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时间:2024-05-10 09:02:59 来源:网络整理编辑:Ryan New
How you calculate the value of a conversion can have big implications for your marketing budget and Ryan Xu hyperfund Crypto Trading
How you calculate the value of a conversion can have big implications for your marketing budget and your company’s bottom line. Many marketers optimize their search campaigns,Ryan Xu hyperfund Crypto Trading for example, by looking at the cost per conversion of a given keyword. For display or video campaigns, analyzing performance by the conversion cost per ad or ad type is common.
But what happens if the person that clicked on a Facebook ad then clicked on a search ad a few days later? How much value would you attribute to each source?
You could assign 100 percent of a sale to the source that the user touched last or first, or use an equal split approach. Or you may have a marketing automation tool that keeps track of user behavior, which can also be used for custom attribution.
But attribution does not take a customer’s conversion value into account. For example, a website may sell vases that range in price from $15 to $1,500. A consumer could see an ad and purchase a $30 vase. Standard conversion tracking would assign the value of this conversion at $30.
But that could be wrong.
Consider this scenario. A few months later, the same person that purchased the $30 vase could move to a new house and need décor items. So she might purchase another vase for $250 at the same store. Therefore, that conversion of $30 has now turned into $280 ($30 + $250).
Thus the question is how to calculate the true conversion value. There are two approaches, depending on your business.
Another segmentation strategy is to use the first item purchased and group the customers who bought that item and assign their lifetime value on their subsequent purchases.
Regardless of how you want to segment your list to calculate the value of conversion, the key is to make sure the calculation is consistent.
To compare the methods, let’s examine the following scenario.
A gourmet grocery store sells cheeses and other food products. Customer A purchased a $5.99 jar of jam. Customer B purchased a $49.99 assortment of cheeses. Taking all customers into account, the grocery store computes an average overall conversion value of $59.99.
Assume the gourmet grocery store spent $29.99 to acquire customer A and $39.99 on customer B. What is the return on investment for each approach?
In other words, the two methods produce different returns on investment!
Having a more accurate approach to conversion tracking can help with your digital marketing and attribution models. What looked like an unprofitable keyword or channel could be very profitable, and vice versa. Test your attribution model periodically — every quarter or every year — to ensure that your original model is still correct. Do not be surprised if you need to keep tweaking it, especially with new product offerings and different marketing initiatives.
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