Why First Click Attribution is Critical For E-Commerce Companies
Picture yourself searching online for that special, “stand out” birthday gift for your dad, who is not exactly easy to impress. You may start off searching for “best gifts for dad.” This search leads you to click on a paid search ad, advertising the perfect watch for Dad. Right then and there, you click “buy now,” plug in your credit card, and boom…you’re done. While for some impulsive folks this may sound normal, most people don’t buy the first thing they click on. The more common scenario might be that you do click on that PPC ad, but decide to take some time to think it over. After all, that watch isn’t exactly in your budget. The next day you see a remarketing banner for the watch, which reminds you that Dad’s birthday is fast approaching. You click on that ad, but still want to explore other options. Two weeks later, you’re in a time crunch. Dad’s birthday is next weekend. Your quickly type in the name of the watch into Google, and organically navigate to the site to purchase.
Right now, most digital marketers live in a “last click” world when it comes to optimizations and reporting. In this world, the last step or last interaction a user has before the conversion, in this case the organic search, gets all the credit. For many organizations this is a deeply flawed reporting methodology. There are five core traffic sources or “channels” that drive traffic to your website. The perception is that these channels operate by themselves and single handedly generate conversions and sales. While this is sometimes true, in the world of e-commerce, it is not common.
A user often interacts with multiple channels, like we saw in the example above, before becoming a customer. So the question then arises: which channel should get the credit for producing a conversion, or conversely, the blame for failing to produce a conversion? In the digital marketing world, it is crucial that we take into consideration first click attribution as a primary attribution model when reporting and making optimizations. You may say, OK, isn’t this just a different format of reporting or presenting data? The answer to that question for e-commerce businesses is no. When using first click attribution, we can see what specific keywords are driving traffic and ultimately, producing revenue. This can lead us to revisit where we are allocating budget and more importantly it can reveal “low hanging fruit” optimization opportunities that are often masked when using last click attribution.
To see this in more detail, let’s take a look at an example.
The following example represents revenue disparity between first click and last click performance for just one non-branded keyword. Last click ROI and revenue volume wrongfully indicate that the term is inefficient (based on an ROI goal of 2) and would require significant bid reductions to cut overall spend and increase profitability. For any digital marketing strategist, this would be an obvious optimization. However, if we look at first click attribution as an option, it tells a significantly different story. As you can see, the keyword drives 163% higher revenue with a significantly better ROI. We can now use this data to take action. By increasing bids, we can drive incremental revenue and growth on a term we previously were not capitalizing on.
Spending time looking at different attribution models and finding out what model fits your company best is crucial for any digital marketer. Identifying first click attribution as an option can be the first step in unlocking an abundance of revenue driving opportunities. For a relatively unknown e-commerce company, first click data can be key in discovering what is driving overall brand awareness and educating users about the company itself or the products it sells. For example, a brand new coffee bean company may utilize first click attribution data to see what terms are generating interest in their product and driving users to their site. However, a massive company like Macy’s already has developed a brand, and is most likely only interested in what marketing channel is driving that final sale, not how a user originally found their site.
You can easily start looking at various attribution models in Google Analytics. The Model Comparison Tool allows you to compare attribution models to see what keywords or campaigns are significantly contributing to revenue. This easy-to-access insight can be an important in helping make sure you’re making correct marketing decisions and maximizing the impact of each marketing channel.