In this lesson we're going to discuss two important concepts used to measure the customer
journey --
conversions and conversion attribution.
One of the most important concepts in digital analytics is the idea of macro and micro conversions.
A macro conversion occurs when someone completes an action that's important to your business.
For example, if you're an ecommerce company,
the most important macro conversion is usually a transaction.
A micro conversion is also an important action,
but it does not immediately contribute to your bottom line.
It's usually an indicator that a user is moving towards a macro conversion.
It's important to measure micro conversions
because it helps you better understand where people are in on the journey to conversion.
Many times, when we talk about macro and micro conversions
we discuss the idea of attribution.
Simply put, attribution is assigning credit for a conversion.
We want to assign credit to our marketing channels
in order to understand the return on our marketing investment for each channel.
If we spend $100 on a marketing activity our hope is that we will generate more than $100
in revenue.
The most common type of attribution is called last click attribution.
Last click means that all of the value associated with the conversion
is assigned to the last marketing activity that generated the revenue.
The last marketing activity gets all the credit.
We've used last-click attribution for many years because it's the best measurement we've
had.
But we're now able to look at all of the marketing activities that helped generate each conversion.
This is important, because the reality is your customer will likely interact with you
many times before conversion occurs.
How do we understand the value of those other marketing channels prior to conversion?
We use the concept of an assist.
You see, attribution is a lot like scoring points in a basketball game.
It takes more than one player to make it happen.
One player scores the goal, but other players may help, or assist, in the process.
If you were coaching a basketball team,
you'd want to understand which of your players score the goals and which players assisted
in the scoring.
This helps you understand how your team works together to be more successful.
It's the same in online marketing.
If you think of the marketing channels as your players, some make assists and some score
goals.
To properly understand the value of each channel,
you need to know which role it's played in your customer's journey to conversion.
There are many different ways to assign value to channels.
Rather than assign all of the value to the last channel,
you might want to assign all of the value to the first channel
-- the one that started the user on the customer journey.
This is called first click attribution.
The reason you might do this is
to understand that the channel is a good channel for initiating conversions.
Or, you might assign a little bit of value to each of the assisting channels in the customer
journey.
In summary, the whole point of attribution is
to better understand the value of each marketing channel
and how multiple channels work together to drive conversions.
You can then use this knowledge
to better understand your customer's journey and allocate your online marketing budget accordingly.