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Maximise Returns With Mathematical Modelling & Attribution | Benchmark Search Conference 2016

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From Click Consult's Benchmark Search Conference 2016, Bridgewater Hall, 12th July. Presented by David Karellen, Click Consult - Maximise Returns With Mathematical Modelling & Attribution. #benchmarkconf2016

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Maximise Returns With Mathematical Modelling & Attribution | Benchmark Search Conference 2016

  1. 1. Maximise Returns with Mathematical Modelling & Attribution Dave Karellen Head of Paid Search www.click.co.uk david.karellen@click.co.uk
  2. 2. “Where best to allocate budget?” www.click.co.uk
  3. 3. PPC
  4. 4. “Where best to allocate budget?” www.click.co.uk
  5. 5. Diminishing Returns Graph Budget Revenue www.click.co.uk “Where is the point of diminishing returns?” Elastic Returns Diminishing Returns
  6. 6. Creating Your Diminishing Returns Graph www.click.co.uk Budget Revenue Logarithmic Line of Best Fit Use Excel to find your line of best fit
  7. 7. Channel Budget Revenue ROI SEO £1,000 £4,000 4.0 PPC £1,000 £3,000 3.0 www.click.co.uk Example Target ROI: 2.5 to 1 Budget Budget Budget£1000£1000£1000 Revenue Revenue Revenue SEO PPC Overlay £4000 £4000 £3000 £3000 “Which channel would you rather allocate an additional £2000 to?” “Now which channel would you rather allocate an additional £2000 to?”
  8. 8. Example (cont) www.click.co.uk Channel Old Budget Old Revenue Old ROI New Budget New Revenue New ROI Inc. Budget Inc. Revenue Inc. ROI SEO £1,000 £4,000 4 £3,000 £7,000 2.33 £2,000 £3,000 1.5 PPC £1,000 £3,000 3 £3,000 £8,000 2.67 £2,000 £5,000 2.5 Budget BudgetBudget Revenue Revenue Revenue £1000 £1000 £1000£3000 £3000 £3000 £3000 £3000 £4000 £4000 £8000 £8000 £7000£7000 SEO PPC Overlay Additional £3000 Revenue Additional £5000 Revenue
  9. 9. Transforming your Revenue vs Cost Graph into Profit vs Cost www.click.co.uk Budget Revenue Budget Profit It’s much easier to see the point of diminishing returns on the profit graph
  10. 10. Solver
  11. 11. Attribution Positional Models www.click.co.uk Last Interaction First Interaction Linear Time Decay Parabola Model You can also apply engagement based uplifts directly within Google Analytics
  12. 12. Referral Domain Sessions Conversions Assisted Conversions Referral 1 16 0 0 Referral 2 2 0 0 Referral 3 32 0 0 Referral 4 60 0 0 Referral 5 51 0 0 Referral 6 21 0 0 Referral 7 10 0 0 Referral 8 55 0 0 Referral 9 15 0 1 Referral 10 17 0 0 Referral 11 19 0 0 Referral 12 6 0 0 …………… … … … Low Volume Data Sets www.click.co.uk “With the data so diluted, how can you be sure which of these assisting referral domains is performing the best?”
  13. 13. www.click.co.uk Pass vs Drop PPC SEO Social Display Display SEO Email PASS PASS PASS PASS PASS PASS DROP In this case we count Email as a ‘drop’ for not leading to another interaction
  14. 14. Referral Domain Sessions Conversions Assisted Conversions Passes Pass Completion Rate Referral 1 16 0 0 3 19% Referral 2 2 0 0 1 50% Referral 3 32 0 0 28 88% Referral 4 60 0 0 49 82% Referral 5 51 0 0 17 33% Referral 6 21 0 0 21 100% Referral 7 10 0 0 6 60% Referral 8 55 0 0 27 49% Referral 9 15 0 1 4 27% Referral 10 17 0 0 13 76% Referral 11 19 0 0 18 95% Referral 12 6 0 0 3 50% Referral 13 34 0 0 7 21% Re-Examining Low Volume Data Sets Now it’s clear which channels are the best assisters www.click.co.uk
  15. 15. www.click.co.uk CONSIDERATION CONVERSION AWARENESS Assign value when a channel makes the pass between the three stages Awareness>Consideration>Conversion
  16. 16. With vs Without Analysis www.click.co.uk PPC SEO PPC SEOSocial +1% 2% Conversion Rate 3% Conversion Rate The presence of a Social channel in the path has increased conversion rate by 1 percentage point.
  17. 17. Example www.click.co.uk Maximising Last Click Channel Profit Channel Budget Last Click Channel Profit Attributed Profit Total Profit Channel A £7,000 £10,000 £7,600 £17,600 Channel B £2,000 £6,000 £6,500 £12,500 Channel C £10,000 £11,000 £4,800 £15,800 Totals £19,000 £27,000 £18,900 £45,900 Budget Profit Profit Profit Budget Budget£7000 £2000 £10,000 £10,000 £6000 £11,000 Channel A Channel B Channel C Maximising each silo individually leads to £45,900 total profit
  18. 18. Example (cont) www.click.co.uk Maximising Last Click Channel Profit Channel Budget Last Click Channel Profit Attributed Profit Total Profit Channel A £7,000 £10,000 £7,600 £17,600 Channel B £2,000 £6,000 £6,500 £12,500 Channel C £10,000 £11,000 £4,800 £15,800 Totals £19,000 £27,000 £18,900 £45,900 Maximising Total Profit Channel Budget Last Click Channel Profit Attributed Profit Total Profit Channel A £6,415 £9,664 £9,463 £19,126 Channel B £3,163 £5,240 £6,034 £11,274 Channel C £9,422 £10,638 £6,195 £16,833 Totals £19,000 £25,542 £21,692 £47,234 Attribution Rules • For every £1 spent on Channel A: Extra 50p profit for Channel B Extra 30p profit for Channel C • For every £1 spent on Channel B: Extra £1.80 profit for Channel A Extra £1.35 profit for Channel C • For every £1 spent on Channel C: Extra 40p profit for Channel A Extra 30p profit for Channel B Maximising based on the Attribution Rules leads to an extra £1334 total profit
  19. 19. Recap 1. Find out your profit vs cost graphs for each of your channels in isolation 2. Look at up-weighting high engagement channels alongside traditional attribution models 3. Review metrics such as ‘pass completion’ when final conversion data is diluted 4. Up-weight further any ‘passes’ that move visitors to different stages in Awareness>Consideration>Conversion funnel 5. Use with vs without analysis when data is significantly large 6. Combine your attribution rules with profit vs cost calculation for each channel in isolation in Excel 7. Maximise total profit after attribution rules are applied using Solver 8. Regularly review if your budget allocations actually are driving the expected bottom line profits 9. Adjust your attribution rules, and add more in where necessary www.click.co.uk
  20. 20. Thank You Dave Karellen Head of Paid Search Email david.karellen@click.co.uk Website www.click.co.uk Further info www.click.co.uk/blog/why-everybodys-doing-attribution-analysis-wrong Any Questions?

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