What are the limitations of using last-click attribution for custom audience campaigns?

Using last-click attribution for custom audience campaigns has several limitations, especially in the context of modern digital marketing where customer journeys are often complex and multi-channel. Here are some key limitations:

1. **Ignores Previous Touchpoints**: Last-click attribution gives all the credit for a conversion to the last interaction a user had before converting. This ignores the potential influence of earlier touchpoints in the customer journey that may have contributed to awareness, consideration, or intent.

2. **Misleading ROI Calculation**: Last-click attribution can lead to misleading calculations of return on investment (ROI) because it may overvalue direct response campaigns (e.g., retargeting ads) that are often the last touchpoint before conversion. This undervalues the contribution of other campaigns or channels that assisted in driving the conversion.

3. **Underestimates Branding and Awareness Campaigns**: Campaigns aimed at building brand awareness or influencing consideration tend to be undervalued with last-click attribution. These campaigns may contribute to shaping a customer's decision-making process, even though they do not directly lead to immediate conversions.

4. **Complex Customer Journeys**: In today's digital landscape, customer journeys are often complex and involve multiple interactions across different channels and devices. Last-click attribution fails to account for these multi-touch interactions and may not provide an accurate representation of how different touchpoints contribute to the conversion path.

5. **Bias Towards Certain Channels or Campaign Types**: Last-click attribution tends to bias towards channels or campaign types that are typically the final step in the conversion funnel (e.g., branded search ads, retargeting ads). This bias can distort marketing strategy decisions and budget allocation.

6. **Customer Lifetime Value (LTV) Considerations**: Last-click attribution does not consider the long-term value of a customer (LTV) and may overlook the influence of campaigns that contribute to acquiring higher LTV customers over time.

7. **Limited Insights for Optimization**: By focusing solely on the last touchpoint, last-click attribution may provide limited insights for optimizing campaigns and improving overall marketing effectiveness. It may mask opportunities for refining targeting, messaging, or campaign sequencing.

To overcome these limitations, marketers often adopt more advanced attribution models such as multi-touch attribution, time decay models, or custom attribution rules that better reflect the complexity of customer journeys and the varied impacts of different marketing efforts on conversions from custom audience campaigns. These models provide a more holistic view of campaign performance and help optimize marketing strategies across the entire customer journey.