Identifying the Hidden Value of AdWords With Basic Attribution
This is part of our "5x5" series, in which we share five tips per week over the course of five weeks. We will share must-have tips about AdWords Editor, account optimization, ad-writing best practices, and much more. Make sure to explore the full series.
Back in 2009, at the A4U expo in Amsterdam, I remember sitting in on a packed main room session about how the affiliate channel wasn't getting enough credit for the value that we (the good ones) added. Back then, and still to a certain extent now, most channels (including the affiliate channel) are still compensated on a last click basis. What this means is that within the measurement suite that you're using, like Google Analytics, the conversion is attributed to the last place the click came from. As we all know, the conversion funnel is a lot more complicated than that.
I spend a large portion of my time with clients educating them on attribution. Many of the old school digital marketers are still stuck in the "last click" mentality. Up until a few years ago, this was acceptable because we didn't have the tools to know otherwise. Google has provided attribution tools for quite a few years now, so I think it's about time that everyone started moving towards an attribution based viewpoint of their analytics. Especially for AdWords.
We've all been there. We just KNOW that customers are finding our website by searching and clicking on an AdWords ad. But it's common for the user to shop around for the best deal. We all do it, so why should OUR site visitors be any different? After shopping around, the sensible user sleeps on it for a few days (or weeks!) and then decides to purchase from you. They type your website address into their browser address bar or they do a search for your company name and click on the organic search result and make the purchase. Herein lies the problem. Your analytics package, and usually the owner of the company, sees that the conversions from direct or organic are sky high and that more of the marketing budget should be directed there next quarter. But what about the AdWords click? Isn't there an argument to be made that the conversion wouldn't have happened without AdWords? Of course there is! Google provides two ways to consider attribution for your business and best of all, they're both completely free.
This week, I'll be discussing attribution, what it is and what role AdWords in particular plays in it. I'll be starting off with the basics and reporting inside AdWords itself, and moving on to attribution models in Google Analytics, including the holy grail of attribution models, the position based and data driven attribution models! So make sure you stay tuned!
So What is Attribution?
Attribution is essentially just giving credit where credit is due. Unless your business is built around impulse buying items, it's rare that a consumer will do a search and buy immediately. Most reasonable consumers will spend some time shopping around and depending on the size of the purchase, spend weeks considering the purchase and discussing it with their family or colleagues. If you've done a good enough job with your branding and your offer, many customers will come back to your website but in a lot of cases, not the way they originally found you. This is where attribution comes in. It allows you to assign a value, THAT YOU DECIDE to each step in the conversion funnel.
Before we go any further, there's a fundamental concept that needs to be understood. The most common question I get asked is "what is the best way to assign credit to each step?". Unfortunately, there's no universal answer to this. The way you assign value to each step (the model you use), is unique to every business. There really is no "one size fits all" model and the best way to assign value really is in the way that makes sense to your business. This means that understanding ALL the different ways that credit can be assigned is incredibly important as only when you understand them all can you make a decision on what's best for your business.
Attribution in AdWords
The best way to "get into" attribution is within AdWords itself. Google Analytics offers some fantastic and advanced attribution modelling tools but AdWords offers attribution tools that only relate to AdWords, built right into AdWords itself. By excluding all other channels except for AdWords, we can get a really simple introduction into the power of attribution.
AdWords attribution shows ONLY the conversions that AdWords had a role in. It’s ideal for beginners as it doesn’t muddy the waters with multiple channels, it just tells you if AdWords had a role in the conversion and if so, how much of a role it played. In case it wasn’t already obvious at this point, you really need to be tracking conversions in AdWords (or in GA and importing them into AdWords) to be able to use and benefit from these reports.
Where to Find Attribution Reports
As this is day 1 in the series, we’re going to start off easy and look at one of the more simple reports. This is also the report that I show our clients the most so it’s ideal to kick things off with.
To access the report, simply select “Attribution” in the tools menu, the “Attribution Modelling” in the side menu, set some parameters and select the “first click” attribution model.
In the above screenshot, what you’re looking at is a comparison of the conversions and conversion values when you dish out the credit in different ways. The left column shows conversions on a last click basis (how they appear in standard AdWords reports). The right column shows the conversions and conversion values if you assign credit to the conversion on a first click basis. The way I like to think of the latter is:
If we weren’t running AdWords ads, the customer probably would not have found us so let’s give credit to the method of advertising we used that the customer found us by first.
In the final column, you can see the difference expressed as a percentage. If you look at row 9, the “Attribution is amazing” campaign, you can see that while this campaign may not have had a lot of direct conversions (purchases immediately after the AdWords click), it INITIATED 187% more in sales than the standard AdWords reports show. In a perfectly simple world, we’d look at this campaign and likely assign it a lot more budget as it’s driving more sales than we initially thought. Of course, it’s not really that simple but for the purposes of day one, let’s leave it at that. This is the most basic of all attribution reports and it gives you a really good idea as to what campaigns are CONTRIBUTING to sale as opposed to what campaigns are merely the last ones that interacted with the customer before they purchased.
So before you pause, remove or even give up completely on a campaign because you think it’s not profitable, check this report as you might be killing off your goose that laid the golden egg!
Once you start to understand what role attribution has in your AdWords campaigns and once you’ve dug deep into your campaigns performance looking at them from a shared credit perspective, you’ll start to see that in general, AdWords plays a much bigger role in your marketing than you thought. In some cases you’ll see that some campaigns are not as profitable as you once thought they were too. This is a good thing. The more you understand how each of your campaigns interacts with the others, the smarter decisions you can make.
The next step for easier viewing of this data is to simply add the columns into your standard reports. Adding these columns will allow you to, at a glance, see how many conversions as well as the value of those conversions were generated by a particular campaign/Ad Group/Keyword that were NOT given credit in the normal conversion and conversion value columns. This allows you to see quickly how under or overvalued that particular campaign actually is.
If a campaign/Ad group/Keyword is generating ZERO conversions after spending $100 in your AdWords reports but is generating 1000s of conversions and millions of dollars in revenue in assisted conversions, you certainly don’t want to turn it off. I’ve seen so many businesses see massive drops in revenue after disabling “unprofitable” campaigns not understanding this concept. They think that they’re simply culling non-performers when in reality, they’re culling their best performers.
So that’s it for today, a flying visit to the most basic of attribution reports. We’re going to get a little more in-depth in the coming days so if you’d like to learn more, please check your attribution reports TODAY, feel free to ask any questions in the comments below and join me tomorrow as we delve deeper and explore the various other attribution models available inside AdWords.
Skydiving and travel obsessed. Director of digital marketing agency Redfly, based in Dublin, Ireland. An marketing agency that specializes in AdWords management, Google Analytics and Google Tag Manager.
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