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CONTENTS:

DISCOVERING HIGH VALUE AD SEQUENCES WITH MULTI-TOUCH ATTRIBUTION:

INTRODUCTION .................................................................................................................................... 2

METHODOLOGY................................................................................................................................... 2

FINDINGS ............................................................................................................................................. 3

HOW DO PPC AD PURCHASE FUNNELS CHANGE Q3 TO Q4? DO THEY GET LONGER? DO THEY

GET MORE VALUABLE? ........................................................................................................................ 3

ARE MULTI-TOUCH PURCHASE FUNNELS MORE VALUABLE? ............................................................. 4

PREVALENCE OF NON-TRADEMARK CAMPAIGNS LEADING TO FUTURE TRADEMARK TERMS? ...... 4

DO HIGH PERFORMING SEQUENCES OF CAMPAIGN TYPES HAVE MESSAGE THEMES? ................. 7

HOLIDAY MESSAGING IMPACT IS NOT GREAT ................................................................................ 10

DIFFERENCES BETWEEN MESSAGES AT THE BEGINNING VS THE END OF THE SEQUENCE .............. 11

STRATEGIC IMPLICATIONS ................................................................................................................ 12

GOOD SELLING! ................................................................................................................................. 12

THE NETELIXIR UNIVERSITY TEAM ....................................................................................................... 12

FOR MORE INFORMATION ................................................................................................................ 12

APPENDIX ........................................................................................................................................... 13

GLOSSARY OF HEADLINE CODING SYSTEM ..................................................................................... 13

EXAMPLE OF AD BEFORE AND AFTER CODIFYING .......................................................................... 14

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INTRODUCTION

Our latest research was inspired by the findings of our Mastering Attribution Through Conversion Path Analysis paper and our ensuing conversations with clients. Whereas the Mastering Attribution study was a very “left brain”, logical quantitative analysis, we set out with this study to explore the “right brain” aspect of marketing as it is manifested in the messages contained in ppc advertising. Specifically, with the understanding that ~60% of purchase funnels involve more than 1 customer touchpoint, we set out to determine if there were specific ppc ad copy sequences that stand out, as well as whether or not those sequences change during the peak holiday selling season.

Reading our latest search engine advertising research will help you:

Learn how high-performing, top-of-the-funnel ads change during the holiday season.

Learn how to use your conversion path reports to identify your most valuable ad copy sequences With suggestions for ad copy testing that you can implement immediately

METHODOLOGY

Most ppc advertising effectiveness studies focus on the click-through-rate (CTR) of the ads as the key performance indicator. For this study, we chose to focus on the end result, the ones that matter most, which of course are orders and revenue. We pulled conversion funnel data for last year’s Q3 and Q4 selling seasons from a subset of the Google Analytics accounts that were included in our attribution paper. We selected only those paths that had more than 1 ppc ad customer touchpoint, specifically Google AdWords touchpoints (source/medium= google / cpc for the GA geeks out there), so that we could easily access ad copy content and performance data together. We then “normalized” ~10,000 individual ad copy messages into their building block components so that we could aggregate statistics. For example, headlines with language like “Official Store”, “Official Site”, “Official Website”, etc. were coded as “Official”. All trademark terms were coded as “TM”, 3rd party brand names became “3rd brand”, and so on.

The industry sectors included in this study are the same sectors we examined in the attribution study, which are:

Apparel Home Furnishings Health & Beauty B2B Fashion Hobby & Leisure Food Gifts

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Some of the questions we sought to answer were: How do conversion funnels change from Q3 to Q4? Do they get longer? Do they get more

valuable? Are multi-touch conversion funnels more or less valuable? How prevalent is the common perception that non-trademark paid search campaigns result in

subsequent return visits using trademark terms?

FINDINGS

HOW DO PPC AD PURCHASE FUNNELS CHANGE Q3 TO Q4? DO THEY GET

LONGER? DO THEY GET MORE VALUABLE?

Table 1 Paid Search Conversion Path Length Summary

CPC PATH LENGTH Q3 AVG # STEPS Q4 AVG # STEPS

At least one CPC touch 1.54 1.06

>1 CPC touchpoints 5.68 4.02

Maximum path length 60 40

We found that paid search related conversion funnels do change in the 4th quarter: they shorten. All paths that contained at least a single paid search touchpoint dropped from an average of 1.54 steps to 1.06 steps in Q4. These numbers include all of the touchpoints in the path, regardless of whether they were paid search induced or not.

When you filter the data for paths that contained multiple paid search touchpoints, the trend was still evident with paths containing multiple paid search driven visits dropping from an average of 5.68 steps in Q3 to 4.02 in Q4. Again, these numbers include all steps in the conversion path.

One reason we see the average path length of conversions with at least a single CPC touchpoint drop in the 4

th quarter is because of a jump in those conversion funnelsthat are just one step: a CPC visit. They

jump from 46% of conversions in Q3 to 53% in Q4. Another reason for this drop is because of the maximum path lengths we saw in the data. In Q3, we encountered path lengths that reached 60 touchpoints, while in the 4

th quarter that maximum dropped by a third to just 40 touches.

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Table 2 Paid Search Conversion Path Contribution Summary

Q3 Q4

Single CPC conversions share of total conversions

46% 53%

Single CPC conversion value share of total conversion value

42% 51%

Single CPC conversion path AOV $110 $106

AOV for Multi-touch conversion paths with at least 1 CPC touch

$126 $115

Correlation score between path length and AOV (.25) .42

ARE MULTI-TOUCH PURCHASE FUNNELS MORE VALUABLE?

As you can see in Table 2, at the transaction level, multi-touch CPC conversion funnels are more valuable. In Q3, they were 15% more valuable, while in Q4 that delta was 8%. We suspect this phenomena might be related to the level of purchase consideration. Generally speaking, larger purchases involve more logical decision-making than impulse purchases, so the correlation between path length and AOV could simply be a result of consumers doing their homework before hitting that “checkout” button. What is surprising in this dataset is the correlation score between path length and AOV for each quarter. For Q3, it’s actually negative, as we see a drop in AOV at the high end of the number of conversion path steps.

PREVALENCE OF NON-TRADEMARK CAMPAIGNS LEADING TO FUTURE

TRADEMARK TERMS?

One of the more surprising facts in multi-touch attribution that we have seen in both our own research and in other published research is the presence of trademark paid search campaigns closer to the top of the funnel than the bottom. This fact surprises us because, like many retailers, we were believers in the theory that non-trademark, or what some call generic keywords help advertisers get in front of prospects at the beginning of their shopping journey, and then when those shoppers decide to go back to the advertiser’s web site, they enter the site name or some variation of it into the search engine and click on the advertiser’s trademark campaign ad. We bought into this theory because it is, as Spock, (may he rest in peace), would have said “entirely logical, Jim”.

So in this study, we wanted to size the non-trademark to trademark ad sequencing and were surprised to find that it’s not as prevalent as many perceptions would believe. Table 3 shows the share of conversions for the 2 quarters we studied by type of ad sequence for all sequences in our study’s data. For example, if a conversion path had 3 sequential steps with a paid search ad, we identified 2 sequences: the first to the 2

nd ad and the 2

nd to the 3

rd ad. TM indicates a trademark ad, NTM indicates a non-trademark ad.

You can see that the non-trademark to trademark sequence, (which means the user clicked on a non-trademark ad, then clicked on a trademark ad), contributed 18% of conversions in Q3 and 17% in Q4. Interestingly, a non-trademark to non-trademark ad sequence was larger in both quarters with a sequence of two trademark ads being the largest driver of conversions. Note that there is a big jump in the trademark to trademark sequence in Q4. In our Mastering Attribution research paper, we showed the top of funnel impact trademark campaigns have. Here is yet another reason to think hard about a decision to cut back trademark campaign budgets during the holidays.

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Table 3 Paid Search Ad Sequences – All Path Sequences

We wanted to hone in on the top of the purchase funnel, so we quantified the ad sequences for the first 2 ads in the conversion funnels we studied. If the conversion path had more than 2 sequential ad steps, we only looked at the first 2. Those results can be seen in Table 4. The shape of the results are very similar. One notable exception is the non-trademark to trademark sequence drops in contribution share from 17% to 12% in Q4. Here again we see non-trademark to a subsequent non-trademark ad outweighing the non-trademark to trademark ad sequence, and the trademark to trademark sequence dominating.

Table 4 Paid Search Ad Sequences, First 2 Ads only

When you focus in on just the first step in the paid search portion of the conversion path, you see an even more dramatic shift from Q3 to Q4. Table 5 shows these results where you can see the % of conversions that had a non-trademark ad appear first drop from 42% to 29%.

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Table 5 First Ad Step Summary

One other finding of interest that seems almost counterintuitive is the average conversion path lengths by ad sequence. Table 6 shows this data, and the average # of steps shown is for the entire conversion path, not just the paid search version. You can see that when trademark ads come first in the sequence, the path length is longer. For each quarter, the non-trademark initiated sequences are almost a full step shorter than those that start with a trademark ad. We call this almost counterintuitive because another wide held belief is that non-trademark ads attract a higher percentage of visitors who are new to the site, and therefore it is likely that those new users’ conversion funnels would have more steps or visits in them. For whatever reason, here we see that it is visitors coming from trademark ads that have a longer conversion path.

We also looked at the AOV for each sequence and there was no clear trend. For example, the AOVs for the first ad in the sequence analysis were within 1% of each other for both quarters.

Table 6 Avg. Path Length by Ad Sequence

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DO HIGH PERFORMING SEQUENCES OF CAMPAIGN TYPES HAVE MESSAGE

THEMES?

We wanted to identify whether or not different types of ad copy messages performed differently in Q4. So we took the ad content for every ad in Q3 and Q4 and “normalized” the contents so that we could aggregate across the different accounts. It’s also important to note that the clients that are included in this study include, to borrow a retail term, a mix of new and comparable clients. That is, NetElixir was not managing some of these paid search efforts last Q3 and Q4, meaning we had no input into the ad copies that ran then.

In all, we codified over 15,000 different ads across the 2 quarters. For example, any trademark ad that included some kind of “official” message, such as “Official Store”, “Official Web Site”, “Official Site”, etc., was simply coded as “Official”. Terms that represent a type of product or a product category were coded “product keyword”.

Tables 7 & 8 show the differences in headline content for the first ad position in those conversion funnels containing more than one paid search contact point.

For the non-trademark ads, one notable change from Q3 to Q4 is that headlines featuring some aspect of the product’s unique selling proposition fall out of the top performing headlines. For trademark campaigns, one common theme to point out that applies to both quarters, is that all of the headlines include some variation of the trademark name. A notable difference between the 2 quarters in trademark copy was the jump that action words in the headlines took, going from leading to 4% of conversions in Q3 to almost 10% in Q4. Finally, take a look at how the conversions are concentrated by first ad type. The trend moves in opposite directions from Q3 to Q4 based on type. Non-trademark headlines become more diversified with the top 4 spots sliding from ~14% to ~11% of conversions, while on the trademark side, the reverse is true as the conversion share of the top trademark headlines gets more concentrated, moving from over 33% to over 45%.

Table 7 NTM Headline Formulas for First Ad Position

Q3 HEADLINE % OF CONV Q4 HEADLINE % OF CONV

NTM DKI 5.3% DKI 4.5%

Product USP 3.3% Product Keyword 3.5%

Product Keyword 3.0% Product Keyword & Sale 1.7%

Product Keyword & Sale 2.4% Product Keyword & emotional adjective & sale

1.5%

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Table 8 TM Headline Formulas in First Ad Position

Q3 HEADLINE % OF CONV Q4 HEADLINE % OF CONV

TM Official 10.6% Official 18.2%

TM 8.0% Action TM 9.7%

Emotional adjective & sale & TM

5.6% TM 9.3%

TM product USP 5.3% DKI 4.9%

Action TM 4.0% Emotional adjective & sale & TM 3.7%

Table 9 shows the top headline sequences for the first 2 ads in the conversion path.

They are dominated by trademark to trademark sequences. The DKI to DKI sequence does include some non-trademark ads. In Q3, 56% of those conversions had non-trademark ads kicking them off while in Q4 the non-trademark share of that sequence dropped to 41%.

Table 9 Top Headline Sequences

Q3 1ST HL Q3 2ND HL % OF CONV Q4 1ST HL Q4 2ND HL % OF CONV

Official Official 10.1% Official Official 13.8%

TM TM 7.1% TM TM 7.5%

DKI DKI 4.5% Action TM Action TM 6.1%

Home of TM Home of TM 3.9% DKI DKI 4.1%

Emotional adjective & sale & TM

Emotional adjective & sale & TM

3.9% Home of TM

Home of TM 2.6%

As you might surmise from looking at the formulas for the top headlines in Table 9, the sequences of 2 consecutive paid search touch points were dominated by sequential trademark ad touches, which are denoted by TM > TM. In Q3, those sequences accounted for 73% of the subset of conversion funnels that had sequential paid search touches, and that share grew to 80% in Q4.

The top ad message headline sequences by campaign type sequence are shown in Table 10. For our study, we looked at 4 different sequences:

1. Trademark to trademark (TM > TM) 2. Non-trademark to trademark (NTM > TM) 3. Non-trademark to non-trademark (NTM > NTM) 4. Trademark to non-trademark (TM > NTM)

As many retailers might suspect, the trademark to non-trademark sequence had little data and was almost negligible, contributing less than 2% of the total conversions in our dataset.

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Table 10 Top Ad Messaging Sequences by Campaign Type

Q4 Q3

HL 1 HL 2

HL 1 HL 2

TM > TM TM > TM

Official Official 33.1%

Official Official 21%

TM TM 17.6%

TM TM 17%

Action TM Action TM 13.0%

TM emotional adj. Sale

TM emotional adj. Sale

11%

Home of TM Home of TM 6.3%

TM product USP TM product USP 8%

TM emotional adj. Sale

TM emotional adj. Sale

6.0%

Home of TM Home of TM 8%

TM product USP TM product USP 3.7%

Action TM Action TM 8%

NTM > TM

NTM > TM

DKI Official 2.6%

Product USP TM 3%

Product KW Official 2.6%

Action 3rd brand Official 1%

Action 3rd brand Official 1.5%

Product KW Official 1%

3rd brand Official 1.4%

Product KW sale TM emotional adj.

Sale 1%

Action TM Action TM 1.2%

3rd brand Official 1%

NTM > NTM

NTM > NTM

DKI DKI 3.6%

Product USP Product USP 5%

% off product KW % off product KW 1.8%

DKI DKI 5%

Product KW DKI 1.4%

Product KW Product KW 3%

DKI Product KW 1.3%

Action 3rd brand Action 3rd brand 2%

Emotional adj. sale product KW

Emotional adj. sale product KW

1.3%

% off product KW % off product KW 2%

TM > NTM

TM > NTM

Action TM Action product KW 0.8%

TM Product USP 1%

Official Product KW 0.6%

Official DKI 0%

Official DKI 0.6%

Action TM Action TM 0%

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If you look closely, you’ll notice some interesting contrast between the TM > TM and the NTM > NTM data, with respect to changes from Q3 to Q4.

1. The top 2 headline patterns for the TM > TM sequences remain the same in Q3 and Q4. That said, note the significant jump in the Official > Official share of the conversions in Q4, which is almost 50% larger. Our guess is that this phenomena might be driven by gift buyers who received suggestions on where to shop who want to be assured they are going to the right place.

2. DKI > DKI is moving up – which is more of a result from ad copy change by 1 client, moving away from the Product USP format.

The top 3 headline patterns in the TM > TM group control a significantly larger share of the conversions, going from 49% in Q3 to almost 64% in Q4, while the top 3 NTM > NTM headline sequences’ share of the total shrinks in Q4 from 13% to almost 7%. The takeaway here would be to examine your own results for the 2

nd half of last year to see if your trademark campaigns behaved in a similar fashion. If so, you might

want to ensure that you have ads with those Q4 messages ready to go for this year.

Table 11 shows the ad headline formats that appear most frequently in our analysis by campaign type sequence (as in, how many times that format appeared in Q3 and Q4 top sequences). As indicated above, using that “Official” language when referring to your business is crucial for your trademark campaigns and Dynamic Keyword Insertion is critical for your non-trademark campaigns.

Table 11 Top Headline Formats from Ad Sequencing Study

HEADLINE FORMAT # OF OCCURRENCES

Official 13

DKI 9

Action TM 9

Product KW 7

TM 6

TM emotional adj. Sale 5

HOLIDAY MESSAGING IMPACT IS NOT GREAT

About 2/3 of the businesses in this study had holiday themed ad headlines including phrases like “Black Friday”, “Cyber Monday”, “Christmas”, “Holiday”, etc. Those ads did not figure significantly in conversion paths, as they were present in the paths that contributed just 6% of conversions. That share includes both non-trademark and trademark ads.

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DIFFERENCES BETWEEN MESSAGES AT THE BEGINNING VS THE END OF THE

SEQUENCE

We were curious to see if there was a notable difference between the types of messaging that appear early in the conversion path vs those at the end of the path. Table 12 lists the top headlines at the two ends of the conversion path funnel. 4 of the top 5 headlines that appeared as the last paid search ad touchpoint in Q3 were in the top 5 in Q4. Of the top initial headline in Q3, 3 of them are in the top 5 in Q4. When you compare the two positions within the same quarter, you see some interesting results. In Q3, just 1 of the first headline formats appeared in the last headline list, while in the 4

th quarter, not only do 4

of the first headline formats appear in the last headlines, they also appear in the same order. One possible contributor to this phenomena is the fact that in the 4

th quarter, trademark ads in the first position

contribute a larger share (82%) of conversions than they did in Q3 (75%).

Table 12 Comparing First vs Last Headline in Path

Q3 LAST HEADLINE Q4 LAST HEADLINE

Official Official

TM Action TM

TM emotional adj. Sale TM

Home of TM DKI

Action TM TM emotional adj. Sale

Q3 FIRST HEADLINE Q4 FIRST HEADLINE

DKI Official

Product KW Action TM

Official TM

Product KW sale DKI

TM Online Product KW

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STRATEGIC IMPLICATIONS

Here are a few key takeaways for your ad copy strategy for the end of this year:

In Table 10, you can see that in the NTM > TM sequence, the Official message format appears most frequently in the top TM headlines. One idea this suggests is to use remarketing lists built from your non-trademark campaigns in a dedicated trademark campaign that emphasizes the Official message in its ad copies.

Using Dynamic Keyword Insertion (DKI) in at least one ad copy is a must for online retailers’ non-trademark campaigns and, as the Q4 results show, should be considered for trademark as well.

To not have some kind of “Official” messaging for your own trademark ads is doing yourself a disservice, especially in the 4

th quarter. One practice we often use when we write ads for our

clients is to include the official message in both the headline and the Display URL, characters permitting.

Make sure some variation of your trademark is in your headline for all trademark ads. Add action verbs to your headlines, especially in your trademark ads for the holidays. Action verbs

are words such as “Shop”, “Order”, “Buy”, “Get”, “Find”, “Save, etc.

Use adjectives in your copy that evoke emotional responses. Instead of saying you are just having

a sale, say you are having a huge sale, or the biggest sale.

Don’t go crazy trying to cram holiday words into your Q4 ad copies. If you have room, it can’t hurt,

but don’t sacrifice your core messaging just to make those terms fit.

GOOD SELLING!

THE NETELIXIR UNIVERSITY TEAM

FOR MORE INFORMATION

Call NetElixir at 609-356-5112 or visit www.netelixir.com

Join NetElixir University on LinkedIn

Follow us on Twitter @NetElixir

For over 10 years, NetElixir has been helping 100’s of online retailers succeed in their search marketing efforts. Our services cover PPC management, SEO, Product Listing Ads & CSEs, Mobile Advertising, Social Media Marketing, Web Analytics and Google Analytics Consulting.

NetElixir University is our complimentary educational program that provides businesses with proven strategies and analytical tools for running successful search marketing campaigns. Through webinars, workshops and data-driven whitepapers, our goal is to train 10,000 businesses on the best practices of search marketing.

© NetElixir 2015 All Rights Reserved

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APPENDIX

GLOSSARY OF HEADLINE CODING SYSTEM

Here Is a glossary of the headline coding used in this study that is referenced in this paper’s content.

CODED MEANING

Official Official language such as official site, official store, etc.

TM Some variation of advertiser’s trademark terms

Action TM An action oriented phrase plus a variation of advertiser’s trademark terms,e .g. “Shop at Toys R Us”

Home of TM Some variation of the phrase “Home of” plus a trademark term, e.g. “Home of the Whopper”

TM emotional adj. sale Trademark variation plus an emotion-invoking adjective like huge, monstrous plus sale oriented terms, e.g. “Best Buy’s Monster Blowout”, “Wal-mart’s Craziest Deals Ever”

TM product USP Trademark variation plus a component of a product’s unique selling proposition (USP), such as “New Balance – In Wide Sizes Too”

DKI Included dynamic keyword Insertion. In AdWords, you can code your ad copy so that the user’s actual query gets inserted in your ad copy at points you designate in the headline, description lines and display urls. If insertion would cause character length violations, a default setting that the advertiser chooses is used.

Product KW Product keywords, could describe sku level or category level products. Does not include any brand reference.

3rd brand 3rd

party brand reference. This refers to a brand that an advertiser sells which is not the advertiser’s own brand. Can include a product keyword coupled with the brand or may not.

Action 3rd brand An action oriented phrase plus a 3rd

party brand reference as described above. “Find Reebok Sneakers Here”.

Product KW sale Product keywords, could describe sku level or category level products, combined with terms describing sale events such as “Area Rug Sale” or “Sale on Area Rugs”

% off product KW A % off discount offer for a particular product, such as “33% Off Window Covers”

Co USP The advertiser’s unique selling proposition. Phrases like “Free Returns”, “Same Day Shipping”, “No Sales Tax”.

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EXAMPLE OF AD BEFORE AND AFTER CODIFYING

Here is an example of an ad as written and as codified for our research.

AD BEFORE AD AFTER CODIFYING

Nielsen Metal Frames

Save Over 70% On USA Made Frames.

Frame Like a Pro w/ American® Frame

americanframe.com/Nielsen_Frames

3rd

brand

Action % off prod kw

Co USP

/3rd

brand