SMX Advanced - June 2018 - Andreas Reiffen - Crealytics
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Presented at SMX Advanced (Seattle, June 2018), Crealytics founder Andreas Reiffen discusses whether retargeting always offers the right approach for marketers. References the limitations and challenges of measuring for incrementality via Google Analytics; and offers a more effective testing approach.
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SMX Advanced - June 2018 - Andreas Reiffen - Crealytics
- 1. #SMX #31c @AndreasReiffen Data Insights from Behind the Scenes Retargeting Incrementality, and beyond
- 2. #SMX #31c @AndreasReiffen About… • Data-driven online advertising strategist • E-Commerce retail expert • Entrepreneur • SaaS product and agency services for Google Shopping & Search • €3 billion in client revenues this year • 170 true experts in their field • Offices in NYC, London and Berlin … me … crealytics
- 3. #SMX #31c @AndreasReiffen Agenda Why common practice of retargeting is not necessarily the right approach. How to measure incrementality using Google Analytics. Limitations and challenges when applying this methodoligy. Introducing an advanced and more effective testing approach. Implications on the skill set of modern digital advertising teams.
- 4. #SMX #31c @AndreasReiffen Common practice is not necessarily the right approach
- 5. #SMX #31c @AndreasReiffen Finance: „Double ROAS within 8 months“ Campaign manager: „Easy“ ROAS target achieved MoM, Set by Finance Key Insight RLSA boosted traffic By Campaign Manager +102% 3 52 64 71 8 4 43% 37% 86 7 42% 5 50% 24% 19% 23% 19% 1 2 3 Retargeting website visitors helps to show great performance. It is a – well known and used – secret weapon we use to effortlessly reach targets. Does it help the overall business?
- 6. #SMX #31c @AndreasReiffen ROAS looks great but new customer rate halved. Is that what Finance has asked for? 531 18% 15% 14% 12% 18% 2 4 87 11% 6 12% 10% -48% Sharp drop in new customer rateNew customer rate, MoM With increased RLSA spend, new customer rate declines. Decreased new customer rate leads to missed out future revenue from repeat purchases.
- 7. #SMX #31c @AndreasReiffen Pre-RLSA Boost RLSA – bottom-line incremental impact or just an artifact as a result of wrong measurement? 17 2 Unpaid Paid RLSA 20 Paid Non-RLSA 1 Margins Post-RLSA Boost 14 17 4 42 2 23 Margins 20 Margins 100% RLSA incrementality0% RLSA incrementality What is incremental? How many people would have bought without seeing the retargeting ad? Which portion of my paid performance was non- paid before? How to apply data instead of gut feeling? M£ VS?
- 8. #SMX #31c @AndreasReiffen The better the numbers you see, the less incremental they might be! Test for yourself. Display prospecting Brand Designer PPC Generic PPC RLSA & remarketing Conversion rate Incrementality (+) (-) (-) (+) With our clients, we have observed a negative correlation of conversion rate and incrementality. Conversion rate
- 9. #SMX #31c @AndreasReiffen Today, it’s common practice to bid according to buying propensity and improve the overall ROAS Today’s unquestioned common practice Common sense tells us that with increasing recency and engagement, buying propensity increases. The higher the buying propensity the more likely people are to buy and the better the ROAS will look. The better the ROAS looks, the less incremental sales will be. Engagement Recency
- 10. #SMX #31c @AndreasReiffen A well-known retargeting company took this to an extreme - boosting bids in Google Shopping campaigns Engagement Recency RLSA Bid Modifier +413% CPC $5.8 CR 64.9% ROAS 28.0 Source:AdWords.Timerange: Q2 / 2017. Industry: Fashion Are the numbers just looking good or are they actually good?
- 11. #SMX #31c @AndreasReiffen A well-known retargeting company took this to an extreme - boosting bids in Google Shopping campaigns Engagement Recency RLSA Bid Modifier +301% CPC $4.9 CR 45.9% ROAS 24.0 Source:AdWords.Timerange: Q2 / 2017. Industry: Fashion Are the numbers just looking good or are they actually good?
- 12. #SMX #31c @AndreasReiffen A well-known retargeting company took this to an extreme - boosting bids in Google Shopping campaigns Engagement Recency RLSA Bid Modifier +184% CPC $4.1 CR 26.4% ROAS 17.0 Source:AdWords.Timerange: Q2 / 2017. Industry: Fashion Are the numbers just looking good or are they actually good?
- 13. #SMX #31c @AndreasReiffen A well-known retargeting company took this to an extreme - boosting bids in Google Shopping campaigns Engagement Recency RLSA Bid Modifier +99% CPC $2.8 CR 13.5% ROAS 12.0 Source:AdWords.Timerange: Q2 / 2017. Industry: Fashion Are the numbers just looking good or are they actually good?
- 14. #SMX #31c @AndreasReiffen Retargeting is highly addictive. Is there a way back? My boss will kill me if he finds out I wasted our budget. Director Performance Marketing Agency Less RLSA means we will lose a lot of money! Let‘s both keep quiet. Better-looking results mean higher PPC Budgets. Google $ $$ $
- 15. #SMX #31c @AndreasReiffen Bid higher with high buying propensity? Bid high where incrementality is likely to be high? Engagement Recency How can it be that even experts couldn‘t tell which of two opposite bidding strategies is superior! Engagement Recency $ $
- 16. #SMX #31c @AndreasReiffen Key take aways for target KPIs 1. Be skeptical about too good to be true results 2. Especially on simple metrics like ROAS while not taking into account new customer acquisition 3. The better your numbers look the less incremental they might be
- 17. #SMX #31c @AndreasReiffen How to measure incrementality using Google Analytics
- 18. #SMX #31c @AndreasReiffen Run an A/B test by following two groups of website visitors. Split your visitors in two groups Comment Show retargeting ads only to Test group Show ad Don‘t show ad A: Test group B: Control group Split your visitors evenly into two cohorts. Follow the cohorts over time to see if showing ads to the Test group increases conversions and revenue in comparison to the control group.
- 19. #SMX #31c @AndreasReiffen Example Setup for testing RLSA Incrementality uses Google Analytics and Google AdWords Set up audiences Export and collect users Activate in campaigns Measure results 1 2 3 4
- 20. #SMX #31c @AndreasReiffen Randomising website visitors as test and control group A B For two groups, assign 50 buckets eachIn GA, use condition User Bucket 1
- 21. #SMX #31c @AndreasReiffen From Analytics to AdWords 1 2 3 4 Start collecting users in AdWordsIn GA, finalize A/B audiences and export IncrementalityTest – Control group 2
- 22. #SMX #31c @AndreasReiffen Combine buckets with existing audiences for more granular tests ATest bucket B Control bucket Basket Abandoners A Basket Abandoners B Basket Abandoners Category PageVisitors Product PageVisitors Category PageVis. - A Category PageVis. - B Product PageVis. A Product PageVis. B Exported lists Existing audiences Bid Modifiers +100-90 +100-90 +100-90 +100-90
- 23. #SMX #31c @AndreasReiffen Challenges we encountered when testing high vs low funnel
- 24. #SMX #31c @AndreasReiffen We tested high funnel and low-funnel retargeting. At first glance, results were inconclusive. Natural fluctuations higher. AdWords revenue and audience boosts Analytics bucket revenue by case Low funnel Exclude Allow high-funnel Boost low funnel High funnel +138% +21% Boost low funnel Exclude Allow high- funnel +8% -2% Bid Modifiers -90 -90 -90 +-0 +-0 +90 -90 +-0 +90 Revenue challenge Uplift in AdWords audience revenue is only 1.4% of total Analytics revenue Solutions: • test all visitors • stronger boosts • longer test time frame
- 25. #SMX #31c @AndreasReiffen User number challenge: too many users who never had the chance to see AdWords retargeting Who was eligible to see retargeting? Use Analytics sequence to specifiy users Irrelevent users succesfully reduced All new users during test Possibly eligible 414,000 108,000 By excluding users not eligible to retargeting, the effect is less clouded, revealing results quicker. • Has seen the basket. • Not purchased in first session.Not eligible for retargeting Possibly eligible A vs B comparison now on reduced user set All users
- 26. #SMX #31c @AndreasReiffen After filtering, we see: Buying propensity and incrementality may indeed be antagonistic. 0 10 20 30 40 50 60 70 80 90 100 1.00.0 0.5 1.5 2.0 2.5 Conversion Rate High funnel Incrementality All retargeting Range of prediction still wide. Incrementality for all retargeting ranges between 9% and 34%. High funnel retargeting tends to have a higher incrementality and lower conversion rates. How can we get more precise?
- 27. #SMX #31c @AndreasReiffen Alternative: improved audience creation by event triggering, leading to smaller A/B test with clearer result VS Identify users visiting certain page, e.g. basket JavaScript randomiser Trigger Analytics event to build and follow audience Compare audiences and nothing else after having seen or not seen an ad Follow events in Analytics, i.e. A vs B is small and sharp. Better randomization of basket viewers into A vs B. By comparison, Analytics buckets may be unfair on smaller, specific sub-lists. Advantages
- 28. #SMX #31c @AndreasReiffen Change in target KPIs and organisation
- 29. #SMX #31c @AndreasReiffen Brace yourself for change Accept lower nominal ROAS numbers Consider better KPIs
- 30. #SMX #31c @AndreasReiffen There is nothing quite so useless as doing with great efficiency, something that should not be done at all – – Peter F. Drucker Team of mechanics • Optimising the numbers without questioning them • Tweaking keywords, ads, landing pages Mechanics supported by data scientists/analysts • Focus on measurability and data accuracy • Challenge target KPIs and budget allocation Run fast, drive efficiency Run into the right direction, be effective Data Scientists/Analysts
- 31. #SMX #31c @AndreasReiffen Share these #SMXInsights on your social channels! #SMXInsights Be skeptical about too good to be true results Constantly test incrementality and sense- check your attribution Run fast, but also into the right direction
- 32. #SMX #31c @AndreasReiffen Thank you! Subscribe to our blog blog.crealytics.com
Editor's Notes
- Set up random audiences using GA’s user bucket dimension Export GA audiences to AdWords and collect data for search eligibility Set up campaigns to reflect test design and activate Measure results with GA custom report
- User Buckets are a random number from 1-100 assigned to any visitor of your website User Bucket information is stored in the cookie, i.e. is persistent across sessions In the GA Audience Builder, go to Conditions Look for filter dimension *bucket* Set to desired group size – for two groups of the same size, choose: A: <=50, B: >50
- ‘Users over last 7 days’ will give you a first idea how large the list might become (1) Assign a name to the audience (2) and finalize the Audience Builder work by choosing a destination for the audience – in this case: AdWords (3) Once in AdWords, you will have to wait for the list to collect enough users to become eligible for search retargeting (4).
- To make sure test is administered while the control group is treated as usual Create combined lists of existing RLSA lists with each random list Control audiences inherit the existing bid modifiers Test Audiences’ bid modifiers are set to 0%
- Accept lower ROAS numbers Fewer conversions eligible for counting will mean lower ROAS figures. Remember it is just numbers. Nothing in your company’s overall performance has changed. Yet. Consider better KPIs To escape the vicious cycle of ROAS targets, consider more meaningful KPIs. More meaningful as in: ‘directly linked to business objectives’, like profit or CLV.