So, what are allocation models in Google Ads?
- Last click attribution
- First click attribution
- Linear attribution
- Position-based attribution
- Time decay attribution
- Data-driven attribution
Why are allocation models in Google Ads important?
Engage with customers in the early stages of the buying journey.
It aligns with your needs and business characteristics
- Choosing the right allocation models in Google Ads that fits specific search behaviors and consumer journey models related to your business can significantly enhance the effectiveness of your advertising.
- If your customers tend to conduct extensive research before making a purchase, emphasizing early touchpoints, such as First Click or Linear allocation, may be beneficial.
- On the other hand, if your target audience typically makes quick purchase decisions after interacting with your ads, Last Click attribution or Time Decay allocation models may be more suitable.
Improves your bidding strategy
- Google Ads allocation models allow you to fine-tune your bidding strategy by providing detailed insights into the performance of ads across different touchpoints. With a better understanding of which interactions, ads, and keywords contribute most effectively to conversions.
- You can allocate your budget more efficiently by focusing bids on channels, keywords, or ad placements that yield the highest return on investment (ROI). Optimizing bids based on this data allows you to maximize the impact of your advertising budget and improve the overall profitability of your campaigns.
Types of allocation models in Google Ads
Last Click attribution model
Definition
- Also known as last-touch allocation models in Google Ads, this method assigns all conversions to the last touchpoint before the conversion event, simply put, the most recent ad interaction and its corresponding keyword will receive sole credit for the conversion, disregarding any previous interactions.
- And this is why brand campaigns often generate a high number of conversions compared to others. Because most users tend to search for the brand before making a conversion.
- The Last Click allocation model does not take into account the complexity of modern multi-touchpoint advertising strategies, where users are exposed to multiple different messages at different stages in their conversion journey.
- For example, if you’re running 5 separate Google Ads campaigns spanning across search, shopping, display, in case the user converts after interacting with a remarketing ad displaying an image, that specific campaign will receive full credit for the conversion, regardless of the contributions of other campaigns in the overall conversion path.
- This model does not consider the initial interaction of users with your brand originating from search focusing on generic product or service searches or searches for specific brand, none of these factors are considered, and the last touchpoint will receive the entire allocation for the conversion.
When to use Last Click attribution model
- Google Ads utilizes the Last Click attribution model for conversion actions, and if you haven’t modified this setting in your advertising account, you may be using the Last Click attribution model.
- Using the Last Click attribution model may be more suitable if your product or service is not related to long-term purchase decision-making processes. For fast-moving consumer brands, where purchase decisions are made relatively quickly, Last Click attribution may be the appropriate choice.
Advantages and disadvantages
- Advantages: simple, easy to set up, this model provides basic insights into channel performance.
- Disadvantages: It disregards all touchpoints except the last touchpoint. It can lead to a lack of comprehensive understanding of the customer journey as well as the contribution of other channels and campaigns to conversions.
First Click allocation model
Definition
- The First Click allocation models in Google Ads allocates all conversions to a single interaction, in this case, it only credits the initial ad interaction and disregards any subsequent interactions in the user’s journey.
- This means that even if a user interacts with 4 different ads and keywords after the initial interaction, only the first interaction is credited for the conversion. Both Last Click and First Click allocation models allocate conversion credit at a single touchpoint without considering any other touchpoints.
- However, in the case of the 4 remaining allocation models mentioned below, conversion credit is distributed across multiple touchpoints as users progress through their conversion journey.
When to use the First Click allocation model
- If your business prioritizes building brand awareness, you may opt for the First Click attribution model, which allocates all initial ad interactions to conversions.
- Using this model, you can recognize ad clicks as the starting point in the user’s journey leading to conversion. Thus, you can identify which keywords drive users to interact with your ads and which keywords support those interactions.
- This attribution model can be beneficial if you are in the early stages of deploying campaigns on Google Ads and need to enhance brand awareness for your business.
- However, it is essential to note that depending on the nature of your product or service, users may interact with multiple keywords and ads before converting. Therefore, the conversion data provided by this model may not always accurately reflect user behavior.
Advantages and disadvantages
- Advantages: Provides detailed information about the customer’s initial interaction with the brand, particularly valuable for businesses focusing on brand awareness and identifying effective campaigns to introduce the brand to users.
- Disadvantages: Excludes all touchpoints except the first touchpoint, potentially limiting insights into the customer journey similar to Last Click attribution.
Linear allocation model
Definition
When to use the Linear attribution model
Advantages and disadvantages
- Advantages: evenly distributes credit across all touchpoints in the customer journey, providing a more comprehensive understanding of performance.
- Disadvantages: Although slightly deeper than previous models and more balanced in credit allocation, the Linear allocation models in google ads may not accurately describe the impact of each touchpoint. For example, initial touchpoints may have lower intent compared to mid-funnel or final touchpoints.
Time-Decay attribution model
Definition
The Time-Decay allocation models in Google Ads assigns the highest credit to the touchpoint closest in time to the conversion, while those further away in time receive less credit for the conversion. This can lead to a direct impact on the ROAS target in Google Ads.
A notable feature of this model is the use of a 7-day decay period to distribute credit, implying that an interaction occurring on the 8th day before the conversion receives only half the credit contribution compared to an ad interaction occurring closer to the conversion.
When to use the Time-Decay allocation model
Advantages and disadvantages
- Advantages: Allocates significant credit to touchpoints closer to the conversion, providing deeper insights compared to the Last-Click attribution model and offering more accurate performance understanding by recognizing the value of previous touchpoints.
- Disadvantages: This model may entirely overlook initial touchpoints or inaccurately allocate the impact of previous touchpoints, resulting in an incomplete performance description.
Position-Based attribution model
The Position-Based allocation models in Google Ads primarily allocates contribution value to both the first and last touchpoints while still acknowledging the contribution of all other touchpoints.
By using this model, you can identify which campaigns or keywords initially attracted attention and which campaigns or keywords ultimately facilitated the conversion.
When to use the Position-Based allocation model
Advantages and Disadvantages
- Advantages: Recognizes the starting and ending touchpoints of the customer journey, acknowledging their importance in influencing conversions. This can enhance the conversion rate in Google Ads.
- Disadvantages: This model overlooks intermediate touchpoints in the customer journey. If users interact with 10 of your keywords before making a purchase, the model will not allocate any credit to 8 of the keywords in the middle.
The Data-Driven allocation models in Google Ads
Definition
When to use the Data-Driven allocationmodel
Advantages and disadvantages:
- Advantages: Utilizing machine learning technology to allocate credit based on the impact of interactions, leading to a more accurate depiction of customer journeys.
- Disadvantages: Heavy reliance on crucial data and accurate conversion tracking, hindering businesses with limited conversion or accounts with tracking issues when implementing this allocation models in google ads