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What is time decay attribution?

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Definition of time decay attribution

Time decay attribution is a model used by marketers to understand the effectiveness of their marketing channels. It’s a way of giving credit to the different touchpoints a customer interacts with before making a purchase. The closer a touchpoint is to the final sale, the more credit it gets. This means that the last ad a customer clicks on before buying gets the most credit, and the ones they clicked on earlier get less.

This model is based on the idea that the most recent interactions had the most impact on the customer’s decision to buy. It’s a useful tool for marketers because it helps them identify which of their marketing efforts are most effective at driving sales. This can help them make more informed decisions about where to invest their marketing budget.

An example of time decay attribution

Here is an example of how it works:

Growth Method, a SaaS company, launched a marketing campaign to attract new customers. The campaign included email marketing, social media ads, and search engine optimisation (SEO).

John, a potential customer, first discovered Growth Method through a social media ad. He clicked on the ad, browsed the website, but didn’t sign up. A week later, he received an email from Growth Method, reminding him of their services. He clicked on the email, revisited the website, but still didn’t sign up. Two weeks later, he searched for SaaS companies on Google, saw Growth Method in the search results, clicked on the link, and finally signed up for a trial.

In this scenario, the time decay attribution model would assign the most credit to the last touchpoint, which is the SEO. The email marketing would get less credit, and the social media ad would get the least credit, because it was the first touchpoint and happened the longest time ago. This model assumes that the touchpoints closer to the conversion are more important.

How does time decay attribution work?

Time decay attribution works by assigning more credit to the marketing touchpoints that are closer to the time of conversion or sale. This model operates on the assumption that the most recent interactions a customer has with a brand are the most influential in their decision to make a purchase. Therefore, the last ad or marketing effort a customer interacts with before buying gets the most credit, while earlier touchpoints receive less. This allows marketers to understand which strategies are most effective in driving conversions and adjust their efforts accordingly.

Expert opinions and perspectives

Here are how some of the world’s best marketing and growth professionals, and companies, think about time decay attribution.

  • “Time-decay attribution is a multi-touch attribution model that gives some credit to all the channels that led to your customer converting, with that amount of credit being less (decaying) the further back in time the channel was interacted with.” – Dan Wakefield https://www.callrail.com/blog/what-is-time-decay-attribution
  • “In the Time Decay attribution model, the touchpoints closest in time to the sale or conversion get most of the credit” – Google https://support.google.com/analytics/answer/1662518
  • “Time decay attribution model assigns more conversion credit to the interactions which are closest in time to conversion” – Himanshu Sharma https://www.optimizesmart.com/time-decay-attribution-model-in-google-analytics/

Questions to ask yourself

As a modern growth marketing or agile marketing professional, ask yourself the following questions with regard to time decay attribution:

  1. Am I giving enough credit to the marketing touchpoints that occur closer to the conversion?
  2. Does the time decay model accurately reflect the customer journey in my business?
  3. Am I adjusting the time decay model to account for changes in customer behaviour over time?
  4. Is the time decay model helping me to identify the most effective marketing channels for my business?
  5. Am I using the insights from the time decay model to optimise my marketing strategy and drive growth?

Additional reading

Here are some related articles and further reading around time decay attribution that you may find helpful.

  1. “Understanding marketing attribution models” – Smart Insights
  2. “Multi-Channel Attribution Modeling: The Good, Bad and Ugly Models” – Occam’s Razor by Avinash Kaushik
  3. “Attribution Modeling: A Comprehensive Guide” – Marketing Evolution
  4. “The Definitive Guide to Attribution and Mix Modeling” – Neil Patel
  5. “Time Decay Attribution Model in Google Analytics” – E-Nor Analytics Consulting

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