Most companies have difficulty justifying the purchase of general top-of-the-funnel keywords such as “slippers” because typically, these types of terms don’t seem to convert—at least when measured by using the “last click” method, where all conversion credit is given to the ad clicked on immediately preceding the purchase. Add this to the fact that general terms are usually more expensive than branded terms like “LL Bean” or “Victoria’s Secret” and you’ll see why some marketers avoid them altogether.

So when marketers evaluate the performance of these non-branded keywords in their standard analytics package, they see only that they get a lot of clicks and that they’re spending a lot of money. But what they cannot measure is the value that these ads bring and the actual profit generated by them. In most analytics programs, these keywords actually look like they’re having a negative impact on sales and profits and are driving the cost per conversion up.

General Keywords Show Negative Profit

One of ClearSaleing’s customers, a successful internet retailer, faced a similar situation. Prior to working with ClearSaleing, they simply couldn’t justify the expense of these types of “introducer” or “influencer” terms. The analytics package they were using employed the last click method of attribution, which only gives credit to the last ad clicked (the “closer”) prior to conversion. By using the last click method, their analytics showed that only branded keywords, specific product names, and model numbers were having a positive impact on the bottom line, and that general keywords were showing a negative profit.

The first step ClearSaleing suggested was that the client move from a last click attribution model to one that gives credit to all of the ads involved in the Purchase PathTM. Once they moved to this “even allocation” model, ClearSaleing then had the customer segment their top 50 keywords into five different groups:

• Competitive terms
• Product names
• Brand terms
• Model numbers
• General terms

ClearSaleing Suggests Custom Attribution Settings

After they grouped the ads based on the above categories, ClearSaleing was then able to show its customer the impact of giving even credit to each ad in the Purchase Path, versus using a last click model and giving all of the credit to only the last ad in the Path.

By doing this, ClearSaleing’s client was able to see how profit levels for the general terms quickly moved from a negative to a positive return. They were also able to identify the amount of money that would be available to reinvest from branded keywords to future purchases of these profitable, general keywords.

ClearSaleing next calculated the number of additional visitors and clicks that the client would be able to purchase with their newfound profit generated from these general terms. By taking into consideration the keyword’s current conversion rate and the amount of money that the client realized in profits by using the “even with exclusions” method over the “last click” method of attribution, ClearSaleing’s client was able to accurately determine what the financial impact of buying more of these profitable, general keywords would be, allowing them to effectively purchase additional orders and generate more profit.

Armed with ClearSaleing’s attribution reports, the client was easily convinced that, when valued correctly, the purchase of the general terms did yield a significant profit and they invested more dollars into their general top-of-the-funnel terms (i.e. “introducers” and “influencers”).

ClearSaleing Attribution Model Leads to Increase in Ad Spend, Visitors and Profits

The results of implementing ClearSaleing’s advanced advertising analytics and attribution management platform were impressive. As a result of their advertising investment reallocation based on the true performance picture delivered by the ClearSaleing platform, the client was able to determine the real value and contribution, as measured by profit, of their general terms. Armed with this knowledge, ClearSaleing’s client expanded its investment from what was only previously 4 ad sources to now more than 18 sources. They also now enjoy a significant strategic advantage by purchasing general terms that competitors simply find too expensive when evaluated under a last click model.

Most important, however, is the fact that by using ClearSaleing’s attribution management software, the company was able to increase their number of visitors by 222% and increase their net profit by 131% over the course of a mere 24 months.

This entry was posted on Monday, August 17th, 2009 at 8:59 am and is filed under Case Studies. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.