Paid vs Organic: Understanding Attribution in Your Metrics

paid vs organic advertising

Do you prefer paid or organic advertising?

Your answer is most likely ‘both’, since they serve different purposes.

According to The Manifest, 86 percent of marketers use both paid and organic marketing tactics.

“Organic marketing is critical because it lets you develop and maintain a brand presence,” the report says. “Nurture your audience with a content-driven experience that leads to engagement and eventual loyalty.”

At the same time, paid advertising holds an important place as well: “If you have the budget, paid marketing shouldn’t be overlooked. It’s a quick and effective way to gain traction and drive conversions with customers.”

The bottom line is, both paid and organic advertising efforts hold a critical place in the modern marketing mix. The question here isn’t “which advertising approach is more important” but instead a series of interrelated questions, including:

  • What is the best way to build attribution into your eCommerce metrics?
  • When should you put paid advertising ahead of organic advertising, and vice versa?
  • How can you get the most out of each type of advertising?

The answer (or, at least one answer) to all three of those questions comes back to choosing the right attribution model.

Six Attribution Models to Choose From

Here’s a secret: there really are more than six attribution models. But these are the six most common attribution models, including our favorite.

First things first: remember it’s about choosing an attribution model that makes the most sense for your eCommerce brand and presence.

Uncontested SEO king Neil Patel has something to say about that. “You have to choose the right analytics attribution model for each marketing strategy,” Patel writes. “Using one or several attribution models helps you determine which campaign should gain the credit for each conversion. But there’s not a one-size attribution model for all business or even all campaigns.”

In other words, you should ask two questions as you consider the various attribution models you have to choose from: which will work best with my business and which will work best with a specific campaign? It’s not as if you have to choose a single attribution model and run with it; you can mix and match as needed to give you the best picture of how your campaigns — both paid and organic — are doing.

As Patel concludes, “The only right attribution model is the one that provides you with valuable information to increase ROI from your strategy. If a model isn’t doing that, then you could better spend your testing and iterating energy elsewhere.”

So let’s jump into your best options. The discussion of these six attribution models is pulled from OrderMetrics’ Profit Guide — specifically the section on understanding and putting attribution models to use. For more information on how to plug attribution models into optimizing paid and organic marketing, head over there.

Last Interaction

“This is the default setting that Google Analytics uses to track your campaign. It gives 100% of the credit to the interaction that immediately preceded the sale. Important? Absolutely. Short sighted? Incredibly. While utilizing the data from this model could help increase sales by adding focus to interactions that close them, ignoring any other marketing touch points that got your customer to the conversion point will limit the potential of your campaign.”

 Best used for: As the name implies, the only thing this attribution model is good for is to identify the last ad or link clicked before a sale was made. This isn’t particularly helpful in modern eCommerce, where multiple channels come into play in nearly every order.

Last Non-Direct Click

“This model shifts the credit to whatever ad campaign, organic click or paid action led to a conversion, excluding any that came direct. Direct is when someone types in your URL or it can happen when someone follows a link from outside the browser. It over values the previous non-direct click though, discounting whatever reason they came to your site directly. This can be useful for boosting sales by over-investing in effective ad campaigns but relying on it completely could lead to an over-reliance on paid content.”

 Best used for: If you are jumpstarting your eCommerce marketing efforts with a single, well-funded ad campaign, this attribution model could be useful in seeing how effective that ad campaign is. It will mainly help you distinguish traffic coming from that specific campaign versus direct traffic and organic traffic.

Last Ad Click

“In this model, all the credit goes to Ads, wherever they may be along the actual path to conversion. It’s a great way to make Google look great. It’s also a great way to analyze the effectiveness of your Ads campaign. If a certain ad is performing stronger than others, this model will make it look like a star. It pays no heed to organic search or direct traffic.”

 Best used for: If you want a good view on how Google Ads plays into your purchase funnel, the last ad click model can work well. It can also help you better understand how different ads in Google are performing.

First Interaction

“When tracking your customer’s sales story, why not start at the beginning? This is a great way to monitor the top of your funnel and figure out what hooks are most effective at sending your clients down the path to you. However, be careful not to discount the actual channel that created the conversion.”

 Best used for: The first interaction model is best used only when studying brand awareness — when you want to find out how people initially hear about your brand. It also gives you a full picture of the shape of the top of your funnel.

Time Decay

“The first multitouch model! This model doles out credits based on how long it takes for your customers to convert. Channels they saw five days ago that influenced them still get a little love, but not as much as the channel that immediately led to the conversion. It’s a pretty efficient model and a good starting point into this process. However, it tends to undervalue the first touch. If a strong ad hooked them in the beginning and got them thinking about you, this model may not give the credit it deserves.”

 Best used for: The time decay model is great for longer sales funnels. It gives you the long term view of the funnel while also placing importance on what finally made for that conversion. It’s multitouch, so it certainly has a place in modern eCommerce.

Position Based

“The Goldilocks model for e-commerce in our opinion. In the position-based model, 40% of the credit goes to both the first and last touch points, and then the remaining 20% is spread evenly among the rest of the journey. Does it have the potential to undervalue your mid-funnel touch points? Absolutely. However, that can be worth it to give proper credit to both the value from the first touch point and the efficiency of the closing touch point. This is the model that will be most effective for the vast majority of small to medium sized businesses. If you want a “set it and forget it” model, position-based is the way to go.”

 Best used for: As the ‘best of’ attribution model, you should consider plugging position based attribution in right away. Last Click may have had a place in yesteryear, but today eCommerce brands need a full picture of their ads and organic traffic to see how their audience is reaching them and converting. This is the way to do it.

How Paid and Organic Advertising Support Each Other

These disparate attribution models show us that paid and organic advertising are not at odds. By attributing sales to their source, you can see where paid is working, where organic is working and what needs to be improved.

“Depending on how you leverage each, your paid Facebook efforts can inform your organic, and your organic strategies can enhance your paid campaigns,” writes Jonathan Dane at AdWeek.

Of course, to leverage both paid and organic advertising efforts into something cohesive, you need to be able to make the data behind them as visible as possible. Visualized data on everything from your paid campaigns to your order size will give you the full picture of your marketing effectiveness by channel. This is also why choosing the right model for your business is so important.

“By changing your AdWords attribution model strategy from last-click conversion attribution to position-based attribution, you gain more insight into the customer journey, which allows you to see what top-of-funnel and mobile clicks are driving later conversions,” writes Nick Altmann at MetricTheory. “This data will help you channel your marketing funds into the campaigns that drive new customers, ultimately helping increase total conversions across your account.”

With the right attribution model in place, you can see how an initial search ad can work at the top of the funnel, ultimately leading to a conversion with an organic click at the bottom of the funnel.

Or the reverse could be true: someone finds your site due to your SEO efforts but ultimate pulls the trigger on a purchase once you retarget with a strategically placed banner ad on a third party site. You won’t know for sure until you set up your attribution model and see what is working for you.

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