Efficient Frontier Insights

Managing Events-driven Campaigns

How do you decide what to spend if your business is heavily driven by events? For instance, you may be a concert ticket advertiser planning for a major gig, or perhaps a sporting advertiser planning for the upcoming 6 Nations Championship (a major rugby tournament in Europe). Do you simply try to bid to as high a position as you can on your top keywords and hope that the impressions you gain will bring you sufficient conversions to make the spend worthwhile? But is it really worthwhile? How far will you be from your cost per order (CPO) goal? Will the average order value (AOV) be the same, lower or higher?

The challenge of events-driven campaigns

Events-driven advertising campaigns are challenging because:

(1) you know something is going to happen, but

(2) you are unsure the scale of the impact, therefore

(3) you are uncertain how to prepare for it, hence you implement the “spend and wait and see” strategy.

As a result, you may find your CPO fluctuates wildly indicating your budget had not been allocated in the most efficient manner (assuming constant AOV). The chart below illustrates such a situation. The red circles highlight the instances where events took place and the advertiser bid up to such a level that CPO was much higher than what it was worth. The green circles, on the other hand, highlight the occasions where no event took place and the advertiser pushed down the bids. As a result, the CPO was too low leaving demand to be exploited.




The myth of chasing impressions

The strategy many advertisers employ when managing event-based campaigns may simply be chasing the impression volume. When they can foresee there will be a rise in search interest they plan to spend more, by raising bids, to gain more clicks. However, we will argue that the value of a click is the key factor at play here instead. If the upcoming event only drives impressions but the conversion rate and the average order value (AOV) stay the same, then the revenue per click would remain unchanged and there is no value in raising spend. It is only when an event drives a change in conversion rate and/or AOV, where it is worthwhile to adjust bids to spend more.

So if we know the value of a click is the key, then how do we actually decide the budget on a given event-affected day? The answer is complimenting simulation with analogy adjustments.

As Will Senior, an Account Manager at Efficient Frontier, commented “to ensure you always pay the correct amount for each click, you need to accurately predict how upcoming events will impact click value. The easiest and most reliable method to predict a change in the click value is to use historical data from identical or lookalike events. The click value change could come in many forms, from a conversion rate shift to customer value adjustment.”

Best practice = simulation + analogous data

At Efficient Frontier we are proud of our sophisticated modelling and forecasting algorithms. We build click and revenue models on individual keywords and bid on them at the most efficient levels given the client’s business goal. Our platform’s simulations allow the advertiser to establish the spend level required to achieve the specific CPO or ROI goal based on historical data. When there are forthcoming events, whether a one-day sports event or the week leading up to a major music festival, we will also consider the previous similar (analogous) events and their conversion rates/AOV in relation to the average conversion rate/AOV. The latter ratio will provide us a conversion rate adjustment factor to build into the simulation that is automatically generated by our technology.

This could be illustrated by the graph below. Let us consider only CPO for now and assume constant AOV. The blue line illustrates what the simulation tells us for an average day about the relationship between spend and CPO of a campaign. When an event is to occur and similar past events suggest that there is a higher conversion rate than normal, the curve moves to the right (green line) so that we can increase the spend from just under $3,000 a day to over $4,500 and gain more conversions for the same CPO of $120.

 

This approach of combining simulation with analogous data gives the advertiser control in two ways for managing event-based campaigns.

First, the budget can be determined in advance and the advertiser simply sets the budget for each day of the coming week or month in the bid management platform rather than on the day.

Second, this reduces the daily variation in CPO from the target CPO. For our clients, on average, once this structured approach is implemented (from an intuition-based approach), the variation of CPO from target is reduced by 50%. The more similar historical events there are, the more you can refine your estimate of the adjustment factor used to build into the simulation.

Even if your current bid management platform does not readily provide simulations, using past similar events as reference to your forecasts for the upcoming event would still prepare you better than intuition alone does, as evidenced by academic research (e.g. Green and Armstrong (2007)).

Applying a more structured approach, your “spend and wait and see” strategy can be transformed into “analyze and anticipate”. You’re in control.

Dr Wing Lee, Business Analyst

Webinar: Making Facebook Marketing Work

Eager to learn how to provide value to your fans and real business results to your brand? Join our webinar to find out how to maximize your Facebook marketing efforts.

After years of chasing fans, it’s time marketers start driving real business results through Facebook. This requires building a Page that has a clear focus and offers value to customers, leveraging the entire Facebook tool kit and integrating social into your broader marketing strategy.

Join Efficient Frontier and featured guest Forrester Research Inc. as we discuss the findings in Forrester’s November 2011 report, “It’s Time to Make Facebook Marketing Work”, and provide you with specific next steps and concrete examples for successful Facebook marketing with tangible ROI.

SPEAKERS: 
Nate Elliott, Vice President and Principal Analyst, Interactive Marketing - Forrester
Marc Blinder, VP of Social, Europe - Context Optional, an Efficient Frontier company
Jon Beeston, Director of Marketing - Efficient Frontier

WHEN: 
Tuesday, December 13 at 9:00 A.M. PDT / 5:00 P.M. GMT

Register Here. (http://news.efrontier.com/Webinar-December2011_Registration.html)

 

Cross-channel attribution: Getting the right media mix

During and following a recent Efficient Frontier webinar I hosted there were a lot of relevant questions. Marketers are inevitably wrestling with the problem of attaining the optimal media mix. Understanding what each channel’s value is and the optimal mix for the goals at hand adds an extra layer of complexity for already busy marketers. The days of the “last-click wins” mentality and one-off online strategies have drawn to a close. Attribution analysis enables a more accurate understanding of what leads to conversions, and these insights can lead to dramatic improvements in ROI. I’ve summed up some of the pervasive themes of the webinar and common questions amongst the group of leaders of how Efficient Frontier can aid in their marketing decisions:

Q: Tell me what attribution is exactly.
A. Attribution is a heuristic method that quantifies the influence of all media channels on conversions.

Q: This is for DR (direct-response) only leads? What about brands?
A: Our attribution methodology applies to both DR as well as brand-focused advertisers. However, the key difference in our method is that it provides a way to measure as well as optimize to an advertiser’s goals. While it is true that brand marketers are not directly focused on revenue metrics they do care about reach and engagement metrics. Further, in every organization brand marketers are held accountable to the amount of business they generate. The key to proper attribution for brand marketers involves three steps:

1. Metric and objective selection, e.g. the goals you really care about. It could be total engagement on Facebook, or total website visits, or a combination of several metrics such as page views, engagements, email capture etc.
2. Finding the true value of these metrics in relation to the business or revenue they generate.
3. Applying attribution and optimization algorithms on top of these metrics.

Step 2 is tricky because the connection between online branding metrics and offline revenue generating activity is often tenuous, and the best one can typically do is apply econometric models. If this is not feasible then a blended metric can be created, which is a combination of each individual engagement metric.

Q: So it’s a click model? But most people don't click on display. It does not seem to measure advertising it seems more of a click response optimizer.
A: This is not a click model. This is a model + algorithmic approach that measures the effect of every measurable interaction in the user’s conversion path. In display, view through impressions can be measured and attribution can be applied to impressions. In the webinar, I mentioned that the key concept to attribution is to measure the jump in conditional probability of conversion (or another goal) over a preceding sequence of actions. This applies to display view-throughs, too. One can set up controlled experiments to measure the value of display impressions to understand their value in the conversion path. Efficient Frontier’s attribution platform can help advertisers attribute and optimize to display impressions too.

Q: What is the interaction?
A: In the webinar, I mentioned that channels are constantly interacting with each other and that effect has to be captured. Example: Let’s say that the search budget is $ 1 MN and display is $ 2 MN and that the conversion rate on search clicks is very high. As a result, you decide to shift the budget from display to search where search budgets are now $2 MN and display is $ 1 MN. This might cause the conversion rates on search clicks to drop more than you expect because the display impressions that helped the search clicks before are being served a lot less than before. The search and display channels are interacting all the time and this cross elasticity has to be captured in a good model.

Q: Does Efficient Frontier have tagging that works across social and display?
A: Social impressions can’t be tagged or tracked due to Facebook’s policy, but we can track social clicks and display impressions and clicks.

Q: Isn't Google Analytics "last click" attribution?
A: Yes, it is, but Google does provide first and last click reports. (http://www.google.com/ads/innovations/searchfunnels.html)

Q: What is the distribution of Efficient Frontier clients using each of the models?
A: We have a variety of advertisers using these models spanning, but not limited to: finance, auto, travel, retail and more.

Q: Does the idea of attribution models only apply to agencies that support multiple digital channels?
A. No, it also applies within one channel. An example: in search where non-branded keywords often help branded keywords.

Q: Does Efficient Frontier take into account each company's overall strategy into this experimentation?
A. Yes, and this can be challenging when doing the attribution. For instance, if the attribution suggests that the budgets need to be dramatically changed then it might not be feasible to do so as it can put the line of business at risk. In such a case the spend recommendations coming from the attribution should be used directionally. For instance, if search is more efficient than display and the media mix recommendation shows that search budgets need to increase by 25% one can start with a 5% increase and observe the overall performance. If performance improves then more budget can be shifted to search. Still, these approaches can be challenging as the effect of slow budget shifts can be hard to measure due to performance volatility, seasonality, marketplace changes etc.

Q: How much experimentation is needed to find optimal point?
A. Theoretically, the experiment is always on. Optimization requires constant experimentation because things are always changing.

Q: Does the Efficient Frontier attribution system take into accounts both converted traffic and non-converted traffic?
A. Yes, as long as non-converted traffic is captured via one or more metrics.

Q: Do advertisers need to rely on clicks? How does Efficient Frontier track impressions versus clicks across channel?
A. Only display impressions can be tracked. Social and search impressions cannot be tracked due to the reasons mentioned above.

Q: What are the technology hurdles that need to be overcome to achieve the vision? Where are the capability gaps today?
A. First the platforms such as Facebook need to allow advertisers to track view through impressions. Second, mathematically there is no method that can accurately predict performance for the entire media mix. The methods are only locally accurate in their predictions and this necessitates an experimentation exploitation approach. I believe that, ultimately, attribution is not the solution for media mix modeling because it does not capture the interaction between channels very well. Attribution is a more effective solution for ad and conversion optimization.

Q: What are the limitations of only tracking digital touch points and not offline media points? Are we just making digital even more siloed in its accountability? Are there any tools that track online and offline touch points together?
A. The limitations are that it is hard to directly measure the online to offline effect and vice versa. There are some tools that track offline phone calls but the best one can do for TV is use panel data. Apart from that, one can build econometric models, but using these is not a scalable solution because it requires a lot of human input and the quality of the model depends strongly on the person who built it. It is also a look back into a snapshot of time in the past and may not reflect the dynamic advertising environment looking forward.

Q: What impact do you think Google's move to secure searches by signed-in users will have on attribution modeling?
A. Little apart from paid searches because these can still be tracked. However, for organic searches some estimates say that up to 30% of traffic will not be accurately captured. I don’t think this is a big problem because not capturing the organic traffic has potential for misattributing the effect of organic searches. Advertisers have little immediate control over the position they show up for an organic search, so when it comes to media mix allocation little will change.

Q: How does Efficient Frontier track TV campaigns?
A. Efficient Frontier doesn’t, but we use indicator metrics provided by our advertisers such as spend, GRPS and TRPs to build econometric models.

Q: Is there a scalable solution that can track the display impressions in the cross channel tracking?
A. Efficient Frontier’s solution can track display impressions in cross-channel tracking.

Next Efficient Frontier Webinar: Tuesday, December 13, 2011 at 9 A.M. PST / 5 P.M. GMT
Making Facebook Marketing Work
How to Provide Value to Your Fans and Real Business Results to Your Brand

Join Efficient Frontier and featured guest Forrester Research Inc. as we discuss the findings in Forrester’s November 2011 report, “It’s Time to Make Facebook Marketing Work”, and provide you with specific next steps and concrete examples for successful Facebook marketing with tangible ROI.

 

Efficient Frontier and Context Optional launch program to assess ROI from social media campaigns

By: Christine Beury, Sr. Marketing Director

Efficient Frontier, a leader in digital marketing, and Context Optional, an Efficient Frontier company, have created the first fully comprehensive social media ROI program to assess the impact that branded social media campaigns have on revenue. The program seeks to ascertain where the real value lies in social media, focusing initially on Facebook and Twitter.

Efficient Frontier is recruiting brands to take part in the research program, to answer the following questions:

• How much revenue comes from Facebook fans or Twitter followers compared to non-fans?
• What fraction of revenue comes from click-out links on brand posts?
• The types of engagement that translate particularly well into revenue (for example, sweepstakes, polls, coupons)?
• Are Facebook fans and Twitter followers more likely to convert to sale than a non-fan?
• Does a FB fan buy with a higher order value?
• Does a FB fan have a higher purchase frequency?
• What is the value of FB fan engagement?
• Can Likes drive website traffic?
• Which are the sectors that do really well on Facebook?

Heading up the program is Efficient Frontier’s senior director of business analytics, Dr. Siddharth Shah. 

According to Dr. Shah, “Anecdotal and preliminary evidence shows that engagement levels between a brand and a Fan directly translates to revenue. But we want to work with large brands with a wide range of hard marketing data to prove whether this is the case or not, rather than relying on anecdotes or small samples. The EF platform with data integration to Context Optional’s Social Marketing Suite affords us the unique ability to capture and analyze end-to end marketing campaigns from all types of digital advertising through to social engagement and action. We are already working with brands today to show the value of social in their marketing campaigns, but we want to expand the reach of this program and its findings.”

To be a part of this Social ROI program, please contact Efficient Frontier at: http://news.efrontier.com/contactme.html

November 2011 CPCs: Finance CPCs drop while retail CPCs increase

CPCs in Finance dropped by 11.7% between October and November while they are 21% down YoY. Retail, on the other hand, is showing strength as CPCs are up 10% YoY. Automotive remains flat YoY. A preliminary look at spend numbers showed that click volumes are up YoY and is the primary driver of growth in spend this year versus last. Further, while the retail CPC trend looks promising, it remains to be seen if the momentum will continue for the rest of the holiday season. We will report on these trends once the data comes in.

Dr. Siddharth Shah
Sr. Director, Business Analytics

Mobile Matters: The Next Frontier for Advertisers

To start, I find it fitting to share the below quote from the recent Google ThinkMobile event.

“One of seven Google searches comes from mobile. Not serving ads on Mobile is like not doing business on a Thursday”
- JASON SPERO, GOOGLE HEAD OF MOBILE ADS, AMERICAS

Quite frankly, we couldn’t agree more with Mr. Spero. The proliferation of smartphones, tablets and other mobile devices is creating a paradigm shift in the way consumers not only research but interact and consume media. Recent Google internal data has shown that mobile queries have grown 4X since 2010, and by 2013 mobile queries will eclipse desktop searches. This provides an enormous incremental opportunity for performance marketers to capitalize on not only acquiring new prospects but putting their brand in the consideration set during the research cycle. The ability of consumers to access information at their fingertips and use this data to assist in the decision-making process has led to a new ideology of the Zero Moment of Truth (ZMOT).  The foundation of this principle marketing shift was created by Jim Lecinski of Google.  Marketers must embrace this philosophy and implement an integrated cross-channel strategy to ensure that their value proposition is consistent and engaging to capture the minds of consumers. As a starting point to help advertisers achieve success in the mobile search landscape, I’ve focused on a few key best practices that can help accelerate bottom line performance.

1. Mobilizing your site (smartphones)
This is often the most over-looked component of mobile and in many cases can take time, energy and resources, which are not readily available. 79% of marketers still do not have a mobile-optimized site experience (source Google), so many brands can still be first movers and take advantage of their competitors. It is even more imperative to prioritize mobilization upon Google’s recent announcement that mobile landing page relevancy now weighs site experience and can negatively impact QS - inflating CPC’s (cost per clicks) and losing placement on an already reduced SERP (search engine results page). A few best practices for your site are: simplifying navigation, considering HTML5, creating a seamless conversion process, keeping it simple and continuing to test and iterate.

2. Track Smartphones and Tablets Independently
A recent Efficient Frontier blog post provided some context on the behavior of device type and the ROI. Many marketers are already taking advantage of the flexibility to target and measure by device type within Google and Bing. This is a great step in the right direction, but there is one often-overlooked best practice that I will share. Not only does Google allow advertisers to target device type, but one can also select an operating system (e.g., Android, iOS). Although performance will differ by industry, I have found that there are large disparities of conversion rates between consumers transacting via an Android Smartphone vs. an iPhone. It would behoove performance marketers to embrace this level of targeting to not only optimize and allocate budgets more effectively, but ultimately provide better transparency to truly understand the type of consumer and identifying their behaviors across platforms.

3. Leveraging Time of Day Targeting (Day Parting)
One of the many challenges of mobile is securing the correct amount of investment to meet consumer demand knowing your ROI vs. desktop is undoubtedly lower. The chart from Google articulates that desktop usage peaks during work hours, with tablet and smartphone traffic leapfrogging in the evening hours. Many marketers likely do not allocate sufficient budget to capture a larger share of voice in the evening hours when these devices peak. To help alleviate the lack of PPC (pay per click) budget and increase mobile ROI, consider evaluating a day parting strategy for your mobile campaigns. Efficient Frontier can help assist with this type of custom analysis by reviewing ones transactional data by hour of day to help justify when one should have a presence in the marketplace.

4. Mobile is Local
Although many marketers have an online-only presence, I did want to quickly touch base on this key topic for those brick- and-mortar readers.  As many of us can attest, we are overly fixated on our wireless devices, and we continually interact on the go. 1 in 3 Google mobile queries has local intent, and a study by Kelsey Group has found that after a user looked up a local business on their smartphone 61% called and 59% visited in-store. Incorporating location-based products such as click-to-call location extensions, hyperlocal ads and seller ratings, is vital to assist in the conversion process. These resources will make it simple for in-market shoppers to reach your business and take action with the data supplied.

5. Test and Continually Iterate
Like any other channel, performance marketers need to determine what they are trying to achieve from mobile and their core KPI for measurement. Whether mobile campaigns serve to generate warm leads by submitting email addresses, registering for updates, clicking to call, or actually taking a user through a full application process for a completed acquisition, there is no common right or wrong solution. I encourage marketers to test these different acquisition strategies to determine what the ideal mix on the public mobile site is. Remember to not over clutter the initial page, but consider giving the consumer different social or direct response actions to ease the usage of your conversion process. Make sure to craft a media calendar for ad copy testing and leverage unique call-to-actions/special promotions; certainly don’t overlook implementing site links for additional real-estate. Performance based mobile campaigns must capture these users in the zero moment of truth and prevent them from exiting your site to research with a competitor.

There are many common challenges that performance marketers face in the world of mobile, but it is nonetheless an emerging trend that cannot be ignored. Efficient Frontier has been instrumental with implementing and putting many of these best practices to use for our existing clients to develop an initial footprint in this competitive landscape. If advertisers have had previously negative views of mobile I challenge them to revisit their assumptions. Recognizing social-cultural consumer behavior and accepting that usage across devices exists, but is not yet traceable, are two principles that will help drive continued growth in mobile performance marketing.

-Mike Fogarty, Senior Account Manager

New Case Study: Countrywide

UK client Countrywide started working with Efficient Frontier in 2010, to enhance the online proposition for a number of its brands, focusing mainly on Propertywide. Efficient Frontier’s brief was to manage and improve ROI from Propertywide’s multiple pay per click campaigns; and to improve account efficiency while increasing the volume of conversions.

Read the full case study here to see how Propertywide reduced cost per click by 55 percent and increased leads by 115 percent, all of which was achieved without changing the search budget. 

Merinda Peppard - Global Marketing Manager

Context Optional Chosen to Support Google+ Pages

Context Optional, an Efficient Frontier company, is one of the first to give brands the ability to manage their Google+ Pages. Part of the Social Marketing Suite, this new offering makes it easier for brands to manage their interactions with customers on Google+ and introduces an innovative dynamic Circle creation tool, +Circles.

 Learn more and jump start your brand on Google+ by getting the ‘Guide to Google+ Pages for Brands’ here:http://www.contextoptional.com/solutions/google-pages

October 2011 CPCs – Retail CPC up 21% Year on Year

While Finance and Automotive CPSs dropped 9%  and increased 6% YoY respectively, Retail CPCs were up 21% YoY in October. The rise in Retail CPCs hint at a strong retail season. We will keep you posted.

Dr. Siddharth Shah, Sr. Director, Business Analytics

Check Out Our New Data on Mobile Search Trends