CASE STUDY

How to determine optimal mkt

mix using a Multiple Regression

Model

Agenda Questions that needed to be addressed

• What major trends can you discern from the data?

• What relationship is there between paid search and organic search?

• Please explain any anomalies or inconsistencies you see in the data.

• Which marketing channel (paid, affiliate, display, aggregator) do you

think is most effective at driving sales and why? Please include internal

marketing banners as part of your analysis. Assume all external media

is equal in terms of cost per visit and all internal banners are effectively

free.

• What would you recommend to help increase sales?

• Anything else interesting that you see within the data.

Snapshot Seasonal Trend for HP and Prod1

Channel Visits

Declining CTR Qualities rather than Quantities

Metrics

Avg. Weekly Visits (Channel) 23,393

Avg. Weekly Visits (Funnel) 6,275

Total Annual Sales 36,607

Avg. Weekly Sales 704 (508)

% CTR 11%

Recommendations

Prod1 Sales f(x) = 𝟗𝟎. 𝟖 + 𝟎. 𝟑𝟒 𝑿𝟏 + 𝟎. 𝟎𝟕 𝑿𝟐 + 0.2 𝑿𝟑

Constraints being:

1.7 K ≤ 𝑋0 ≤ 2.2K

1 K ≤ 𝑋1 ≤ 1.3K

1 K ≤ 𝑋2 ≤ 2K

750 ≤ 𝑋3 ≤ 1.2K

Where:

𝑋0 = Organic Non-Branded Search

𝑋1 = Paid Branded Search

𝑋2 = Aggregators

𝑋3 = Other External Referrers Sites

690 Sales pw

Any policy that increases Organic Search over 2.5k but down 3.75K visits pw will create a detrimental

effect over Prod1 Sales. For value over 3.75K the growth ratio will be 72:27. Organic Branded Search

follows a too random path.

Paid non-Branded Search negatively affects Prod1 Sales both directly (negative covariance) than

indirectly creating an unwanted raised on aggregators, affiliates and display campaign associated costs.

Affiliate contracts need to be reviewed as a matter of urgency. Only level of visits lower than 750pw

won’t negatively affect Prod1 Sales.

Any In-House Adverts produced a negative impact on Sales and it’s likely to deteriorate our customers’

experience.

Display Campaign and Direct Entries trends are directly related to other advertising tools, likely to

represent duplicate prospects.

Other Recommendations Hitches & Solutions

Entries By Channels

Step1 Funnel By Channels

Sales By Channels

Entries From All Channels

Step1 Funnel Visits Total Sales

Calculus An Explanation of the Results

Search Organic

Top Sales for values between 1k and 2k

or 3.7k and 4.5k Insights

Independent variables

• Organic Search Visits are likely to generate

sales for value in the range of either 1K to

2K or 3.7K to 4.5K.

• Increasing the Visits from Organic Search

negatively affects Step1 Apps Visits and it’s

likely to skew %CTR.

• The relation between organic search and

Total sales is 72:28for value over 3.7K.

Search Organic Branded vs. Non-Branded

Optimal Values between 1.75K and 2.25k Insights

Too random

• Visits from Organic Non-Branded Search

rather than any other organic search

channel are more likely to generate Prod1

sales.

• 3 in 4 of those sales are likely to be “e-

signature” sales.

Search Paid

High Level of Paid Search will

negatively affect Prod1 Sales

• High Level of Paid Search might negatively

affects prod1 Sales for value over 2k.

• This is due to the increasing percentage of

budget being spent on Non-Branded Paid

Search that has a negative covariance with

all Sales options but the most expensive “at

home” printing.

Insights

Search Paid

Top for values in the range of 1k to 1.3k

• Tot Sales Prod1 is optimal for values of

Branded Search between 1k to 1.3k.

• Increasing ad spend in Paid Branded

Search will increased Tot Sales, whilst

decreasing our affiliates spending.

• Visits from Paid Branded Search are less

likely to include an interactive action with in-

house Advertising.

• Increasing Paid Branded Search ad Spend

will also generated slightly less costs

associated with Aggregators and Display

Campaign.

Insights

Search A Comparison

• Organic and Paid Search are independent.

(slightly negative for higher value of org.

search)

• Increasing Paid Branded ad Spend will also

produce a benefit effect over Org. Non-Branded

Search enhancing this channel sales.

• Increasing Org. non-Branded Visits will also

help us in limiting affiliates, aggregators and

display adv spends.

Insights

Marketing Affiliates

Sales increased with visits < 750 pw • Entry Visits from Affiliates are the least likely to

produce sales compared with other MKT

channels.

• Increasing ad Spend on Affiliate marketing will

deteriorate our organic search positioning

(especially Non-Branded) and is likely to

produce a counterbalance growth in our

aggregators cost per visits.

• Visits from Affiliate will also generated additional

Step1 Apps visits and thus flattering our %CTR.

Insights

Marketing Aggregators

Aggregators (Visits range 1K to 2K)

• Visits from Aggregators are more likely to

conclude with a e-Signature Sales .

• Increasing aggregators costs per visits will lead

to increased to paid non- branded and affiliates

costs per visits.

• Maintaining Aggregators entry visits in the

range of 1k to 2k per week will also lead to a

potential increased in Direct Entry Visits and so

to an increased in additional sales at no costs.

Insights

Marketing Other External Referring Sites

Top Values: 750 to 1.2k

• Increasing Visits from Other Referring Sites

will lead to Increasing entries via Search

Engines.

• Additional entry visits via this channel is

likely to positively affect e-signature sales.

• Optimum values in the range 750 to 1.2k.

Insights

Marketing Other External Referring Sites

Other External Referring Sites

• For value over 1K will probably negatively

impact aggregators (that has a better

conversion rate) and affiliates entries.

• Nonetheless, for value over 1k will act as

Organic Non-Branded Search spin-over.

Insights

Marketing

Internal Referrers

Internal Display Ad

• Internal Referrers impact negatively on

Sales target for any values but around 6K.

• Nonetheless, Sales via this channel are

likely to be “home printing”.

• Whoever navigate via Internal referrers is

also more likely to engage with any Internal

Display Ad.

• It has a typical hyperbole curve.

• Has the highest negative covariance with

both Total and e-signature Sales.

• For a better understanding how its variation

influence sales, we need to test its

effectiveness according to its location on

site.

Insights

Marketing Others

• Data are too random to have a clear

pictures.

• It has high impact on Paid non-branded

search, affiliates and aggregators.

• Although it has a positive covariance with

Prod1 Sales this might be due to a kind of

cannibalization effect.

Insights

• Direct entries increased in the same

direction of aggregators and paid search.

They are probably duplicate prospects.

• It has high impact on Prod1 Sales, but it’s

more likely to driven both home/central

printing rather than e-signature sales.

Inconsistencies

Major Issues Hitches & Solutions

67-Week Timeframe reduced to 52-week for behavioural & Trending reasons.

Missed or inconsistent data (e.g. Tot Sales Prod1 figure omitted in cell 36) resolved: Last 4 entries for Tot Org. Search Entry Visits didn't match the sum of Branded and

non-Branded Org Search Entries due to a bad tagging issues now resolved.

Missed entry for Paid Search (All) in Cell 30 (and errors in Cell 20 – or weeks 20/10/08 and 27/10/08) – resolved comparing Atlas and Google AdSense stats for the same period.

Missed entry for Internal Referrer for the week 26/05/08 – compared stats with log-file and applied best-fit methodology.

Total sales Prod1 data missed – highly correlated with Visits to Step1 Apps – used regression modelling, double checked results using log-files.

Sales (at home printing) data missed to: proportional methodologies using Sales central printing stats.

Inconsistency in trend for External Referrers during the first 4-5 weeks – solved used best fit modelling.

Inconsistency with Affiliate and Aggregate figures (from Oct to Jan) due to bad tagging – solved comparing Atlas data and applying best fit methodologies.

Still some issues unresolved (high level of Avg. Delta on Median) due to overlapping stats

Inconsistencies Some Examples

Inconsistencies Some Examples

Inconsistencies Some Examples

Q & A ?