+3 votes
by (7.3k points)

2 Answers

+1 vote

I've seen a lot of companies logging all of their digital interactions of their marketing and then building their own LTV allocation models on top of those digital interactions.

They use various methods to do this allocation that will most align with their business. Types of multi touch models (MTA) will include:

  • Time decay
  • Uniform
  • First click
  • Linear
  • U-shaped

You can then use multi-bandit approach to iterate which MTA model produces the most cash flow for your business.

by (1.1k points)
+1 vote

Before getting into the details of the attribution model, it's important to take a step back and realize that when working with multiple acquisition channels, it's the incentives along with the attribution mechanism defined that ultimately determines the quality of users acquired.

Indeed, many a time, defining the attribution mechanism is the easy part. It's coming up with an "Incentive Compatible" attribution mechanism which is the tricky part. For example, regardless of the attribution model used - whether time decay, uniform, first/last click, linear or U-shaped, every single one of them can be gamed, albeit to varying degrees. The point being, the underlying problem isn't going away - say for example the ability to measure incrementality from advertising or weeding out ad fraud.

 

So, let's start with what advertisers are aiming to solve for in the first place - To identify the most effective channels and motivating those channels to do things right (no fraud, etc). Thus, the question really is about how one rewards the channel partners appropriately for acquiring users who achieve certain business KPIs?

1. The first step is being transparent. Let the channel partners know exactly what they must do to earn the reward (paycheck). Right 

2. The next step is to focus on the incentive structure. Specify the key objective you want from advertising – is it increasing frequency and reach or is it improving user retention or is it increasing engagements? 

3. Finally, when defining the incentives or deciding how payouts should be split, play around with different combinations of weightages and caps to see what best motivates your channel partners.

by (220 points)