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All clicks are not equal in the case of varying campaign goals

Performance-based solutions such as retargeting have been on the rise across e-commerce marketers, driving up conversion volumes and ROIs greater than ever. However, in a market where businesses engage multiple retargeters and not just one, qualitatively measuring of results may get a little complicated.

In such cases, we tend to focus on how many clicks each provider generates – a potentially false metric, leading to poor decision-making and results that skew the truth. Therefore, the ability to determine which of your providers is actually best for a particular goal is a must for performance-oriented marketers today.

When it comes to online marketing, it is important to pre-empt your display campaigns by establishing goals.
• Short-term results like traffic volume: Retargeter should focus on the delivery of clicks
• Mid-term objectives like number of conversions: Retargeter tracks users with the highest conversion probability
• Long term goals such as conversion value: Retargeter identifies and segments the group of “big spenders”

There are plenty other examples, but you can already see how having a goal will diversify retargeting strategies, and consequently, yield results that have very little to do with just the “click”. By following the 3 steps below, you can easily evaluate and compare results that your personalized retargeting providers achieve, no matter what kind of goals you established. As with most businesses, the following steps will focus on the most popular goal – optimizing a campaign towards the number of overall conversions.

Step #1: Find the right tool to compare efficiency
Every tech provider will deliver statistics gathered during your campaign and your first step in getting the most from multiple retargeters is to find a way to measure the cost of each retargeting activity. Why?

Metrics shown by retargeters may simply not be directly comparable with each other because of such things like: differing definitions of conversions and lookback windows. You can measure results for each traffic source by using an analytical tool, where campaigns are presented with “flat” metrics (i.e. directly comparable). The most popular tool to do so is Google Analytics, but there are many others available on the market.

Once you have an analytical tool in place, you can easily calculate the average cost for a single conversion generated by each of the traffic sources and move forward in selecting the most effective retargeter.

Step #2: Choose the best way to attribute conversions
Upon gathering each retargeter’s results via your analytical tool, consider how to calculate the number of conversions that were generated via each traffic provider (i.e. attribute them). The goal is to understand how all of your marketing touchpoints work together and which of your dollars spent on different marketing activities work the hardest.

Imagine that a client visits your e-shop from a paid search, proceeds to view a red dress, but does not buy anything. One week later, she clicks on your banner ad, issued by one of your retargeters. The same day, she comes back a second time by clicking through your second retargeter ad, and a third time via one of your email campaigns. A few hours later, she visits the e-shop again directly and makes a purchase. Your average gross margin on a single purchase oscillates around $20 and you decided to invest $10 for each additionally generated conversion. Who is the reason behind each new sale and whom should you pay in the long-run in order to make your marketing investments successful? To access that, we take a look at the following measurements:
• Attribute the success to the last-click traffic provider (last-click model), which means that the direct channel will be credited 100 per cent of the conversion and in this case should get $10.

• Calculate it based on a user’s click-path history (linear model), with each touchpoint on the path attributed as a percentage of the total sum of the conversions generated. In our case there is 1 conversion generated by 4 traffic providers, so each of them gets exactly 25 per cent ($2.50) of the conversion generated.

• Post-click model (a.k.a: assisted conversion) in which the attribution of 1 user conversion would be added to 4 traffic providers and each of them will get $10.

Bearing in mind that there is no “optimal” model, marketers would need to know, in the case of a multiple retargeting approach, which method will help ensure that each conversion is only reported once and not pay four times for one successful conversion. In most cases, it is better to split marketing budget on last-click or linear attribution rather than post-click one in order to avoid overpaying in the long run, and keep marketing activities efficient.

Step #3: Test and modify
With your selected analytical tool and attribution model, it is time to test the retargeters and identify which one performs better for specific goals. By comparing different providers (using the same campaign criteria), you can see which one delivers higher results.

When conditions have been established, proceed to compare the effective conversion cost achieved by dividing the each retargeter’s invoiced cost of campaign by the number of conversions attributed (according to the previously selected model). You will then be able to optimize multiple retargeting activities by increasing the spending for the provider with lower effective cost, shifting budgets between traffic providers from the less towards the most effective ones. In doing so, you will ensure an optimal utilization of the providers’ capabilities and ideal use of your retargeting budget.

Remember: at the end of the day it is not about the specific model of payment. With various providers, you can easily pay for clicks, sales, and leads. However, to determine a particular campaign’s effectiveness, you need to measure the effective cost of conversion and compare your providers’ results directly by using analytics tools. Only this way will you have a chance to get the best possible results and insights.

Daniel Surmacz

Daniel Surmacz is the Chief Operating Officer at RTB House. He focuses on creating a long-term development strategy and working out key guidelines for foreign expansion of RTB House. He has been planning and coordinating all business activities since the company was founded.
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