Optimize your Paid Search with the Attribution Modeling Tool in Google Adwords
Posted by drew on Feb. 9, 2014, 5 p.m.
Google recently unveiled the new attribution modeling tool in Google Adwords. The tool is almost identical to the attribution modeling tool in Google Analytics, allowing you analyze various sources of conversions based on different models. While it can be useful to compare different models side-by-side, the more actionable data for businesses will come from selecting which model is right for them and optimizing their campaigns based on that. To start, I’ll go over the different models and what they mean:
1. Last Click
This model gives 100% of the conversion value to the last click on your adwords account before the conversion. For example, let’s say a user searches for “brown shoes,” clicks on your paid ad, and then leaves your site without converting. Four days later, they are searching for “brown bags,” and another one of your ads from a different campaign. This time around, she converts on your site. Under the last click model, this entire conversion would be attributed to the campaign for “brown bags.” If your Adwords campaigns are designed to lead to instant conversions with a short consideration period, this would be an appropriate model to use.
2. First Click
As you can probably guess, this model gives full attribution of a conversion to the first click in your Adwords account. In the above example, the campaign for “brown shoes” would receive credit for the conversion, and the campaign for “brown bags” would get nothing. If your conversion path generally involves a long period of consideration, it may be of use to you to apply this model and discover where people are entering your sales funnel.
If you think all Adwords clicks are of the same value, you should use the linear model, which spreads the conversion value out evenly across all Adwords clicks. For our female shopper above, half of her conversion value would be given to both the “brown shoes” and “brown bags” campaigns. If your campaigns are designed to maintain contact with potential customers as they move toward conversion, then each step in this sales cycle could be just as important as they others.
4. Time Decay
The time decay attribution model gives more conversion credit to Adwords clicks that occur closer to the time of conversion. Since there was a four-day gap between the users initial click on “brown shoes” and last click on “brown bags,” the final click would get a greater value for the conversion. This model could be useful for advertisers running time-sensitive campaigns. If you have a weekend sale running in two weeks, you may decide that clicks during the sale weekend are more valuable than clicks two weeks prior.
5. Position Based
Lastly, the position based attribution model gives 40% of the conversion value to the first Adwords click, 40% to the last Adwords click, and evenly distributes the remaining 20% across the rest of the interactions. This attribution model is most ideal for advertisers who want to give more weight to the ad that helps users enter the sales cycle and the ads that ultimately led to a conversion.
It is important to note that the attribution modeling tool in Adwords only discusses clicks on paid ads. If a user clicks on one of your ads, leaves your site, then comes back a week later through organic search to convert, that conversion will be attributed to the paid ad. For a more complete view of attribution, you can use the Google Analytics Attribution modeling tool.
Once you have figured out which attribution model is going to be most useful to your business or brand, how do you optimize? Primarily, this is a bidding and budgeting question. The attribution modeling tool can allow you to distribute conversion value on the campaign, ad group, and keyword levels. This allows you to increase the budgets of campaigns that have the most conversion value as well as increase bids on the top performing keywords. Vice Versa, you can decrease the bidding and budgets for the keywords and campaigns that are not performing as well, or look at them to see if they can be improved in other ways.
This tool allows you to divide your ad spend effectively and focus your optimization time on the areas where it is needed most. You can find this tool under the Tools and Analysis tab, then inside the Search Funnels portion of the left navigation bar.