Following The Purchase Path To Lower Acquisition Costs

    May 26, 2009
    WebProNews Staff

The phrase “attribution model” may be a bit too industry-jargonish, and for those of us who remember parcels of information left over from late-night Psych-class cramming, “attribution” means something else entirely.

In advertising, specifically television advertising, “attribution” involves determining an ad campaign’s direct effect on sales. Before the Internet, the equation was fairly simple for involved simple before and after calculations. Online, though, branding-effect has been thought of as a kind of hard-sold voodoo; at what point in the online purchase process is the decision made? Nonetheless, as Madison Ave refocuses on the Web, the traditional ad gurus are seeking to preserve their lingo.

Adam Goldberg
Adam Goldberg

ClearSaleing founder Adam Goldberg prefers clearer terminology for the same idea: “purchase path.” Incorporating the data relationship between search and display advertising, the purchase path refers to “the chronological sequencing of display impressions, ad clicks, organic visits and direct visits that lead to conversions and/or non-conversions or abandoned paths.”

In a recent column for SearchEngineLand, Goldberg discussed another industry term: cost per acquisition (CPA—not to be confused with “cost-per-action,” which is similar). Goldberg compared the CPA of a general search keyword campaign to the CPA of a branded search and display campaign.

A keyword phrase search as “auto insurance” is a highly competitive one and may run an advertiser as high as $30 per click. A typical searcher, along certain purchase paths, may run two separate searches, each ending in a click on a sponsored ad, which brings the CPA up (in that situation only, obviously) to $60.

ClearSaleing’s data matched up with recent industry reports indicating that many consumers run branded searches after seeing a display ad. Branded search terms are traditionally much cheaper than general terms—though Google just altered its policy to allow trademarks in sponsored ads, which may raise that price—and display ads are also much cheaper. One impression, Goldman says, plus one branded click could yield a CPA of 25 cents, much cheaper than general search targeting only.

By effectively targeting both purchase paths—generic-to-branded-to-sale, branded-to-branded-to-sale—an advertiser may lower the overall CPA. It’s worth a shot, anyway, right?