Google Adwords Attribution – Introducing Effective Click Optimization

This blog post is in conjunction with the post How to do Attribution Modeling in Google Analytics – Ultimate Guide. If you have not already read this post then I would highly recommend you to read it.  It is a good starter guide to understand the various aspects of attribution modeling in Google Analytics (and beyond) and it will help you greatly in understanding the present post.  Today I will talk about how attribution modeling can be used to solve real life problems.

Say Good Bye to ‘last click keywords’ optimization and Welcome ‘Effective Click Keywords’ optimization

The advent of attribution modeling has fundamentally changed the way we look at the data for good. Up to now we have been managing PPC campaigns by bidding on last click keywords (keywords which completed the sales). This has to change because it is sub-optimal way of optimizing a campaign. To be most effective we also need to invest in keywords which initiate or assist in sales. Different keywords (first click keywords, middle click keywords and last click keywords) work together to create a sale. Yet we focus only on the last click keywords. Not good.

It is quite common for visitors to refine their search queries to get the product they are looking for and it is also quite common for them to return to a website via a branded keyword (as it is easy to remember) before making a purchase. Since by default, Google attributes conversions to the last clicks, branded keywords end up getting tons of undue credit for sales. Consequently branded keywords campaigns seem to perform so well in PPC. But these campaigns are still not producing optimum results because our whole optimization efforts are directed towards last click keywords and we now know, that different keywords work together to create a sale. So why single out only the last click keywords?

If you keep adding more of one unit of production to a productive process while keeping all others units constant, you will at some point produce lower per unit returns. This is known as the law of diminishing returns (which I have explained in great detail in the post: Thinking of investing more in a marketing channel? Think Twice.)

So in case of PPC, if you keep optimizing for last click keywords (in our case branded keywords) while ignoring first and middle clicks keywords (collectively known as assist keywords) you will at some point produce lower per unit returns. This means your cost per acquisition at some point will start rising and your profit on sales will start declining. Then the only way, to remain within your CPA targets is by tweaking (add, pause, delete, change bids) last click keywords. But this is sub optimal way of optimizing a PPC campaign as you are optimizing only a small part of the conversion process.

So what is the solution?

In order to strengthen your PPC campaigns you also need to bid on keywords that initiate or assist conversions.  In this way you can stay away from the point of diminishing returns and remain within your CPA targets much longer. To identify keywords to add to your paid search campaign, look for keywords in your multi channel funnel reports that are high performing conversion initiators or completers.   Follow the steps below:

Step-1: Go to Assisted Conversions Report, select your conversion type (I selected ecommerce transaction) and then click on the ‘Adwords’ tab.

Note: It is very important that you select the right conversions before analyzing multi channel funnel reports. In the present case i am optimizing keywords for transactions and not for user engagement. That is why i selected ecommerece transaction as conversions.

Step-2: Select ‘Adwords Keywords’ as primary dimension and then sort by ‘Assisted Conversion Value’ column to find high performing conversions assisting keywords.

Step-3: Compare all the high performing assisting keywords against the keywords you are currently bidding on in your PPC campaigns. Add the keywords which are missing, to your PPC campaigns and then bid on them.

Step-4: Now click on ‘First Interaction Analysis’ tab and then sort by ‘First click Conversion Value’ column to find high performing conversions initiator keywords.

Step-4: Compare all the high performing conversion initiator keywords against the keywords you are currently bidding on in your PPC campaigns.  Add the keywords which are missing, to your PPC campaigns and then bid on them.

Say Good Bye to ‘last click CPA optimization’ and Welcome ‘Effective Click CPA optimization’

Sorry to disappoint you but the CPA that you see in your Google Adwords report is not your actual cost per acquisition. It is the cost per last click conversion.  So if you ignore first and middle click keywords and optimize PPC campaigns on the basis of cost per last click conversions than you won’t get optimal results and sometimes even loose money. This is because if a keyword is not completing a sale, it may be initiating a sale or assisting a sale (Always Remember That) and if you stop bidding on it because its cost per last click conversion (the so called CPA reported by Google Adwords) is too high or it is not completing any conversion then you will loose money.

Similarly the conversions reported by Google on Adwords interface are last click conversions. So if you overlook the role of prior keywords in the conversion process then you are missing the big picture. I wish Google comes up with multi channel funnel reports like functionality in Adwords.  Till then you need to do lot of toggling between adwords and analytics reports to understand the true role played by your targeted keywords in the conversion process.

Please share your views on ‘effective click optimization’. If you like this post then you should subscribe to my blog and follow me on twitter.

Other Posts you may find useful:

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• How E-Commerce Tracking works in Google Analytics – Ultimate Guide
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• Is your conversion Rate Statistically Significant?
• How to optimize Organic Search Campaigns without Keyword Referral Data
• What is fundamentally wrong with your Conversion Rate
• You are doing Google Analytics all wrong. Here is why
• Google Analytics Shortcuts: Tricks, Tools, keyboard & APIs
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• Google Analytics Account Setup Checklist
• Event Tracking – Google Analytics (Simplified Version)