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Estimating the Importance of Google's Conversion Estimator

  |  May 23, 2014   |  Comments

Google's Conversion Estimator for AdWords gives marketers a better way to understand the way conversions happen in the multi-device, multi-screen marketing environment.

Consumers follow a complex path across multiple devices to the conversion point. Mobile access - which was fractional a few years ago - is poised to become the lion's share of traffic for many brands. At this week's Internet Retailer Conference and Expo (IRCE) in New York, Mark Friedman, president of e-commerce at Steve Madden, noted that traffic from mobile users already accounts for 40 percent of his brand's traffic; he estimates that mobile will be 60 percent "next year."

Google recently upped its game to give marketers better tools to understand the way conversions happen in the multi-device, multi-screen marketing environment when it rolled out Conversion Estimator for AdWords, citing an internal study showing that 90 percent of multi-device shoppers move sequentially between different screens. In its announcement, it noted that travel marketers using the tool were able to "measure 33 percent more conversions that originated on a mobile phone and later converted on a

different device."
Obviously, giving marketers a way to more accurately track cross-device conversions is in Google's interest. While query volumes from mobile phones have been increasing dramatically, mobile cost-per-clicks (CPCs) have remained anemic compared to CPCs on the desktop. By providing more insight into how valuable mobile clicks and conversions are and making marketers more comfortable spending money in a holistic marketing environment, spend will presumably increase, boosting CPCs to more healthy levels.

At the same time, however, there is no question that Google's recent investments in AdWords will benefit e-tail marketers, especially the ability to track in-store sales driven by AdWords. Right now, this functionality is definitely in the "beta" stage (one could argue that many of Google's products are perpetually in beta, but that's the way that Google rolls). Using data provided by a select (and so far, undisclosed) network of retail partners, Google announced in April that one of its beta partners reported that "overall return on ad spend increases 102 percent when including offline sales in online advertising results." As more retail partners are recruited for the program, the quality of this data will certainly improve.

Take This Seriously

If you've read my past columns, you know that I've been crusading for some time against the chronic undervaluing of search clicks that's been endemic in this industry since its inception. Marketers who are otherwise sophisticated in their offline marketing have tolerated siloization of data, marketing budgets, and personnel. Consumers - including those shopping across multiple devices, expect one single, unified experience of the brand, and the best brands give them this. But marketers have lagged badly behind in developing a "single view of the customer," because they've lacked to the tools to do so, and my hope is that Conversion Estimator helps give them more transparency into the actual journey that consumers take.

Some Caveats

At the same time, however, it's important to note the obvious here: that Conversion Estimator is an estimator, based on a limited data set whose reliability will vary. Google doesn't publish many details about exactly how it comes up with the data used to inform its tool, except to note that "cross-device and cross-browser conversions are estimated using aggregate data from people who have signed into Google. Based on this aggregated data, we create anonymous, aggregate estimates of the number of cross-device conversions attributed to AdWords." Nor will every marketer have the scale required to provide accurate results. Google also notes that "not every advertiser will have these estimated conversions because of limited data. For instance, we only show data when we are very confident that our cross-device estimates are highly accurate. In some case, we'll show a '--' when you might have cross-device conversions, but there isn't enough data for us to confidently make an estimate."

Your Own Estimates

Often you are in position to both validate the estimates Google provides or to come up with better estimates. Each business is different, but some combination of phone tracking, coupons and deals, and asking sales people to inquire about how prospects and customers are using their smartphones and the Web to do research can help.

Getting Started

While the Conversion Estimator is still a work in progress, it's something your team needs to be familiar and fluent with. Using it can give you a way to more accurately bid for traffic on all devices. For example, by comparing the cost of desktop conversions to the estimated cost of conversions for desktop traffic, you may find a percentage delta (positive or negative). If the estimated cost of desktop conversions is lower, boost your bids accordingly. It also lets you bid more accurately for mobile traffic. Examine the ratio between mobile estimated total conversions and desktop/tablet conversions, and plug that into your mobile bid adjustment.

I'm excited about Conversion Estimator. Are you? Let me know.

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Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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