Online Advertising Effectiveness? Tell Me About It! Part 1

Well, I got some positive feedback on the last Webtrends article so I figured I would toss in another. I don't want to sound like a shill for WebTrends, but I don't know how you manage a web business without detailed log analysis. WebTrends is not nearly as good as the system I used for the CBS/SportsLine "points for page views" loyalty program, but then again, not many of you probably need something with that much horsepower. Or do you? Let me know... Take my current little pet peeve - I'm getting ripped off on advertising, it would seem. Or am I? Oh, not on the response rate side, I get great response rates with Google AdWords and GoTo. I'm talking about the quality of the visitors generated. It seems that visitors coming from my ads might be of a lower quality than free visitors coming directly through the search engines. Check out this little chart, all based on visitor sessions:

Hmmm, he said. Not much to make a decision on here, but the differences are striking enough to warrant further investigation I'd say. The page viewing activity seems to indicate the ad-driven visitors are of higher quality (lower one page visits, higher percentage of high activity users) but the "engagement behavior" of the search-driven visitors (downloading, bookmarking, subscribing) is far more valuable, as these visitors are most likely to turn into book buyers. What's really going on here? Why should I pay for ads if the "free" search visitors are of higher quality. Huh? Huh? We'll "drill down" another level next month and see. Because I'm a Drilling Down kind of guy, I took these numbers down to the next level. I wanted to see if there was variation by the search phrase used, not just an average of all search phrases. So I took my top 3 search terms (relationship marketing, customer retention, customer loyalty) and did a similar break out. The following is a chart of visitor behavior for the 3 search terms above, broken out by whether they clicked on an ad displayed in response to the search term or clicked on the search engine listing itself. By the way, in many cases both are displayed at the same time (if I rank high enough for the search term in the engines involved):

Top 3 Search Terms Comparison - Paid versus "Free"

Well, I'll be darned. Now the visitors from ads are of better quality - higher rates of downloading, bookmarking, and newsletter subscription. The variation is really not best understood by the method of arrival (ad or free search), but by the search term itself! Or some other yet undiscovered combination of variables. If there can be this much change just by looking at search term, then I must have some paid ads keyed to search terms that generate very poor quality visitors. I know what you're thinking - he's going to Drill Down some more, take it down another level in next month's newsletter... And you would be right! By the way, in many cases both paid and free links are displayed at the same time (if I rank high enough for the search term involved). Visitors from paid ads are clearly of better quality - higher rates of downloading, bookmarking, and newsletter subscription. Paid ad visitors also stay twice as long on the web site. This is a monster change from the previous analysis, which showed when looking at all search terms (not just the top 3), paid versus unpaid, the free visitors appeared to be of higher value based on their behavior. The implication of the above shift: there is variability in the quality of visitor generated according to the search phrase, and this may account for some or all the difference between the quality of a pay versus free visitor. Intuitively, this makes sense to me, because I only pay for relevant search terms, and "free visitors" may be arriving as a result of a non-relevant search. This is tremendously important to know, especially in light of the general industry commentary that paid search listings result in poorer search quality for users. Hmm... So, let's take a closer look at search term quality by busting up the aggregate "paid" search results above by search term, and see what we get. The following table compares each search term individually with the total site statistics, where RM = Relationship Marketing, CR = Customer Retention, CL = Customer Loyalty, and TS = Total Site statistics. Clearly, the paid ads on average generate a higher quality visitor, and there is substantial variability even among the top 3 search terms in visitor quality. The term Customer Loyalty generates visitors with a shorter visit length and lower newsletter subscribe rate than the overall site! But at the same time, they bookmark at much higher rates. A bit puzzling, and whenever a behavioral marketer sees data sets with potentially conflicting indicators such as seen in the term Customer Loyalty, we know there is probably something else going on we need to find out about. Jim Novo has nearly 20 years of experience using customer data to increase profits. He is co-author of The Guide to Web Analytics and author of Drilling Down:Turning Customer Data into Profits with a Spreadsheet. If you want more visitors to take action on your web site, try using the free conversion metrics calculator, downloadable here. If you need to sell more to customers while reducing marketing expenses, get the first nine chapters of the Drilling Down book free at http://www.drillingdownbook.com.

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