Attribution Case Study: Insights You Can Use April 2012

Steve Latham CEO Encore Media Metrics @stevelatham

Background •  Agency: Lipman Advertising NYC •  Client: Hotel and Resort Operator •  Campaign objectives:

– Create awareness and consideration in a way that is measureable and insightful

– Primary goals: hotel and lodging reservations. •  Channels

– Display (150 million impressions) – Paid search – 3rd party email

Assignment •  Produce insights that matter

–  Useful –  Actionable

•  Measure and Interpret KPIs –  Conversion paths –  Engagement cycles –  Impressions required to influence a conversion –  True performance of vendors, placements and

keywords (beyond last click)

Key Takeaways •  Display was more impact than previously thought

–  Accounted for 26% of attributed conversions –  Exceeded paid search (26%) and natural search (15%) –  Influenced 30% of conversions via natural search,

referring and direct navigation •  Performance by media vendor and placement

varied significantly… –  Attributed CPAs ranging from $32 to $919 –  Mean was $107 with standard deviation of $67).

Path%Analysis IMPs Visits Display%Clicks Direct%Nav Natural%

SearchPaid%

Search Referring Display% Visits%

All Visitors 5.2 4.2 1.1 0.4 0.8 0.5 1.4 55.2% 44.8%Cluster 4 (45%) 1.5 2.8 0.8 0.0 0.1 0.0 1.8 35.2% 64.8%Cluster 6 (21%) 4.7 3.8 0.2 0.6 0.8 1.5 0.6 55.2% 44.8%Cluster 3 (15%) 6.1 4.0 1.5 0.2 1.8 0.3 0.2 60.3% 39.7%Cluster 8 (13%) 3.9 4.8 0.0 1.2 2.0 0.1 1.3 45.1% 54.9%Relative Contribution (all) 54.2% 45.8% 9.1% 6.1% 9.5% 7.6% 13.3%Includes Converters who were exposed to ads, grouped in natural clusters via machine-learning algorithm.

InterpretationThere is a broad distribution of conversion paths so we need to look beyond the averages. In aggregate, display ads accounted for 54% of interactions (range 35-60%) that led to conversions. Natural and paid search combined for 17.1% of of Interactions that influenced conversions.The "Average" Converter saw 5.2 display ads and visited 4.2 times. Most common sources: 1.1 Display, 0.8 Natural Search, 0.5 Paid search, 1.4 referring.

Key Insight #1 •  Conversion path analysis showed:

–  Converters were engaged via numerous channels –  Among Converters who were exposed to ads:

•  Average Converter saw 5.2 ads and visited 4.2 times •  1/3 visited through paid or natural search

Key Insight #2 •  Optimal frequency was 5.7 impressions overall

–  Ranged from 1.8 to 9.6 among vendors on the plan.

1.7$

6.2$

2.4$

5.4$

1.1$

3.0$

7.0$

1.3$

3.2$

6.6$

1.3$

4.7$

7.8$

1.8$

4.4$

1.8$

9.0$

2.4$

3.5$

7.0$

9.6$

1.6$

0

1

2

3

4

5

6

7

8

9

10

Publisher

8

Ad Net

1

Publisher

9

Publisher

5

Publisher

7

Publisher

2

Publisher

1

Publisher

3

Publisher

6

Ad Net

2

Publisher

4

Impressions*Required*by*Vendor*

Visit$ Conversion$

Key Insight #3 •  After attributing credit for assist impressions and

clicks… –  CPA for Display Ads fell by 60% overall

•  Range: 20% to 85% among placements

–  CPA for Paid Search fell by 15%

609$

1,026$

1,520$

1,013$

499$435$

733$

1,086$1,201$ 1,210$

0

200

400

600

800

1,000

1,200

1,400

1,600

Direct Nav Org Search Referrals Paid Search Display

Ac#ons'By'Channel'

Lst Click

Attributable

$22.38$

$319.96$

$18.89$

$131.98$

$0

$50

$100

$150

$200

$250

$300

$350

Paid Search Display

Cost'Per'Ac#on'By'Channel'

Last Click Attributable

Key Insight #4 •  Engagement cycles validate the need for a

sustainable, visible presence –  48% converted >30 days after seeing the first ad –  49% converted within 1 day of seeing the last ad. –  Average person visited 4.2 times before converting

Key Insight #5 •  Performance of media vendors varied

considerably (based on Attributed CPA). –  Four clear winners had an average CPA of $46 –  Four “on the bubble” with average CPA of $121 –  Three laggards with an average CPA of $521

Vendor Impressions Actions/(Last)

Click/Assists

Assist/Imps.

ICE/Ratio

ICE/Assists

Actions/(Attrib.) Spend CPA:/Last/

ClickCPA:/

Attributed Rating

Publisher/8 2,046,438 333 75 107 4.7 23 431 $13,971 $41.96 $32.43 WinnerAd/Net/1 3,427,418 63 45 1,672 7.8 214 322 $13,710 $217.61 $42.53 WinnerPublisher/9 1,227,090 8 5 610 1.8 339 352 $15,792 $1973.95 $44.88 WinnerPublisher/5 1,002,757 20 5 939 4.4 213 238 $15,368 $768.39 $64.46 WinnerPublisher/7 307,472 5 0 91 1.8 51 56 $5,863 $1172.56 $105.53 BubblePublisher/2 433,527 14 7 140 9.0 16 37 $3,978 $284.16 $108.83 BubblePublisher/1 1,735,227 11 1 143 2.4 60 72 $9,059 $823.58 $126.56 BubblePublisher/3 1,191,854 18 5 198 3.5 57 80 $11,329 $629.41 $142.38 BubblePublisher/6 238,828 17 6 0 7.0 0 23 $6,207 $365.12 $269.87 LaggardAd/Net/2 7,786,210 13 8 344 9.6 36 57 $21,306 $1638.95 $374.89 LaggardPublisher/4 227,348 2 0 11 1.6 7 9 $8,157 $4078.26 $919.04 LaggardTotals 19,624,169 504 157 4,255 4.2 1,014 1,675 $124,740 $247.50 $74.45

So…What’s The Point? By understanding…

–  Conversion Paths and Engagement Cycles –  Optimal Frequency –  Impact of Channel, Vendor and Keyword

…the Agency can optimize performance The economic opportunity is significant:

Group Spend % of Budget Revenue ROS Proforma

% BudgetProforma

ROS Proforma Revenue Impact

Winners $58,841 37% $1,343,423 $22.83 59% $22.83 $2,157,823 $814,401

Bubble $65,148 41% $267,262 $4.10 41% $4.51 $293,988 $26,726

Laggards $35,670 22% $88,708 $2.49 0% n/a $0 ($88,708)

Total $159,659 100% $1,699,393 $10.64 100% $15.36 $2,451,811 $752,418

Relative Improvement 44%Incremental Revenue $752,418

Takeaway: by moving budget from Laggards to Winners and improving performance of Bubbles by 10% is worth a 44% improvement in revenue

What’s Next •  More granular analysis

–  Format and creative •  Tracking offline converters

–  Via post-purchase site visits •  Excluding non-viewable impressions

–  Leveraging MediaMind visibility metrics •  Attribution for Brand Lift studies

–  Via partnership with Vizu

Criteria for Choosing a Vendor •  Consultative approach

–  Planning, implementation, production, analysis •  Transparent and programmatic approach

–  Known algorithms are preferred (vs. proprietary) •  Insightful, actionable and intuitive reports

–  Must be useful for media planners, analysts, clients •  Flexibility

–  Able to accommodate specific needs •  Level of effort to deploy and manage

–  The lower the better!

Questions?

Encore Media Metrics Steve Latham, CEO 646.919.1809 http://EncoreMetrics.com

Steve@EncoreMetrics.com

@SteveLatham @EncoreMetrics

http://Attribution101.com