October 17, 2017

What conversion model should I use?

Over the last 12 months I seem to be having this conversation on a more regular basis so the need to write about it seemed to be inevitable. The reason for the increase in discussion is simple, more people are understanding that a user does not just simply click and convert, they shop around, check out your competitors, research and will come to your site multiple times before actually converting. This means that the advertiser needs to change their strategy to ensure we are measuring throughout the consideration process as well, to maximise the overall ROI.

Despite these increasingly frequent conversations, I still hear companies saying, “We use Google Analytics last click as our source of truth”. Now unfortunately, this in itself is incorrect and a common misconception. Google analytics uses a native last non-direct click as its reporting model, not last click.  So, what does this mean exactly? Well it means exactly what’s in the title, the credit for the conversion is given to the last click that is not a direct click (someone going directly to your website). In this model, a direct traffic conversion will only be recorded if a user comes straight to your site and converts without going through any other channel in the last 30 days.

In the example below the user comes to the site 5 times before they convert through a direct click. In analytics, the credit for this conversion would go to organic as this was the last click before a direct click. The second example would be credited to paid and the third email.

Organic >> Paid >> Display >> Organic >> Direct

Paid >> Social >> Paid

Organic >> Organic >> Paid >> Social >> Direct >> Email

So, I ask the question, why is this the most accurate representation for the performance of your online marketing? It’s certainly the easiest, but if you are looking to grow or have a long lead time then it is probably not the most appropriate. Depending on what your business aims are this should dictate which model you use.

First Click

First click modelling gives all the credit for the conversion to the first click in the conversion path. As a standard, this is set to a 30-day conversion window, but can be adjusted up to 90 days or down to a single day depending on your business type and lead time.

This model is great for aggressive growth targets as you are focusing on users at the top of the purchase funnel and the channels that drive new traffic and brand awareness.

Last click (This is different to the native conversion modelling)

Last click conversion tracking gives all the credit to the channel at the end of the purchase cycle regardless of the other interactions. In general, for larger business you will find that a lot of conversions are attributed to direct implying that your brand is responsible for all the revenue.

This model is associated with conservative growth focussing only on the final engagement channels such as remarketing, brand and email. It capitalises on existing brand authority converting existing customers

Linear Attribution

Linear attribution credits the conversion evenly across all interactions through the conversion path.

This is the middle ground, it allows you to credit all the touch points, engage new customers while ensuring customers in the pipeline are converting, drive brand awareness but also capitalise on the existing brand presence.

Position based (Also known as U shape)

This model gives 40% of the credit to beginning and 40% the end of the funnel and then divides the rest evenly across all other interactions.

The model is great for growth while also allowing for the final channel to be credited for reengaging. It is not kind on nurturing channels such as social but if you are looking to sustainably grow it is the model to pick.

Time decay

This model assigns a cascading credit to clicks and gives the majority of credit to the last click leading to a conversion.

This model is skewed towards the last click and therefore is more associated with conservative growth. It does recognise that all interactions in the conversion path has value but deems the last channel to be of the greatest performance.

So, what is the best model for you? If you are looking for aggressive growth then first click is the charm, if you are looking for conservative growth and just maintaining your customer base then last click & last non-direct click is the way forward. If you would like somewhere in between one of the other models is for you depending on how aggressive you would like to be. If none of these are relevant you can build your own and create a custom view for this.

Whatever model you choose it should be a choice. Do not just use the native modelling because it’s there. In the long term, this is not be the best strategy to grow your business and you are likely to discount channels without really understanding how they impact your online performance.


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