With the plethora of marketing channels in the mix, one of the burning questions that we find our clients asking is: “How much incremental value is driven by PPC?” For many, understanding this is vital when considering profitability and return on investment for a given activity.
Incremental value is the additional value that is driven by a marketing channel, which would not have been generated by any other means. It could be considered the holy grail of understanding the real value of your paid marketing activity, even beyond multi-channel attribution analysis.
Within the sphere of paid search, it is possible to use remarketing to get closer to the truth of incremental value. Let’s see how!
How Do I Understand the Incremental Value of My PPC Activity?
RLSA in Google AdWords was fully rolled out over two years ago, with the beta access available since July 2012. Since then it’s been used as a powerful tool to send the right messaging to the right customers, gain more control over bidding and glean insights into the behaviour of different audiences. It is also a fantastic way of using split testing to measure the incremental value of PPC.
The approach is to split up website traffic into two groups, a control group and the test group – the two groups should be equal in size. For the users in the control group, an ad will be shown as normal and tracked through to sale. For the users in the test group, ads will be prevented from showing, but the user will be tracked through to sale via other marketing channels (including Direct) via the tracking pixel on site.
Based on the difference in engagement of the two groups, it is possible to understand the real incremental value of PPC. The revenue/conversions driven by the test group highlights where other channels have filled in for the PPC ad, allowing the potential converters to find the site regardless of seeing a PPC ad or not.
Test Setup – Step by Step
- Create two new RLSA audiences (Control and Test) in Google AdWords to cater for the control and test groups. These audiences should be set up to collect users who are “Visitors of a page with a specific tag”.
- Google Tag Manager (among others) is able to randomly assign visitors to the site into the two groups. In order to do so, the tag details from the two audience lists need to be added to the GTM. A firing rule should be added to fire the tag for either Control or Test for all visitors.
- When active, this rule will begin firing the tag for both groups alternately. Once each group has collected a large enough cookie pool (minimum of 1,000 each), it is time to activate the audiences in Adwords.
- Add both audiences to every campaign in Adwords, making sure that the settings are ‘Bid Only’. For the Control group, add a Bid Modifier of 0% so that these searchers will continue to see ads as normal. For the Test group, add the relevant bid modifier to the test audience to prevent the ads from delivering.
- Over time, both groups will be tracked on the site, with conversions coming in from users who saw PPC ads and also from users who were not shown ads. The data collected will begin to tell the story about incremental value. It is important to leave the test running for at least the time it takes for two full buying cycles, to be confident that the data is significant enough.
With this valuable data collected, one can use it to gauge what level of incremental value PPC delivers. Not only will this empower greater budget control across marketing channels, it will also mean higher profitability for one’s business.
Despite incremental value being extremely important to understand, each website and business model will have a varied way of collecting data and their own set of challenges to overcome when trying to analyse the results: Be sure to get support from a team who can help.