I recently saw an incredible presentation by Google Analytics guru/evangelist Avinash Kaushik on “understanding the full value of mobile.” The concept – at least on its face – is simple: to understand the value of a mobile click, you have to look beyond immediate conversions and give credit to all the other ways a customer might interact with your business via their mobile device.
This could include any number of things: downloading your mobile app, calling your store, looking up directions, signing up for an email newsletter, watching a product video, etc.
The presentation was self-serving for Google, absolutely. But, properly understanding the value of mobile is a vital step marketers must take to effectively compete in a world where SEM clicks increasingly come from mobile devices.
At a basic level, simply acknowledging that there is more value to a mobile click than just the direct conversion enables marketers to effectively argue for more budget.
For example, imagine you’re run marketing for a furniture store. You notice from your analytics reports that $1,000 of advertising on mobile PPC drove zero e-commerce purchases; but, 25 phone calls and 50 views of the “directions to store” page. If you simply shut off your campaign without investigating the potential value of these non-converting interactions, you’d certainly be my nominee for Lazy Marketer of the Year!
The problem with full-value calculations, however, occurs when you move from theoretical approval of the process to tactical implementation. Once you’ve decided to measure the “full value” of your mobile clicks, you then need to define both the “full” and the “value” parts of the concept — and that’s when the fun/trouble begins.
The risk we face in trying to move beyond simple tracking of last-click conversions can be best described as “garbage in, garbage out,” something Avinash himself spells out in detail on his blog. Picking the wrong actions to measure, or the wrong value per action, will drive you to make the wrong marketing decisions. Indeed, once you start moving beyond simple metrics, it becomes quite easy to manipulate numbers to show the results you want.
What follows, with thanks to Ron Fusco on my PPC Associates team, are a few different ways to evaluate the “full value of mobile” and the “full value of marketing.” As you’ll see from the data, different charts lead you to totally different conclusions about your campaigns.
Chart #1: Giving Credit To Direct Conversions Only
A simple setup of Google Analytics could cause a marketer to create a mobile ROI chart that looks something like this:
Based on this data, your mobile PPC is unprofitable, even though it seems there are many non-conversion events happening that could potentially be valuable for your business. If direct conversions are the only data you are tracking, the conclusion here would be to reduce your bids or pause your mobile campaigns outright.
Chart #2: Full Value Of Mobile Actions
To really understand full value, you have to actually figure out the revenue that these various other actions are driving. For some of these interactions, calculating revenue is relatively easy.
For example, a phone order from a click-to-call mobile ad can be connected back to your ad campaign, as could purchases that result from email subscribers who originally signed up via an ad.
Other actions like directions to a store or an app download might be more difficult to assign value to, but they can still be accounted for by using proxy metrics.
This fuller understanding of the value of your mobile PPC campaigns might be represented in a chart like this (click for the full-sized image):
Just look at that — a campaign that looked unprofitable when accounting only for direct mobile conversions suddenly shows a nice profit when you add in other mobile interactions. Start bidding up your mobile campaigns!
Chart #3: Full Value Of Marketing
Since we’re figuring out the full value of mobile, it makes sense to do the same exercise for all of our other channels as well, right? Looking at your channels side by side in this fashion provides two benefits: first, it helps you understand which channels are your most profitable; second, it helps you allocate budget to the right channels to meet the right marketing objective.
For example, a campaign with the objective of driving email sign-ups might work on some channels but not on others. A sample chart below shows you how this might look (again, click for a larger image):
The above chart might lead you to double down on your AdWords campaigns, get rid of YouTube, and continue investing in your other channels.
Chart #4: Full Value Of Marketing, Cross-Channel Attribution
In a multi-channel world, however, you have to be careful to attribute an individual conversion to the appropriate channel. A conversion funnel that started with an AdWords click, then drove a click-to-call via a mobile ad and eventually converted after the user saw a sponsored post on Facebook needs to give partial credit to each of these channels (rather than 100% to each, which would result in 300% credit!).
Now that you’ve figured out the attributed value, Facebook PPC has gone from black to red, and it looks like AdWords and email are your real winners. Mobile is still eking out a profit, but barely.
Charts #5 – #50 And Beyond
Four charts, four totally different perspectives on the full value of your mobile campaigns. Is figuring out full value a good exercise for marketers? Most definitely. Are you certain to derive better data and better ROI as a result? Not necessarily.
Figuring out the full value of your marketing is an ongoing process, not a one-time analytics exercise. To quote Avinash: “The Web allows you to make educated mistakes. Fast. With each mistake, you become smarter. With each mistake, your next step becomes more intelligent. Make educated mistakes.” Start creating different shades of full value today!
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