Understanding low Attribution Rates

RetentionX's channel and campaign reports show the profitability of your new customers based on the marketing channel and campaign through which they were acquired. This gives you unique insight into the effectiveness of your marketing efforts and helps you optimize your marketing channel mix. To map the marketing journey of each order to your customers, we need your first-party marketing data.

In RetentionX, we provide you with the number of purchases tracked by your eCommerce platform, e.g. Shopify. In addition - after integrating with Google, Meta and TikTok - we provide you with the attribution rate for these channels and their campaigns, so you can understand how many of the conversions reported by these third-party platforms were also captured by your eCommerce platform.

The first-party tracking includes both UTM information and referrers to determine the source of the conversion. UTMs enable accurate tracking down to campaign and ad level. In the absence of UTMs, only browser data such as the referrer can be used to encrypt the channel from which the customer came (e.g. Facebook).

Let's explore how the attribution rate is calculated and why it's low.

What is the attribution rate?

Generally speaking, the attribution rate indicates the percentage of conversions reported by your marketing platform that were also captured by your first-party tracking.

Here’s the attribution rate formula:

Attribution Rate = Purchases / Conversions x 100

with:

• Purchases: Number of orders captured by your first-party tracking
• Conversions: Number of orders that were reported by the marketing platform, e.g. Meta

Attribution is always a hot topic and RetentionX is not trying to solve the attribution problem. Therefore, we are fully transparent about the differences in reporting and the basis of our analysis.

What is a good attribution rate?

You may be wondering what a good attribution rate is to feel confident about the quality of your first-party data tracking. First of all, your attribution rate will never be 100%.

There are several reasons for this:

• UTM parameters miss some purchases
  We are fully aware that UTM parameters don't provide a completely accurate conversion tracking, but they do allow you to track enough data to understand average customer behavior based on your marketing journey. Typical limitations occur due to device changes or users not accepting cookie consent.
  
  
• Marketing platforms overreport
  If you were to log into each marketing platform and add up the reported conversions, you'd probably end up with inflated numbers. This is because each platform independently claims credit for the conversion, regardless of when the touchpoint occurred. In RetentionX's marketing reports, purchases are attributed based on either first or last click.

However, after integrating with Google Analytics 4 and thus enhancing the marketing journeys, an attribution rate over 70% is expected.

Reasons for low attribution rates

Do you see low attribution rates in RetentionX? Let's look at the most common cases:

• No UTM parameter tracking
  Firstly, it's important that all your marketing campaigns are tracked using UTM parameters. If this is not the case, you can follow this UTM guide for step-by-step instructions.
  
  
• Missing historical UTM data
  If you have UTM parameter tracking enabled for all your campaigns, but it was only recently implemented, your attribution rate will be quite low depending on the time period you look at. If you are looking at all time data, but your UTM tag tracking was only implemented last year, then obviously a lot of purchases were not tracked - as UTM parameters by their nature cannot be tracked retrospectively. In this case, we'd recommend limiting the time period you're looking at, for example, to the last 12 months.
  
  
  
  
• Incomplete UTM mapping
  Once you've connected your Google, Meta and TikTok ad accounts, it's important to map all the UTM source and campaign tags you use or have used in your RetentionX integration settings. If you do not map all the tags, the number of purchases attributed to the source and campaigns will be lower.
  
  
  
  
• Different attribution models
  Some channels and campaigns are more successful top of the funnel than others bottom of the funnel. Because the conversions tracked by your marketing platform do not take into account when in the marketing journey the user interacted with the ad, the attribution rate for a TOF campaign based on last-click UTM data will be quite low, whereas it will be high based on first-click data.
  
  
  
• Click-through attribution
  Your first-party data is always click-based. So if you choose view-through attribution (VTA) in your Meta Ads settings, for example, the attribution rate in RetentionX would be quite low. View-through attribution credits conversions from campaigns that are impression-based, so Meta would attribute conversions to users who were exposed to the ad without actually clicking on it.
  
  
• Headless commerce
  If you've switched to a headless setup, your eCommerce platform will no longer be able to track the marketing journey of the orders and therefore cannot be imported by RetentionX. Especially for this setup it's important to connect your Google Analytics 4 account.

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