What is time decay attribution?
Time decay attribution is a multi-touch marketing attribution model that gives most credit to campaign touchpoints closest to the conversion (a purchase or other desired activity).
Time decay attribution
Time decay attribution is a marketing attribution model that places most weight on the touchpoints closest to the conversion (like a purchase or sign-up).
What is time decay attribution?
Time decay attribution is a marketing attribution model where touchpoints closer to the conversion are given more credit than earlier ones. It’s a form of multi-touch attribution, but rather than crediting all touchpoints equally, it assumes that those closest to the time of purchase (or other desired activity) have more impact on the customer’s decision.
Think of time decay attribution like a road trip. The whole journey is exciting and part of the experience. But there’s something extra special, interesting, and unique about the last part of the road trip. The idea that your destination is right around the corner makes those last few miles the most memorable.
[image suggestion: visual representation of the time decay model through a timeline with multiple touchpoints?]
When to use time decay attribution
Time decay attribution works best when the customer journey is relatively long and has multiple touchpoints.
For example, if you’re selling enterprise software or high-end cars, your customers likely interact with various marketing channels over weeks or months before finally making a decision. Time decay attribution helps you understand which recent interactions pushed them to act, while still acknowledging the role of earlier touchpoints in nurturing the lead.
This model is also valuable for businesses looking to optimize their conversion funnel. By highlighting the impact of touchpoints close to the point of purchase, it can help marketers tweak their strategies for closing sales and guide budget allocation toward the most effective late-stage marketing efforts.
[image suggestion: customer journey]
Benefits of time decay attribution
The time decay model can be an effective strategy for companies when used properly. Let’s take a look at some of the benefits of this approach.
- Highlights influential interactions: The time decay model gives credit to crucial late-stage interactions that tip the scales in favor of a purchase. This can help marketers identify which closing strategies work best for their brand.
- Considers all touchpoints: By looking at the entire funnel, marketers can take a more holistic approach to understanding their campaigns. This provides a long-term perspective that you don’t get with single-touch models.
- Aligns with customer behaviors: This model reflects people’s natural tendency to be influenced by recent experiences, making it a good fit for many real-world scenarios.
- Best for optimizing conversions: By emphasizing recent touchpoints, time decay attribution is excellent for fine-tuning your conversion funnel and improving late-stage marketing efforts.
- Balances simplicity and sophistication: While more nuanced than basic models, time decay isn’t overly complicated to understand, making it accessible to many marketing teams.
- Integrates easily with other models: You can use the time decay model together with other data sources, such as a position-based model, to understand your campaigns even better.
Drawbacks of time decay attribution
Like most models and marketing techniques, there are also disadvantages to the time decay model. Consider the following before you decide if it’s right for you.
- Disregards the value of early interactions: By placing such a heavy emphasis on the end stages of campaigns, the time decay model may undervalue or underestimate important, early-stage interactions. These interactions are often critical in brand awareness and sparking initial interest.
- Oversimplifies complex customer behaviors: Not all customer journeys are the same or follow similar paths. In certain cases, this model may miss complex learning curves or customer experiences.
- Requires resources to define the parameters of the model: Setting up a time decay model involves decisions about the half-life and other parameters, which can be resource-intensive and may require ongoing adjustments.
- Doesn’t fully capture long-term brand building: Channels and touchpoints that contribute to brand awareness and loyalty over time may not get the credit they deserve in this model.
- May not suit all industries: For businesses with very short sales cycles or impulse-driven purchases, the time decay model might not provide significant insights over simpler attribution models.
Time decay attribution vs. other attribution models
Time decay is just one of a whole range of marketing attribution models. We’ve rounded up some of the most popular models and how they differ from time decay.
- First-touch attribution: Unlike time decay, first touch gives 100% of the credit to the first interaction, ignoring subsequent touchpoints. Time decay provides a more balanced view by considering all interactions, even if they aren’t all equal.
- Last-touch attribution: While last touch focuses solely on the final interaction before conversion, time decay considers the entire journey. It gives more weight to recent touchpoints but doesn’t completely disregard earlier ones.
- Linear attribution: Linear models distribute credit equally across all touchpoints. Time decay, in contrast, uses a weighted approach, reflecting the idea that not all interactions are equally influential.
- Data-driven attribution: Data-driven models use advanced algorithms to determine the impact of each touchpoint based on vast amounts of data. Time decay is simpler and based on a predefined logic, making it more accessible but potentially less accurate than data-driven approaches.
- Position-based (U-shaped or W-shaped) attribution: These models give more credit to specific touchpoints (the first and last ones for U-shaped, with an additional middle point for W). Time decay differs by continuously increasing the weight as touchpoints get closer to conversion.
Key takeaways
- Time decay attribution is a marketing attribution model that gives more credit to touchpoints closer to the conversion point. It assumes these late-stage interactions have the strongest impact on the customer’s decision.
- This model is best suited to businesses with longer sales cycles and multiple customer interactions.
- Time decay recognizes all touchpoints with an emphasis on recent, influential interactions, making it one of the more balanced models. It’s particularly useful for conversion optimization and understanding late-stage marketing effectiveness.
- While comprehensive, time decay may undervalue early-stage marketing efforts and brand-building activities which build awareness, consideration, and trust.
- Time decay offers a middle ground between simpler models and more complex data-driven approaches. It can also be combined with other models for a well-rounded view of marketing performance.
FAQs
Why use time decay attribution?
Time decay attribution provides a balanced view of the customer journey, recognizing all touchpoints while emphasizing the impact of recent interactions on the final decision to convert. This can help you refine your conversion funnel and optimize late-stage marketing activity.
Which types of business should use time decay attribution?
Time decay is most appropriate for businesses with longer sales cycles, such as B2B companies, luxury goods retailers, or industries where customers typically engage in extensive research before making a purchase decision. It’s also a useful model for businesses looking to optimize their conversion funnel.
What is an example of how time decay attribution can be applied?
In a car dealership, time decay might attribute more credit to a test drive or a final negotiation session than to an initial online ad view, while still acknowledging the role of that early interaction in starting the customer journey.
