Micro Marketing

What I’d like to see next.

One of the most valuable features a search engine can offer advertisers is conversion tracking. Mapping conversions to keywords and adds can differentiate the performers from the dogs. It’s the first step in optimizing for ROI.

Basically, conversion tracking is a bit of JavaScript placed on your site’s confirmation page—the page that loads when a prospect does what you hoped they would. The JavaScript fires on page load and sends data to a remoter server. (In reality it can be more complicated, including the download of additional JavaScript, but let’s keep it simple.) Typically, some conditions must be met for the script to increment the conversion count.

In the case of Microsoft’s adCenter—the tool that manages ads for Live Search—those conditions include a browser cookie set by Live Search within the previous 7 days and successfully mapping the cookie to an adCenter campaign. If any of those conditions aren’t met, if the cookie is older than 7 days or was deleted entirely, the conversion won’t be counted.

A conversion mapped to a keyword in adCenter’s reports is useful but begs the question—what was sold, how many, how much and what was it worth to me?

Here’s my wish list of additional information captured by adCenter’s conversion tracking script.

Product SKU

First you need to know which products are selling. The fact that a keyword resulted in a conversion is interesting, but for ecommerce, you really want to know what product sold—tennis ball or bowling ball?

Sale Price

What price did you sell the ball for?

Quantity

How many balls did you sell the customer?

Product Margin

From the perspective of ROI, this is where the rubber meets the road—or the ball meets the pin. Obviously, not all products are equally profitable. The sale of a tennis ball will make you less money than the sale of a bowling ball, presumably. A keyword that results in the sale of a high margin product is worth more to you than one with little profit. Your keyword bidding strategy ultimately depends upon the keyword’s margin—the profit earned from conversions associated with the keyword.

Optimizing for margin requires that you know the margin for each product you sell. That can be a taxing effort for many companies. Often the margin is only roughly approximated or generalized across products. The closer your approximation approaches reality, however, the more accurately you can tune your search advertising strategy.

Discounts

Were any discounts applied to the sale? Discounts affect the transaction’s overall profitability.

If your site offers free shipping—and that’s becoming the cost of entry for most ecommerce sites—then you’ll need to deduct the cost of shipping from the transaction’s profit.

Tax

Just so can break out the amount from cost and profit.

Bottom Line

If adCenter’s conversion tracking incorporated my entire wish list, it could accurately report not only the margin for each transaction but the margin for each keyword. No more wondering about the ultimate value of a keyword, an ad group, or even a campaign.

Technorati Tags: Microsoft adCenter,search engine advertising,conversion tracking,tracking scipt,optimizing for margin,optimization,Charles Thrasher