Daniel Surmacz
Daniel Surmacz 19 October 2016

When Goals Vary, All Clicks Are Not Equal

3 steps for evaluating the best results across retargeters.

Performance-based solutions are on the rise across e-commerce marketers, and retargeting tools are driving up conversion volumes and bigger ROIs than ever. But how are results actually measured? It is simple when you’re using one tech provider, but gets a little complicated when you implement multiple retargeting strategy. In such cases our judgment is often reduced to how many clicks every solution generates and this can be a false metric, leading to poor decision-making and results that skew the truth. So having the ability to determine which of your providers is actually best for a particular goal is a must for nowadays’ performance-oriented marketers, but how to do that?

When it comes to online marketing, it’s important to pre-empt your display campaigns by establishing goals. Are you after short-term results like traffic volume? If so, your retargeter should focus on the delivery of clicks. For mid-term objectives like number of conversions, you want your retargeter to follow users which have the highest conversion probability. When it comes to conversion value which is a long-term goal, the best option is to separate and target the group of “big spenders”.

There are plenty of other examples, but you can already see how having a goal will diversify retargeting strategies, and consequently, yield results that have very little to do with just the “click”. By following the three steps below, you can easily evaluate and compare results that your personalized retargeting providers achieve, no matter what kind of goals you’ve established. To simplify our story, we will focus on the most popular goal: optimizing a campaign towards the number of overall conversions.


#1 Find The Right Tool To Compare Efficiency

Every tech provider will deliver statistics gathered during your campaign and your first step in getting the most from multiple retargeters is to find a way to measure the cost of each retargeting activity. Why?

Metrics shown by retargeters may simply not be directly comparable with each other because of such things like: differing definitions of conversions or lookback windows, etc. Remember to always calculate results for each traffic source by using an analytical tool, where campaigns are presented with “flat” metrics (i.e. directly comparable). The most popular tool is Google Analytics, but there are many others available on the market.

Once you have an analytical tool set up, you can easily calculate the average cost for a single conversion generated by each of the traffic sources and move forward in selecting the most effective retargeter.

#2 Choose The Best Way To Attribute Conversions

When you are ready to gather each retargeter’s results via your analytical tool, you should consider how to calculate the number of conversions that were generated via each traffic provider (i.e. attribute them). The goal is to understand how all of your marketing touchpoints work together and which of your dollars spent on different marketing activities work the hardest.

Try to imagine that a client visits your e-shop from a paid search, proceeds to view a red dress, but doesn’t buy anything. One week later, she clicks on your banner ad, issued by one of your retargeters. The same day, she comes back a second time by clicking through your second retargeter ad, and a third time via one of your email campaigns. A few hours later, she visits the e-shop again directly and makes a purchase. Your average gross margin on a single purchase oscillates around $20 and you decided to invest $10 for each additionally generated conversion. But who is the reason behind each new sale and whom should you pay in the long-run in order to make your marketing investments successful? Let’s check the most popular ways to calculate it.

  • You can attribute the success to the last-click traffic provider (last-click model), which means that the direct channel will be credited 100% of the conversion and in this case should get $10.
  • You can calculate it based on a user’s click-path history (linear model), what means that each touchpoint on the path is attributed as a percentage of the total sum of the conversions generated. In our case there is 1 conversion generated by 4 traffic providers, so each of them gets exactly 25% of the conversion generated which means $2.5.
  • You can also use the post-click model (a.k.a.: assisted conversion) in which the attribution of 1 user conversion would actually be added to 4 traffic providers and each of them will get $10.

Keep in mind there is no “optimal” model. However, in case of multiple retargeting approach you need to remember about choosing such a way which will help you to be sure that each conversion is reported only once and you don’t need to pay four times for 1 success. At the end of the day it will then be more clear what to do in order to improve your overall effectiveness. So in most cases, if you don’t want to overpay in the long-run and keep marketing activities efficient, it is better to split marketing budget on last-click or linear attribution rather than post-click one.

#3 Test And Modify

With your analytical tool selected and the attribution model ready to roll, now is a time to test retargeters and check which one performs better for specific goals. Remember that only by testing different providers (using the same campaign criteria) you can see which one delivers higher results.

When conditions have been established, next step is comparing the effective conversion cost achieved by each of the retargeters, simply meaning the invoiced cost of campaign divided by the number of conversions attributed (according to the previously selected model). Finally comes the optimization of multiple retargeting activities. The rules of this part are as follows: increase the spending for the provider with lower effective cost until the effective cost is even for all providers. So it is not about splitting your overall budget evenly between traffic sources, but shifting it between traffic providers from the less towards the most effective ones. This way you will ensure an optimal utilization of the providers’ capabilities and ideal use of your retargeting budget.

Remember: at the end of the day it is not about the specific model of payment. With various providers you can pay for clicks, for sales, for leads etc., but to determine a particular campaign's effectiveness, you need to measure the effective cost of conversion and compare your providers results directly by using analytics tools. Only this way you will have a chance to get the best possible results. 

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