Short answer: it’s the science of determining what media are driving purchases.
Long answer (from our white paper, “The Definitive Guide to Marketing Attribution“)
Before someone purchases a product or service, they are exposed to numerous marketing “touchpoints". These touchpoints cover a wide range of interactions, from seeing a television commercial to conducting online price comparisons on a comparison shopping engine (CSE) site. Attribution is the science of assigning credit or allocating dollars from a sale to the marketing touchpoints that a customer was exposed to prior to their purchase. When a paid product or service isn’t directly involved, so called “conversion events” such as a signup or registration for a website can be used instead of a sale, and credit for such a conversion can be assigned to marketing touchpoints in the same way.
In proper attribution modeling, that credit is assigned proportionally to each touchpoint according to its influence on the customer’s purchase or conversion decision. The goal of attribution is to determine which touchpoints are producing a positive result, and, by using the cost of each touchpoint, an advanced attribution system can then show which touchpoints are profitable. This allows unprecedented optimization of marketing expenditures.
Early attribution models fell well short of the goal of understanding each touchpoint. For example, the “Last Click” or “Last Touch” model assigns all credit to the last touchpoint and ignored all earlier activity. The First Click model does the opposite, giving all credit to the first touchpoint and ignoring all others. Despite the extreme inaccuracies in these models, they are still used today by many advertisers to determine the value of touchpoints. For example, many affiliate publishers are still paid by advertisers today based on a Last Click model.
In advanced attribution modeling, relationships between various touchpoints are well understood and modeled accordingly. For example, customers that search for your product online after seeing an ad on broadcast TV will behave much differently than customers that come upon your product after doing blind internet searches for a type of product that they know they need. Understanding these interactions across marketing channels (broadcast TV to search) and across devices (tv to a smartphone, tablet, or PC) is the key to any attribution system. Failure to account for these types of interactions will make any attribution system inaccurate and flawed.
It is only recently, with technological advancements that allow user behavior to be followed anonymously and in a truly privacy compliant way, that advanced attribution systems have become possible. For the first time, we are able to observe all touchpoints leading to a conversion, and make highly accurate predictions of what particular marketing expendi-tures and interactions will produce what results. We know this is true based on the results obtained by advertisers using these advanced, and scientific, attribution systems. This has enabled a revolution in marketing measurement that many companies are already taking advantage of to dramatically improve their results.
At Convertro, we use our own algorithmic attribution model, informed by accurate data that we collect first-hand, to power our marketing optimization software.