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What is Multi-Touch Attribution and why do third-party cookies matter?

At the moment everybody seems to be talking about the death of third-party cookies and multi-touch attribution. But what is attribution modeling and why are third-party cookies so important?

At the moment everybody seems to be talking about the death of third-party cookies and multi-touch attribution. But what is attribution modeling and why are third-party cookies so important?

In this blog, we explain what multi-touch attribution is and how it is related to third-party cookies.

 

What is Attribution Modeling?

First things first, attribution modeling is a rule, or set of rules, that define how different sales or conversions are attributed to different touchpoints in the customer journey. In marketing, this often relates to specific channels and/or campaigns - for example, whether a specific Google Ads campaign had any impact on a particular sales or not.

Now, there are different attribution models that focus on different aspects. For example, First-Touch attribution attributes a sales or conversion to the first touch point a customer interacted while Last-Touch attribution attributes sales to the last touchpoint. Which model is used is very important as this necessarily impacts how a marketer measures the performance of their campaigns.


What is Multi-Touch Attribution?

Multi-touch Attribution is a popular and powerful type of attribution modeling that takes into account all the touchpoints that led up to a sale or conversion. In doing so, it provides a much more detailed view of the customer journey to give marketers a much more accurate picture of how well different campaigns or channels have or are performing.

 

How does Multi-touch Attribution work?

Well, the most effective way to do this online is with third-party cookies. For instance, let’s imagine you own an eCommerce website. One day, a user visits your website. They browse your site, decide on a purchase, and go to the checkout, but for some reason, they don't make the purchase and they go to a different website.

However, if both your website and the new website they visit have third-party cookies enabled, you can now target them with ads through an advertising platform. This means that when they enter another website, it reads the third-party cookie data and knows they were almost about to buy a particular product from your website. And, (if you've set up your campaigns correctly) that website shows them adverts for that product to encourage them to complete the purchase. 

 


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If this happens, it means you can attribute that ad impression to the sale of those shoes. You know that, however much you spent on that ad, contributed to X amount of revenue.

Now, in reality, it is much more complex than this - especially when you have multiple advertising campaigns simultaneously running across multiple platforms, with multiple customers, purchasing multiple products.

However, with multi-touch attribution, you are able to track how each touchpoint in the customer journey contributed to any given sale. For example, imagine the user sees multiple ads across multiple channels before finally clicking back to your website and completing their purchase. Multi-touch attribution allows you to understand the impact of all of those touchpoints on that sale.

 

Why is the useful to marketers?

Because it gives markets a really detailed understanding of how each of their campaigns is performing. With last-touch attribution, for example, marketers can only see how the last touchpoint impacted their sales.

Let's imagine you are running a Facebook Ads campaign and a Google Ads campaign at the same time and a user sees a Facebook ad but does not click on it. Later on, they see the same ad on Google and this time they click on it and make a purchase. With last-touch attribution, only the google ad would receive any credit for the sale however, the Facebooks Ad also played a role.

Nonetheless, a marketer using last-touch attribution might just decide to cut their Facebook Ad spend. With multi-touch attribution, on the other hand, the marketer has a much more detailed view and is able to see that both campaigns played a role in that sale, and can adjust channel spend accordingly.

 

What has all this to do with third-party cookies?

Ultimately, multi-touch attribution only really works with third-party cookies. This is because third-party cookies are required to track a user as they move around the internet. The so-called death of third-party cookies means that marketers will no longer be able to see all the different touchpoints that led up to a particular sales and, as such, the multi-touch attribution model falls apart.

 

 

 


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Author: Tom Rennell

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