Conversion Value Model

In our conversion value model, ideally, the conversion value is equal to the gross margin (value) that particular conversion action is creating. In the case of a video campaign that advertises products, the conversion value would likely be (sales price-sales tax) * (average gross margin).

When a marketing attribution modeling is used, the value for each conversion is distributed (“attributed”) up through the sales funnel, with weighting as defined by the best click attribution model for that event.

Calculating Conversion Value For Lead Generation Campaigns

For a video campaign advertising a services business (a lead generation campaign) we use a finite planning window, e.g. 1 year. We then calculate the average value of a converted customer over the planning window (e.g. 1 year). The formula Conversion Value = (average value of a converted customer) * (avg. close rate of leads).

Conversion value modeling is important because it allows for calculating the two most important metrics in paid search: return on ad spend, and advertising margin. But more importantly, it provides valuable information back to the automated bidding algorithms, which uses machine learning to maximize the performance of the campaign.

Selecting An Attribution Model For Video Campaigns

For click attribution modeling, we look at the length of the sales conversion process for your market. If there is display campaign history in Google Analytics or in the PPC account, we mine that data to fit a click attribution model to the display campaign. This way we can gain more attraction and traffic for current and previous campaign history.

There are articles on this site about the click attribution, an important tool for driving strong campaign performance. This is especially for video campaigns running automated bidding, which control the bids “at auction time”.

More:  Our blog articles on automated bidding, conversion tracking, conversion tracking value models