It's natural to think about revenue-generating events such as sales, leads generated, or ads clicked on when we think about conversions. After all, that's the goal we're pursuing. However, in the complex world of the Web, we're shortchanging ourselves when we look at it this way.
There are many other types of valuable conversions, including:
- Newsletter signups
- Contact us request
- Downloads (white papers, software, other tools...)
- A view of a critical page
- Progress through the shopping cart that falls short of completing the sale
These are all valuable, because that person might come back at a later date and create a revenue-generating event. Of course, some people might think there's no need to track these types of conversions because you'll track the revenue-generating event when it happens.
This isn't sufficient. Here's why.
The Importance of Attribution
In your Web marketing efforts, you're probably engaged in paid search (PPC), organic SEO, or both. You, or your management, probably want to know the ROI on those efforts. Most likely, you'll look at the top-level view when engaging in those discussions.
One basic way to improve the results is to identify what parts of your Web marketing effort are bringing in the best results. Doing this well requires that you attribute credit for revenue to the things you did that helped make the event happen.
So for example, say that your campaign brings in traffic that leads to 100 people downloading a white paper on your site. Then perhaps five of those people come back later and create a revenue event for you.
Shouldn't the campaign (or in the case of PPC, the keyword) that led to the white paper downloads get some credit for that revenue event? Of course. There's a decent chance that the revenue event would never have occurred unless the person first engaged with that download on your site.
Of course, a completely different campaign may be responsible for enabling the user to come back. Perhaps they come in initially by clicking on a PPC ad, do the whitepaper download, and then come back via another search where they click on an organic search result for your site. Both keywords (paid and organic) are involved in the sale, and both should get credit.
How important is this? A 2007 Scan Alert study suggested that 37 percent of users took more than 12 hours from an initial visit to a Web site to the time when they bought a product on the e-commerce sites included in the study.
The Difficulty with Multi-Visit Tracking
It's not simple to track this in analytics. Sure, some packages can track up to seven different user visits and allow you to allocate revenue across all those visits, but these solutions rely on cookies to do their tracking. According to a 2007 comScore white paper, 31 percent of U.S. users delete their cookies at least once per month.
Tracking Alternate Conversions is Easy
Tracking alternate conversions lets you begin capturing the value that's generated by those initial campaigns and keywords. Next, you need to think about how to allocate the revenue to an alternate conversion.
In the white paper example, 5 percent of the downloaders eventually bought a product. If each revenue event that resulted was worth $100, then $500 in revenue was generated from the downloaders, or $5 per downloader.
Wrapping It Up
Exercise some care on the allocation side of things. If you assign a $5 value to each download, and then you also assign the full value of each transaction ($100 in our example) to the campaign that drives that, you're double-counting the credit. This can result in overspending on campaigns and losing money.
A simple strategy would be to set the value of the download transaction to $2.50, and credit only half of the revenue to the converting campaign. Is this the right balance? It's not easy to say.
Tuning this type of balance is essentially a method for deciding which part of the marketing mix you want to emphasize. Do you want to emphasize the up-front relationship development? Or the last conversion step?
Marketers have had to make those types of decisions since the dawn of civilization.
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