Time Decay Attribution

Time Decay Attribution is a marketing attribution model that gives more credit to touchpoints closer to the conversion event. This model operates under the principle that interactions closer to the point of conversion have a greater impact on the final decision compared to those that occurred earlier in the customer journey.

Detailed Explanation

Time Decay Attribution helps in understanding the influence of various touchpoints over time and assigns greater value to the interactions that occur closer to the conversion. Here’s how it works:

• Principle: The model assumes that the value of touchpoints decreases as they move further from the conversion event. For example, if a user sees an ad and later interacts with an email before making a purchase, the email interaction receives more credit than the ad view.
• Application: This model is commonly used in scenarios where the decision-making process involves multiple steps and touchpoints. It helps in understanding which interactions had the most significant impact on the conversion, particularly when there is a clear sequence of events.
• Calculation: In Time Decay Attribution, the value assigned to each touchpoint is inversely proportional to the time elapsed since the interaction. For example, if there are three touchpoints with timestamps T1, T2, and T3 (where T1 is the earliest and T3 is the latest), T3 will receive the most credit, and T1 the least.

Key Points

• What it is: Time Decay Attribution is an attribution model that assigns more value to touchpoints that occur closer to the conversion event.
• Why it matters: It provides a more nuanced view of how different touchpoints contribute to conversions over time, especially in complex customer journeys with multiple interactions.
• How to use it: Marketers can use this model to better allocate marketing budgets, optimize campaigns, and understand the true impact of their various marketing channels by giving more weight to interactions closer to conversion.

Examples

1. Example 1: A customer first interacts with a brand through a social media ad, then visits the website through an organic search, and finally makes a purchase after receiving an email. In Time Decay Attribution, the email interaction would receive the most credit for the conversion.
2. Example 2: A user sees a display ad, clicks on a retargeting ad, and finally converts through a direct visit. The retargeting ad would receive more credit compared to the display ad.

Related Terms

• Attribution Model
• Conversion Attribution
• Multi-Touch Attribution
• Last-Touch Attribution