Referral engine email. Display. Paid & Organic Search. Direct Visits to company.com or. Affiliate Websites. Social M
The Long and Winding Road: Modeling the Influence of Channels in the Online Purchase Funnel Hongshuang Alice Li Doctoral Candidate
P.K. Kannan Ralph J. Tyser Professor of Marketing Science
Robert H. Smith School of Business University of Maryland, College Park, MD © Copyright 2008
Paid & Organic Search
Social Media
Costs vary Effectiveness varies
Referral engine
Direct Visits to company.com or Affiliate Websites
email
Display
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online marketing expenditures.
WordStream independent estimate based on observed marketing. 3 © Copyright 2008 Used with permission.
The model uses Firm.com customer behavioral data for rewards and non-rewards members for all online marketing channels Rewards Member Non-Rewards Member
Organic Search
Direct Visit
E-Mail
Customer 1
Referral
Display Impression
Display Click-Through
Organic Search
Customer 2 4
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Research Questions • What does the firm lose by using last-click model to understand this phenomenon? • Is there carry-over effect from repeated visits through a certain channel? Is there spillover effect across different channels? • What is the impact of consideration and the nature of marketing interventions on online shopper? • What is the incremental effectiveness of these marketing interventions in bringing in visitors and in leading to a purchase? 5
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Conceptual Model Channels Considered
Customer-Initiated
Firm-Initiated
Search, Direct, Affiliates, Referral Channel
Display, E-Mail
Search Costs
Search Costs Spillover Effects
Visit Through Channels
Direct
Search
E-Mail
Carryover Effects
Benefits Purchase At Website
Benefits
Overall attractiveness of making a purchase = f(mean attribute level of service, cumulative information content of previous visits)
The Model
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Consideration Stage For each consumer “i” we have a vector of probabilities of considering each channel q
These probabilities are vectors of consumer specific variables Ri
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Purchase Stage • Utility of purchase on a visit through channel j J
Wijn =Wijn + ζ ijn =γ ij + ∑ γ ij ,k Gikn + ζ ijn k =1
j =1, ,J Informational Stock
G= ikn
n −1
( tikn −tikh ) × − d (1 λ ) , ∑ ikh k h =1
(1- Decay Rate)
• Probability of a purchase conditional on visit and consideration Pr( Bijn= 1| Ci , Vin=
j= )
exp(Wijn / τ )
1 + exp(Wijn / τ )
,
= j 1, ,J 9
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Visit Stage • Utility in making a visit to channel j U ijn = U ijn + ηijn = β 0,ij − βij Sijn + τ I ijn + ηijn
• Specification of “search” cost
j = 1, ,J
Inclusive value
J
Sijn =
exp( µ j Tijn + ∑ µ j ,k Lik ,n −1 ) k =0 J
1 + exp( µ j Tijn + ∑ µ j ,k Lik ,n −1 )
Prior Channel Visit
,
k =0
Cumulative time spent coming through a channel 10 © Copyright 2008
Putting it all together…. • Joint probability of consideration, visit and purchase P(= Bijn 1,= Vin j | = Ci ) Pr(= Bijn 1| Ci ,= Vin j ) P(= Vin j | Ci ) • Likelihood L( B= |θ )
Ni
I
J
2 J −1
ijn = Σ × P C H α b ( | , ) ∏∏∏ ∑ i k ijn1 bijn 0
= n 1 =i 1 =j i k =1
where
B
(1− Bijn )
= bijn1 P= (Vin j | Ci ; β , µ ,τ ) P= ( Bijn 1| C= j; γ , λ ) i , Vin bijn 0 = P(Vin = j | Ci ; β , µ ,τ )[1 − P( Bijn =1| Ci , Vin = j; γ , λ )] 11
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Data • Data from a firm in the hospitality industry • Path data for each customer • 68 days time window, from June to August in 2011. • 7 cohorts of customers, stratified sample. • Information on – the customer’s rewards tier, the channels they visited, and marketing interventions they encountered. 12
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Results – Consideration Stage
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Results – Visit Stage Channels Variables Visit Stage: Intercept Search Cost INV(tau) Search Cost: Cum time Lag_natural Lag_paid Lag_referral Lag_direct Lag_email Lag_display Lag_no visit
Organic Search
Paid Search Referral Direct E-Mail (Estimates are posterior means)
Display
2.27 -1.37 0.35
1.26 -1.96
-0.92 -3.58
0.40 -3.11
-0.36 -3.58
1.92 -1.56
-0.77 -2.10 -0.79 -0.38 0.47 0.74 -0.27 1
-1.15 -0.18 -1.97 -0.13 -0.29 -0.18 -0.27 1
-0.99 -0.20 -0.19 -2.43 0.03 -0.21 0.16 1
-1.41 0.07 0.11 0.05 -1.71 0.24 -0.04 1
-0.78 -0.30 -0.49 0.12 0.19 -2.04 0.11 1
-0.79 -0.25 0.43 0.01 -0.01 0.49 -1.26 1
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Results – Purchase Stage Channels Variables Purchase Stage: Intercept Info Stock - Organic Search Info Stock - Paid Search Info Stock - Referral Info Stock - Direct Info Stock - E-Mail Info Stock - Display Retention Rate
Organic Search
-1.29 0.68 0.03 0.16 0.22 0.28 0.07 0.73
Paid Search Referral Direct E-Mail (Estimates are posterior means) -0.94 0.17 0.44 0.03 -0.11 0.61 0.16 0.62
-1.11 -0.39 0.03 0.35 0.70 -0.15 -0.38 0.57
-1.29 0.21 0.23 0.18 0.73 0.08 0.22 0.59
-1.38 -0.21 0.04 0.11 0.22 0.83 0.28 0.69
Display
-1.39 -0.12 -0.26 0.44 0.47 0.06 0.40 0.47
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Attribution Comparison
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Attribution Comparison
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PAID SEARCH COHORT 1 (11/3 BOOKERS, no paid search during last week) COHORT 1 (11/3 NONBOOKERS, no paid search during last week) COHORT 2 (12/8 BOOKERS, no paid search during last week) COHORT 2 (12/8 NONBOOKERS, no paid search during last week) COHORT 3 (10/27 BOOKERS, paid search always on) COHORT 3 (10/27 NONBOOKERS, paid search always on) COHORT 4 (10/20 BOOKERS, paid search always on) COHORT 4 (10/20 NONBOOKERS, paid search always on) COHORT 5 (11/10 BOOKERS, no paid search during next-to-last week) COHORT 5 (11/10 NONBOOKERS, no paid search during next-to-last week) COHORT 6 (12/15 BOOKERS, no paid search during next-to-last week) COHORT 6 (12/15 NONBOOKERS, no paid search during next-to-last week) OFF ON OFF
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Thursday, December 15, 2011
Wednesday, December 14, 2011
Tuesday, December 13, 2011
Monday, December 12, 2011
Sunday, December 11, 2011
Saturday, December 10, 2011
Friday, December 09, 2011
Thursday, December 08, 2011
Wednesday, December 07, 2011
Tuesday, December 06, 2011
Monday, December 05, 2011
Sunday, December 04, 2011
Saturday, December 03, 2011
Friday, December 02, 2011
Thursday, December 01, 2011
Wednesday, November 30, 2011
Tuesday, November 29, 2011
Monday, November 28, 2011
Sunday, November 27, 2011
Saturday, November 26, 2011
Friday, November 25, 2011
Thursday, November 24, 2011
Wednesday, November 23, 2011
Tuesday, November 22, 2011
Monday, November 21, 2011
Sunday, November 20, 2011
Saturday, November 19, 2011
Friday, November 18, 2011
Thursday, November 17, 2011
Wednesday, November 16, 2011
Tuesday, November 15, 2011
Monday, November 14, 2011
Sunday, November 13, 2011
Saturday, November 12, 2011
Friday, November 11, 2011
Thursday, November 10, 2011
Wednesday, November 09, 2011
Tuesday, November 08, 2011
Monday, November 07, 2011
Sunday, November 06, 2011
Saturday, November 05, 2011
Friday, November 04, 2011
Thursday, November 03, 2011
Wednesday, November 02, 2011
Tuesday, November 01, 2011
Monday, October 31, 2011
Sunday, October 30, 2011
Saturday, October 29, 2011
Friday, October 28, 2011
Thursday, October 27, 2011
Wednesday, October 26, 2011
Tuesday, October 25, 2011
Monday, October 24, 2011
Sunday, October 23, 2011
Saturday, October 22, 2011
Friday, October 21, 2011
Thursday, October 20, 2011
Wednesday, October 19, 2011
Tuesday, October 18, 2011
Monday, October 17, 2011
Sunday, October 16, 2011
Saturday, October 15, 2011
Friday, October 14, 2011
Thursday, October 13, 2011
Wednesday, October 12, 2011
Tuesday, October 11, 2011
Monday, October 10, 2011
Sunday, October 09, 2011
Saturday, October 08, 2011
Friday, October 07, 2011
Thursday, October 06, 2011
Wednesday, October 05, 2011
Tuesday, October 04, 2011
Monday, October 03, 2011
Sunday, October 02, 2011
Saturday, October 01, 2011
Friday, September 30, 2011
Thursday, September 29, 2011
Wednesday, September 28, 2011
Tuesday, September 27, 2011
Monday, September 26, 2011
Sunday, September 25, 2011
Saturday, September 24, 2011
Friday, September 23, 2011
Thursday, September 22, 2011
Wednesday, September 21, 2011
Tuesday, September 20, 2011
Monday, September 19, 2011
Paid-Search Off Field Study
10K visitors who visited on Thursday, Nov 3 and PURCHASED 10K visitors who visited on Thursday, Nov 3 and DID NOT PURCHASE ON
10K visitors who visited on Thursday, Dec 8 and PURCHASED 10K visitors who visited on Thursday, Dec 8 and DID NOT PURCHASE
10K visitors who visited on Thursday, Oct 27 and PURCHASED 10K visitors who visited on Thursday, Oct 27 and DID NOT PURCHASE 10K visitors who visited on Thursday, Oct 20 and PURCHASED 10K visitors who visited on Thursday, Oct 20 and DID NOT PURCHASE 10K visitors who visited on Thursday, Nov 10 and PURCHASED 10K visitors who visited on Thursday, Nov 10 and DID NOT PURCHASE 10K visitors who visited on Thursday, Dec 15 and PURCHASED 10K visitors who visited on Thursday, Dec 15 and DID NOT PURCHASE
• Pause Paid Search during two separate weeks in Nov & Dec 2011
• All other marketing interventions remained the same
Estimating Incremental Effects Paid Search On
Use proposed model to predict conversions during this period assuming paid search on and assuming paid search off Paid Search Off
Compare with Actuals Paid Search is Off
Actuals 19
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Incremental Effects of Paid Search • Traffic from Search channel down approximately 10% • Over half of conversions attributed to Paid Search picked up by other channels – especially Organic Search • Rest of Paid Search conversions are lost (not captured by other channels) 21
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Issues • Analysis is on historical data • Data integration and analysis in near real time • Validating the results in near real time • Marketing actions to be proactive than reactive
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Thanks Q&A
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Path Analysis
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