affiliate tracking, you might need help implementing the right affiliate attribution logic together with your technical team. Discuss which points of the journey should be attributed and develop your own unique tracking logic for your SaaS company.
Which affiliate attribution model to choose?
There’s no one-size-fits-all answer when it comes to attribution modeling. The best approach depends on your business, your products or services, your customers, and your goals.
Some businesses may find that a simple model like first-touch or last-touch attribution works well. Others may need a more complex model, like position-based or data-driven attribution, to get a clearer picture of the customer journey.
The best way to find out is to experiment with different attribution models. Try out a few and see which one produces the most accurate results. You can then use that information to make decisions about where to allocate your resources. Check out our full guide on how to start an affiliate program for SaaS.