Time Decay Attribution Model

Time Decay Attribution Model Explained with Examples:

The time decay attribution model attributes more credit to touchpoints that are closer in time to the conversion event. It recognizes that interactions that occur closer to the conversion are often more influential in driving the user's decision. Let's explore this model using examples:

Example 1: E-commerce Purchase

Imagine a user's journey to purchasing a new smartphone:

1. They see a social media ad for the smartphone two weeks ago.
2. A week later, they receive an email newsletter with additional details.
3. A few days later, they click on a Google Ads search ad to visit the website.
4. Finally, they make the purchase.

In the time decay attribution model, more credit would be assigned to the touchpoints that occurred closer to the purchase—namely, the Google Ads search ad would receive the most credit, followed by the email newsletter and then the social media ad.

Example 2: Subscription Sign-Up

Consider a user's journey to signing up for a subscription service:

1. They come across a YouTube video review of the service a month ago.
2. A week later, they receive a retargeting display ad for the same service.
3. A few days later, they perform a Google search, click on an organic result, and sign up.

In the time decay model, the touchpoints that occurred closer to the sign-up would receive more credit. The Google search and retargeting display ad would receive higher credit than the YouTube video review due to their proximity to the conversion.

Example 3: Hotel Booking

Imagine a traveler planning a hotel booking:

1. They see a sponsored post on Instagram about a hotel deal two weeks ago.
2. A week later, they receive an email with special offers from the same hotel.
3. A few days later, they perform a Google search, click on an organic result, and book the hotel.

According to the time decay attribution model, the touchpoints that are closer to the booking would receive more credit. The organic search click and the email would be credited more than the Instagram sponsored post.

Advantages and Considerations:

Advantages:

• Reflects Real-World Behavior: Recognizes that interactions closer to the conversion are often more impactful.
• Focus on Immediacy: The model emphasizes the importance of recent touchpoints in influencing the user's decision.

Considerations:

• May Overlook Early Engagement: Early touchpoints might have played a crucial role in nurturing the user's interest but receive less credit in this model.
• Linear Decay: The model assumes a linear decay rate, which might not accurately reflect all user behaviors.

The time decay attribution model can be particularly useful for campaigns that aim to prompt immediate actions. However, it's important to select an attribution approach that aligns with your marketing goals and accurately represents the influence of various touchpoints on conversions.