All digital marketing strategies share the common goal of increasing conversions. Conversions come in many different sizes and colors. Whether it be to sell a product, download an app, submit an RFP form or book a hotel online, the higher your conversion rate is, the more successful your campaign becomes. However, when it comes to understanding your “conversion path” most digital marketers focus on last-click attributed conversions (e.g., a sale, form completion or hotel reservation) to evaluate the success or failure of their campaign and their Return on Advertising Spend (ROAS).
The reality is quite different though. There are many required touch points before a prospective customer commits to making a purchase, filling out a form booking your hotel online. This article describes the importance of measuring non-converting actions, conversion paths and attribution models as well as other related conversion metrics.
Understanding the Buyer’s Journey
Google has a great tool that illustrates the Top Conversion Paths and helps marketers identify the most critical referral channels and the number of interactions that occur with each of them before completing a purchase. If nothing else, it really shows how complex the conversion journey can be in so many cases.
If you’re a sports fan, let’s say Football in the US, you’re already used to reading or seeing games highlights “attributing” a touchdown to a wide receiver or a running back. However, the quarterback had also contributed to the touchdown with a 40 yard pass; prior to that, the same team’s running back had contributed to keeping possession by converting on a “third and long” attempt. And before that, the team’s defense had intercepted a pass from the opponent’s team quarterback to gain back the possession that ended up with a touchdown.
Based on the above, we all understand that giving ALL the credit for the touchdown to the wide receiver does NOT give us a clear picture of the entire conversion path. More important, if we decide to put all of our team’s budget on our “last click” converter (the wide receiver) we will soon realize that without a quarterback or the rest of the team for that matter, our star wide receiver is very much useless (and our budget equally wasted).
In the consumer buying journey, a similar multi-touch model is common place. Touch points with a brand can include social, paid search advertising, banner ad placements, organic search, email, referral and direct visits, billboards, TV commercials, just to name a few.
When you consider that these interactions can also happen across different devices (mobile phone, personal computer, office computer or tablet, or offline), it becomes clear that measuring engagement beyond last-click conversion is critical to get the most out of your digital marketing campaign.
The Challenge of Measuring Attribution
Conversion attribution is the element that connects all of the touch points along the buying journey. It also attempts (notice the word “attempts” since it is not perfect) to measure how each touch point impacts the ultimate buyer’s decision to purchase. To that end, there are several different attribution models and ways to measure actions across devices to consider over a set time frame, but no matter which one you choose, you must keep in mind that it is not going to be 100% accurate.
The main purpose of the various attribution models is to give marketers more information and control over how much credit each campaign, ad group, or ad gets for your conversions.
- Reach customers earlier in the purchase cycle: Find opportunities to influence customers earlier on their path to conversion.
- Match to your business:Use a model that works best for how people search for what you offer.
- Improve your bidding:Optimize your bids based on a better understanding of how your ads perform.
This is part of the reason why most digital marketing agencies choose an easier path and instead focus so heavily on last-click conversion measurement — it’s the easiest to track. But the reality is that each digital channel and each interaction has a role in the decision to purchase — they are interrelated and interdependent.
Attribution Models (Google’s Description)
As explained above, attribution models let you choose how much credit each click gets for your conversions. You can attribute the credit to the customer’s first click, last click, or a combination of multiple clicks.
Attribution models can give you a better understanding of how your ads perform and can help you optimize across the user’s conversion path. Google AdWords offers several attribution models:
Last click: Gives all credit for the conversion to the last-clicked ad and corresponding keyword.
When using the last click model, you might notice a slight time lag between what’s reported in the “Conversions (current model)” column and the “Conversions” column for recent time periods. This lag eventually corrects itself.
First click: Gives all credit for the conversion to the first-clicked ad and corresponding keyword.
Linear: Distributes the credit for the conversion equally across all clicks on the path.
Time decay: Gives more credit to clicks that happened closer in time to the conversion. Credit is distributed using a 7-day half-life. In other words, a click 8 days before a conversion gets half as much credit as a click 1 day before a conversion.
Position-based: Gives 40% of credit to both the first- and last-clicked ads and corresponding keyword, with the remaining 20% spread out across the other clicks on the path.
Data-driven: Distributes credit for the conversion based on past data for this conversion action. (This is only available to accounts with enough data.)
While the easiest performance metric in digital marketing may be the last-click conversion, it is important to consider how all steps contribute to that last action. Each interaction makes a direct contribution to a buyer’s journey and decision-making process.
Depending on the channel mix, the KPIs of measurement will be unique to the business and goals. Here are a few examples of non-conversion metrics that we typically look at among many others:
- Visitors. Track both new and returning visitors to the website. While a net new audience is important to long-term success, people returning to continue to educate themselves about the brand, products and services is also very positive.
- Traffic by channel. Measure volume of traffic by channel and their trends over time. Are the sources more diverse? Is the traffic by source acceptable based on the digital strategy in place?
- View through conversions. This is an especially important metric for retargeting programs. It allows marketers to understand how the retargeting program is assisting with conversions.
- Ad spend and branded searches. What is the correlation between total ad spend and direct/organic traffic from branded searches? Is it leading to return visits to the brand’s website? This metric indicates if your advertising investment is impacting brand awareness and interest.
Digital marketing involves a series of opportunities to engage prospective customers; focus on your buyer’s entire journey, not just their final destination.
Thank you for reading. Until next time, this is Manuel Gil del Real (MGR)
Photo by Nick Fewings on Unsplash
Sources: Google.com, Marketing Land