How to Accurately Measure ROAS: Contribution vs. Attribution Explained

Precision measuring of Return on Ad Spend (ROAS) is key in digital marketing for campaign optimization. One typical obstacle for marketers is grasping Contribution and Attribution, especially when evaluating ROAS via last- or first-click models. The models generate performance evaluation gaps that result in incorrect interpretation of results. In this comprehensive blog guide, we will learn the differences between contribution and attribution along with effective methods to improve decision-making outcomes.

What is Contribution?

The contribution is the total effect of a marketing campaign or channel on the success of a company or business. It measures the contribution of revenue generation, brand awareness, or customer engagement by a particular campaign or touch point. Unlike attribution, contribution looks at the larger picture by taking into account every interaction and influence propelling consumer behavior.

For example – A consumer could discover your brand first via a social media advert, interact with an email campaign, and last buy through a Google search. Each touch point facilitated the coalescence in this case.

What is Attribution?

It is the approach of assigning credit for conversions given to various marketing points across the customer path. It assists marketing professionals in knowing which campaigns or channels generate the most conversions. One may use several attribution frameworks, including

First-Click Attribution: Credits the first touchpoint that brought the customer to your website.

Last click Attribution: Credit the last contact (touchpoint) before the conversion.

Linear attribution: Gives the same credit level to every touch point.

Time-Decay Attribution: Touchpoints closer to conversion get more credits.

Position-based Attribution: 40% is assigned to the first and last touchpoints, with the other 20% spread across the middle contacts.

The Gaps Between Contribution and Attribution

The concept of the attribution model doesn’t capture the complete customer journey. As a result of this, it leads to gaps in understanding the overall campaign effectiveness. Check out the reasons to know why – 

First-Click Attribution Gaps: This approach deems first touches more essential and therefore overlooks the impact of nurturing initiatives. A user begins by selecting a social media advertisement yet completes their conversion on Google search while receiving multiple promotional communications through email. First-click attribution gives misleading credit to social media advertisements by itself.

Last-Click Attribution Gaps: This model assigns all the credit to the last touchpoint, therefore disregarding the previous interactions that shaped the customer to the purchase choice. Last-click attribution would credit Google search in the example above, therefore disregarding the part played by social media and email initiatives.

Over-Simplification: Both first-click and last-click models simplify complex customer journeys and therefore produce wrong ROAS estimates.

Real-World Example of Attribution Gaps

Suppose an online store advertises a fresh product to its audience.

• Social Media Ad: A Facebook ad is clicked by a user and the product page is visited but no buy is made.
• Email Campaign: After a few days, the users get a reminder email and click on it, but they still do not purchase.
• Google Search Ad: Finally seeking reviews and clicking on a paid Google Search Ad causes a shopping.

1. Here, First-Click Attribution would give Facebook the honor and ignore the efforts of email and search advertisements.
2. Last Click Attribution would consider only Google search efforts, ignoring first knowledge and nurturing campaigns.
3. However, Contribution Analysis would identify the effects of every channel on the consumer’s choice.

How to Bridge the Gaps

1. Adopt Multi-touch Attribution – Using multi-touch attribution helps you to see a return on ad spending more accurately since MTA models assign credit across all touch points. It looks at the total customer lifecycle to make sure no encounter goes undetected. Here the common MTA models are:

• Linear Attribution: Perfect for marketing efforts with continuous engagement on every medium.
• Position-based Attribution:  Helps in the identification of brand knowledge and closing techniques.
• Time-Decay Attribution: Effective for time-sensitive promotions where persuasion takes place with the recent interactions.

2. Use Data-Driven Attribution: Data-driven models available on Google Analytics and Facebook Attribution allow for a more accurate allocation of credit based on analysis of past data. With machine learning, these models can assess the effects of every touch point.

3. Leverage Incrementality Testing: Using incrementality testing helps one to assess a marketing campaign’s actual effects by contrasting conversions from exposed vs. groups.  It helps to differentiate actual revenue-driving sources from channels that only take credit for conversions that would have taken place regardless.

4. Focus on Contribution Analysis With contribution analysis paired with attribution data, marketers can get a complete picture of campaign efficacy. This refers to:

• Cross-Channel Analysis: Considering the interaction of various channels.
• Customer Journey Mapping: Analyzing the order of contacts that result in conversion helps.
• Revenue contribution metrics: Gauging the direct and indirect revenue effects of every campaign.

The Role of Advanced Analytics

Third-party platforms including HubSpot and Adobe Analytics and advanced analysis tools such Google Analytics 4 (GA4) provide strong attribution possibilities. They give through data points on user activity, cross-device tracking, and attribution models powered by artificial intelligence. Using these resources will enable marketers to have a clearer idea of how every touchpoint impacts total ROAS.

How Does It Matter for Campaign Optimization?

It is important to learn contribution vs attribution for optimizing ad spend and increasing the ROAS. This way marketers can gain more profit and deep insights of the campaigns – 

• Allocate Money More Wisely: Fund channels that help convert.
• Optimize campaigns: Identification of subpar touch points and improving customer experience.
• Better Decision-Making: Obtains precise knowledge of marketing influence and enables more intelligent strategic decisions.

How Kaliper Helps Clients in Bridging the Gap?

By closing the distance between contribution and attribution, Kaliper assists companies and businesses to precisely measure and improve their ROAS through advanced platforms and solutions. With advanced analytics and data-driven tactics, they deliver a thorough analysis of campaign results so every touch-point’s effect is appreciated. Clients can wisely allocate budgets, help clients make intelligent marketing choices, and increase overall campaign success thanks to their knowledge of multi-touch attribution and incrementality testing. 

Conclusion – In a nutshell, it can be concluded that In the fast-changing digital world, depending completely on first-click or last-click attribution is not enough anymore. Bridging the divides and making wise choices depends on marketers accepting multi-touch attribution, incrementality testing, and contribution analysis. This will enable them to realize the full possibilities of their campaigns and fully optimize their ROAS. With the correct tools for more precise performance measurement,  master the distinction between contribution and attribution and use it to boost your marketing plan.