Data Mining: The Heart of Analysis, Part 2

Now that it’s been a month since discussing how to push the needle in paid search via analysis, it’s time to consider what’s next. As you may recall, Part I mentioned that you should never look at paid search in a vacuum, and that the analysis becomes even more interesting when you examine the correlations between online and offline channels. Today, let’s dig even deeper and examine how paid search not only influences other channels, but is influenced by other marketing channels as well.

It’s every merchant’s and advertiser’s dream to have a prospect rush to become a customer after just one exposure to their product or service. Does that sound good? Well, keep dreaming. In reality, it typically takes multiple touch points via multiple marketing initiatives to reinforce a message and introduce an offering and brand to the marketplace.

Search Captures Demand

Given that, let’s think about search for a moment. Does search produce demand? I’d argue that it does not. Rather, search captures demand. How so? TV, radio, print, direct mail, e-mail, and other “push marketing” vehicles help create awareness for products and service so people will search for them. But that doesn’t mean you can’t be successful if you don’t do anything but search. This is because some awareness already exists for every product or service category, whether it is generated by you, your competitors, or simply by the needs of the end user. But if your objective is to build brand awareness, running a paid search campaign for a new or unknown brand without other marketing initiatives will not be successful.

The key is to understand what external factors are driving this demand because those are what influence the success of your paid search campaign at the next level. For example, do you see a spike in paid search demand immediately after you run a radio spot? Do you see a spike in traffic and conversions from the Northeast when your TV commercial airs in that region? Do you see a greater response rate when you’re also running banner ads in the major online publications pertinent to your business? You get the picture. At a bare minimum, you should be aware of your overall marketing calendar and all the initiatives in various channels, with their associated launch dates and intended reach.

Once you have an understanding of the various marketing initiatives in play, you should then analyze your search data to see if there is any lift in your metrics compared to your control group (established when no other initiatives were taking place). This can be performed fairly easily or as complicated as you like. The analysis can be more anecdotal by observing the timing of these various activities, or you can pull hourly data from each initiative and run various regression analyses to find concrete correlations.

The choice is yours, but either method is better than doing nothing. Ultimately, the findings of your analysis will help you make better-informed marketing decisions. For example, what if you stopped running radio because your market research showed no change in brand recognition (its objective), but then paid search saw a dip. Wouldn’t you want to know about the correlation before you turned it off?

Track Correlation Between Channels

In my opinion, it is critical to monitor this type of interaction between marketing initiatives. It’s like fueling the fire. If you want paid search to not only perform well in isolation, but also drive incremental search and conversions numbers, you need to stimulate your audience to look for your products and services online. And if you want to take it even further, leverage your competitors’ demand generation. When your competitors run TV ads, why not raise the prominence of your paid search ads in anticipation of an increase in demand? When they have specials on certain products, do the same, and so on.

But remember one thing: Whether you are trying to ride the wave of your promotions or your competitors’ promotions, try to synchronize the messaging so there is some consistency in the ads presented to the prospect. Obviously this is a lot of work, but the returns speak for themselves.

While examining the correlations between initiatives has its advantages, an interesting dilemma arises when you start thinking about all these marketing channels working together. Namely, who gets credit for the conversion? Some marketers credit the conversion to the last channel, while some look at the first. I suggest looking at all the channels that were involved in the conversion of the prospect to a customer. Obviously this requires excellent tracking capabilities and the creation and application of some business rules.

The simplest view would be to see overall marketing costs and the return on it as a whole. When looking at metrics channel by channel, you may want to allocate percentages of the conversion value to each channel that was involved in the conversion. But the percentage distribution does not necessarily need to be even; you may think the first had more to do with the conversion than the middle. While the decision is yours to make, it should make sense for your business.

Needless to say, all this analysis takes significant effort, and should not be undertaken until you have a solid foundation and have done everything you can with paid search by itself first. Then you’ll be ready. But believe me, this stuff is exciting and overwhelming at the same time. Ultimately, it will take a lot of coordination, communication, planning, and a ton of analysis, but it’ll be worth it. And in the end, the needle will move.

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