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How to use click path analysis to inform your Paid Search strategy

How to use click path analysis to inform your Paid Search strategy

By Larissa Green, Senior Search Analyst at I Spy Search Marketing

As media buying budgets become more accountable with all eyes on cost per conversion, the pressure is on to make every penny contribute to the ROI of paid search campaigns.

However, as the search landscape gets more competitive and CPCs are inflated year on year, the margins of paid search campaigns are getting tighter and profitable growth is harder to achieve. 

This, magnified by the current lack of trademark protection available on Google and resulting CPC increases, has resulted in a need for organisations to start embracing new ways of looking at their search data and user behaviour.

Traditionally, agencies and organisations base their search results on a ‘last click wins’ basis. This means that the last click a consumer makes always gets attributed to the sales revenue or conversion, regardless of how many other searches are made prior to this.

Therefore, brand terms appear hugely profitable and costly generic terms appear to offer an extremely low ROI, if at all. However, by looking at the buyer decision making process it is clear that consumers carry out research first with highly generic and costly search terms. When close to purchase, consumers will use highly specific, low cost keywords or brand terms to make their purchase.

This means that whilst expensive, generic keywords are playing a vital part in the research phase of a purchase, on paper they have low conversion rates and deliver a low ROI because they do not receive correct credit for the conversions.

With click path analysis, the whole consumer journey is revealed and the value of all clicks in the consumer journey can be rightly accredited.

Gone are the days when it was only the data analysts and number crunchers who could make sense of the unmanageable log data files. The new era of bid management tools makes it a realistic and painless process for search professionals to understand the consumer journey and justify increasing search budgets.

Now, every search manager can use the accessible data as a basis for their every day bid management. This will involve boosting bids on those generic keywords that appear at the beginning of the click path where CPCs would have previously been reduced.

1. Educate your client

Explain the benefits and value of all clicks before the conversion. Many may not even know this kind of data is available and that their competitors are beginning to use click path data as a means of justifying increasingly expensive generic keywords.

It can also go some way to explain how key players seem to be able to afford to appear for a large majority of impressions on expensive terms.

2. Install a bid management package to track up to at least the last five clicks

Several bid management tools now provide click path reports as part of their standard package or for an additional fee. Rates are competitive for tracking costs and are available from companies including (but not exclusive to) TD Searchware, DART and Double Click.

3. Establish a methodology for attributing click path conversions

Common standards of click path attribution have yet to be defined in any particular business sector. This presents a real opportunity for the agency and business to establish the best methodology which demonstrates the greatest ROI. This can then be used to grow the campaign and take vital steps towards becoming a major player in the marketplace. Common forms of attribution are:

- Equal: Assign equal proportions of revenue to each click in the path, ie, each keyword in the click path is assigned an equal proportion of revenue – from example below, both clicks in the path would get 50% of revenue.

- Cost of path: Take CPC of keywords and calculate the cost of the path. Attribute revenue on a % basis. This will be based on the cost of the click path. See example below article.

- Last click weighting: the final click gets a higher proportion of resulting revenue

4. Collect at least one month of data

One month of results is the least amount of data that should be used to provide a valid set of results to establish a pattern in search behaviour for your business or client. If the cookie window is longer than 30 days, extend the data set to this time period so any vital last clicks or conversions are not missed.

5. Collate results and analyse

Initially, use all sets of methodology from above to determine the most appropriate reporting approach for your business. Compare the results from all methods of click path attribution to discover your consumer conversion pattern and the costs involved for a typical click path.

This will dictate the best methodology for your business. For example, if consumers in a particular business sector typically use a long path of expensive generic keywords before converting, the cost of path methodology would be most appropriate.

This will mean that the high costs of the keywords will be justified according to their contribution to the click path.



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