An Axtria client, a leading retailer, is using multiple marketing channels such as SEO, SEM and EDM campaigns. However, the cross channel effects and ROI from SEM are unclear. We implemented a three step analytical framework to put a continuous optimization paradigm into place which improved ROI of search engine marketing.
Specifically, the client is spending $2MM/month on over 1,000 keywords, without a clear idea of the spend netting positive ROI or being optimally allocated among keywords. Data available on click through rates and conversion rates by key word, bid prices and cost per click for each keyword is not being effectively harnessed in order to guide ongoing real-time bidding policies.
Axtria’s team implemented a three step analytical framework that included: modelling of sales attribution to keywords, determining keyword profitability and optimal bid prices as well as optimal allocation of SEM budget across multiple keyword classes.
We attributed sales to clicks on individual keywords through cross channel marketing effectiveness measurement analytics. Percent of sales attributed to a click was a function of various factors such as branding spend and effectiveness, incidence and effectiveness of cross channel marketing campaigns, number of days between click through and conversion etc.
Models were developed to quantify the relationship between Bid Price and Click through Rate and determine the profitability for each keyword.
The analysis suggested that about half the keyword-bid combinations being used were unprofitable or leading to zero sales. A continuous optimization paradigm was included along with a seasonal keyword rotation strategy.
Our optimization recommended pruning the number of keywords down by about 30%, as well as readjusting bids in order to make some keywords profitable. As a result, spend shifted away from non-profitable and no-sales keywords to profitable keywords. On the basis of our recommendations, client rotated keywords based on seasonality and profitability trends to improve traffic by 19% and profitability by 4%.