Time-Weighted Multi-Touch Attribution and Channel Relevance in the Customer Journey to Online Purchase

Abstract

We address statistical issues in attributing revenue to marketing channels and inferring the importance of individual channels in customer journeys toward an online purchase. We describe the relevant data structures and introduce an example. We suggest an asymmetric bathtub shape as appropriate for time-weighted revenue attribution to the customer journey, provide an algorithm, and illustrate the method. We suggest a modification to this method when there is independent information available on the relative values of the channels. To infer channel importance, we employ sequential data analysis ideas and restrict to data which ends in a purchase. We propose metrics for source, intermediary, and destination channels based on two- and three-step transitions in fragments of the customer journey. We comment on the practicalities of formal hypothesis testing. We illustrate the ideas and computations using data from a major UK online retailer. Finally, we compare the revenue attributions suggested by the methods in this article with several common attribution methods.

AMS Subject Classification:

• 62L10
• 90B60

Keywords:

• Sequential analysis
• Metrics
• Clickstream
• Digital marketing
• E-commerce
• Path to conversion

Additional information

Funding

Part of this research was funded by Knowledge Transfer Partnership KTP007499, funded by Summit Media Ltd. and by the UK Technology Strategy Board.