CAN MEASURE RETURN ON AD SPEND WITH BETTER MODELING AND CONVERSION ATTRIBUTION
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1. winner-take-all2. even split3. increment lift
Media mix focuses on channels by week. Conversion attribution analyzes events by
to understand the value of individualad placements. Consider a multi-channel example:How much credit for the conversion should the knives' paid search ad, the display ad, and the natural search result get? It's atough problem, but not a new one. Banks and telcommunications companies addressed this issue 10 years ago with multi-touchcampaigns using automated phone callers, direct mail, bill inserts, out-bound call centers, in-bound call centers, and in-store orin-branch cross-selling. Marketers can apply three levels of sophistication to unravel the attribution problem:
is commonly used today and gives all the credit to the rst click, rst impression, last click or last impression. It'snice and simple, and doesn't require much data. Last century, Einstein advised us to "make things as simple as possible but notsimpler." So is winner-take-all too simple? Yes; we can do better and improve ROAS because winner-take-all tends to over-valuenatural and paid search brand keywords and under-value display ads.The
approach makes few assumptions and simply splits credit equally between all the ad placements involved in aconversion. In the example cited about chefs' knives, the "chefs knives" paid search ad gets 1/14th the credit, each of the 12display ads would get 1/14th, and the natural search result gets 1/14th. Credit doesn't change with temporal order since usingorder wouldn't be as simple as possible, and there's little evidence that temporal sequence matters.
A customer types in "chefs knives" at Google.com and clicks on a paid search ad. The customer browses the advertiser'swebsite for a while but doesn't buy anything
The customer sees a dozen display ads for the advertiser over the next week, nally clicks one, and browses awhile — butagain does not buy
The next day, the customer goes to Yahoo.com, enters the advertiser's name, clicks the top natural search result, andmakes a purchaseMarketers can use advanced media mix models to go a step further and nd the interactions between channels. TV ads, forexample, can directly affect search engine queries for an advertiser's brand name, increasing the volume of searches for aparticular term, and, in turn, increasing the paid search channel's cost. In fact, 60 percent of TV viewers now use the Internetwhile watching TV. Viewers can and do use Google and Bing
Advanced media mix modeling measuresboth the direct return on ad spend (ROAS) of such TV ads and the indirect ROAS of the additional paid search trafc.Internet advertisers can learn from media mix models since there are strong interactions between the Internet channelsthemselves; perhaps the strongest interaction is between display and paid search. Studies have shown that display ads canincrease brand name searches by 52 percent
and paid search conversion rates by 56 percent.
And display ads together withpaid search can increase online sales 50 percent and ofine sales 33 percent compared to paid search alone.
Although media mix modeling provides lessons on channel relationships, it fails to leverage one of the Internet's main competitiveadvantages: granular data. Conversion attribution relies on that wealth of data and moves the analysis from channels to individualad placements.
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Magid Abraham (2008) “The Off-Line Impact of Online Ads,”
Harvard Business Review
Demetrios Vakratsas and Tim Ambler (1999) "How advertising works: What do we really know?"
Journal of Marketing