Leveraging Advertising Data For Behavioral Insights

With marketing becoming increasingly programmatic, it is important to leverage every possible metric that can provide insights into customer behavior.

For digital marketers, this usually means analyzing site traffic data; but, advertising data can also be used to great value in behavioral analytics. In this article, I show one example of this type of analysis along with the results.

Distribution Of Click-To-Conversion Time

A metric common in all forms of digital advertising is click-to-conversion time, also known as conversion delay, which is the delay between when the ad was clicked to when the individual made a purchase.

For most advertisers, we see two distinct peaks in the distribution of conversion delay, called a bimodal distribution in statisticians’ terms. The trough portion of the distribution is typically around 10 hours. Below is an example from a retail advertiser’s paid search campaign showing this effect.

image002

The common spread of orders during the day explains much of this pattern, since few orders are placed between midnight to 7 am. The first peak corresponds to buyers who make the purchase within the same day as the ad click, while the second peak consists mostly of those who slept on the decision.

Click-to-conversion time, when taken alone, may be of limited value to marketers. However, things start to get interesting very quickly once we start analyzing its relationship to key performance indicators (KPIs).

Conversion Lag Vs. Order Value

For instance, order value is one metric that intuitively seems to be affected by conversion delay – customers may require a longer consideration time to pull the trigger on a more expensive order.

Plotting order value vs. click-to-conversion time for the same advertiser, we see the pattern below where each blue dot represents a separate order. We see that the split between same-day and delayed orders is again evident:

image003

The benefit of having these two distinct groups is that it makes possible certain analyses that will be difficult otherwise. A common issue when trying to analyze the relationship between click-to-conversion time and any other metric is the existence of an attribution look-back window, which filters out conversions that occur beyond a certain number of days from the ad click. This lost data precludes many statistical analyses.

However, having a bimodal distribution allows the use of clustering techniques to extract only those orders that belong to the first peak of orders, the same-day converters as circled above, which is not plagued by the look-back cliff problem.

Conversion Lag Is Longer For Higher Value Orders

In the case of this advertiser, the results of our analyses gave the following result:

  • For same-day converters, the click-to-conversion time increases by 42% for every tenfold increase in order value.

This means that if a customer takes 1 hour to decide on a purchase of $10, he/she will take approximately 85 minutes to place an order of $100, around two hours for an order of $1000, and so on.

  • Delayed converters have a 15% greater order value, on average, compared to same-day converters.

The exact ratio will vary based on the type of products offered. For another advertiser, the average order value of delayed converters was more than twice that of same-day converters.

The results show that though the likelihood of conversion may drop off with time, those that do convert after a longer delay have a higher expected order value.

This is just a glimpse of how insights from advertising data can be used effectively for informing audience segmentation on retargeting and real-time bidding (RTB) campaigns, as well as for driving dynamic user experiences based on past visits and browsing behavior.

Please leave a comment and share any interesting behavioral analyses you have done using advertising data.

Opinions expressed in the article are those of the guest author and not necessarily Marketing Land.

Related Topics: Analytics | Analytics & Marketing Column | Channel: Analytics | Google: Search | Retargeting & Remarketing | Search Marketing

Sponsored


About The Author: leads product marketing at Origami Logic, a cross-channel marketing intelligence solution for modern marketers. With a career of 8 years in marketing and analytics spanning various functions, Kohki's focus has always been on translating data into strategy, simplifying the complex, and bridging the gap between data and organizational silos.



Sign Up To Get This Newsletter Via Email:  


Share

Other ways to share:

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. You can read more about our comments policy here.
  • Kohki Yamaguchi

    A technical note that the second peak/cluster is actually a collection of peaks, it only appears bimodal on a log scale. The pattern is in fact a daily one, so there are as many local maxima as there are days in the look-back window.

  • Luca Naso

    Another example of how Data Anlytics can help to burst conclusions based on common sense.

    It makes sense that buying more expensive products requires longer conversion lag. If this was the case, then in the second plot one should see a cloud of orders in the upper-right part of the diagram, say $1000 and 10 days.

    However the second plot in this example shows that this is not the case.
    Large conversion lags (e.g. 10 days) are seen for both low- and high- price orders ($30 and $400), and actually the price-orders range looks the same for both the short and the long time lag peaks.

 

Get Our News, Everywhere!

Daily Email:

Follow Marketing Land on Twitter @marketingland Like Marketing Land on Facebook Follow Marketing Land on Google+ Subscribe to Our Feed! Join our LinkedIn Group Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Marketing News!

Marketing Day is a once-per-day newsletter update - sign up below and get the news delivered to you!