Agencies: Use the RFM Method to Get Clients to Read and Act on Your Analysis

It’s Sunday night and you’re stuck in Excel. You’re pulling in CSVs, pasting data from 5 different sources and tweaking the charts to get them just right.

Welcome to the world of paid search reporting. The standard analysis model today relies on heavily on human power to gather, collate and graph data before you even have the time to analyze it.

It’s no wonder dashboards are so maligned.

Clients love to get reports upon reports, but how many of them actually read them before your status calls? It’s the actions you take based on your analysis that drive client satisfaction, contract renewals and referrals for new business. The rest just burns your margin and eats up hours you could be spending optimizing and expanding. And, really, who likes assembling data?

There’s a better way to report.

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RFM: What Direct Marketing Can Teach Us About Reporting

RFM analysis is a classic direct marketing technique. It stands for Recency, Frequency and Monetary value. Your best customers are those who

• Spend the most (monetary value),
• Buy repeatedly (frequency) and
• Have purchased in the near past (recency)

That same technique applies to your analysis and reporting.

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Recency

Data has an expiration date. Its value decays at two key points:

It’s not uncommon to report on the previous month’s numbers on the 15th of the following month. A lot can happen in those 14 days.

Here’s a great example: A friend of mine recounted how his brand campaign burned over $20,000 in a single weekend after one story generated huge press buzz. Catching those fast rising keywords early would have kept a lot of unqualified searchers from clicking and saved the budget.

Optimization is like investment: it has a compound return and earlier is better.

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Pacing: The Canary in the Coal Mine

Keeping your clients’ accounts on budget and on target to hit goals is job number one. If everything is humming, you can continue on plan. If something is amiss, you need to drill down. This is where pacing reports help.

A pacing report tells you how likely you are to hit your goals. First, set your goals:

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Each time period (say, a week), you report on that week’s performance against those KPI’s:

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Then, you add the context of results-to-date vs. those goals:

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Next, and most important, you project the likely performance for the end of your time period (say, a month):

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Start with the simplest projection. Take the average daily results for each KPI (ex: 10 leads per day, $200 spend per day) and multiply it by the number of remaining days in the month.

Here I built a pacing report with ClickEquations Analyst, our Excel tool:

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Every week I refresh the report automatically with the Quick Change palette. Pacing is a great snapshot to put in a cover letter or at the top of your dashboards. No matter what tool you’re using, this report is great for Account Managers and SEM Practitioners to keep a pulse on clients.

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The Top 10 Sucks: Fast Rising Keywords And Campaigns

Most analysis focus on the top 10 of any given segment: campaigns, ad groups, keywords. The problem is: the top 10 of anything rarely changes. Worse yet, it often masks spikes or drops that have a real impact on your ability to hit goals.

Avinash Kaushik, author of Web Analytics 2.0 and member of our Advisory Board, said it best in this post:

While we obsess about our brand terms and our top ten key phrases the reality is that the long tail of search means that our organic and search campaigns focus on tens of thousands or hundreds of thousands of keywords.

One effective strategy to deal with this purely data problem is to focus on what’s changed.

No more data pukes. Just looking at things that need attention.

Did a brand term suddenly go through the roof after a news story? Did your clients’ conversions tank in one ad group after a competitor introduced a new promotion? Pacing reports give you a high level pulse. What’s Changed reports help you diagnose what’s propelling you towards your goals or keeping you from them.

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Focus on What’s Changed

A What’s Changed report has 3 components:

1. Segment
2. Metrics
3. Time Period

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1. Segment

You can analyze any segment you want, but it makes sense to start at the keyword and ad group.  Any changes in the Campaign level are only going to send you digging deeper anyway.

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2. Metrics

There are two types of metrics to consider: diagnostic and outcome.

• Outcome metrics are the same type you’d put in your pacing report: the business goals of your client (spend, leads, ROI, etc.).
• Diagnostic metrics are signals about the quality of your account: Clickthrough rate, Quality Score, etc.

For your first what’s changed reports, sync up the metrics you use in your pacing report. That way you can connect the high level trends with which pieces of your account are driving them.

At the keyword level, especially, it’s a good idea to keep an eye on CPCs in your What’s Changed analysis. You’ll be able to catch runaway keywords and analyze search queries more quickly, so you don’t stray too far from goals.

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3. Time Period

The change in any of your segments is simply one time period over another. It can be day over day, week over week or even before and after a special promotion.

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Using What’s Changed Data

What’s Changed analysis is best for regular analysis and optimization and you should look at them at least once a week. If your clients’ accounts are more volatile, adjust your time period accordingly.

We’ve built What’s Changed data into the ClickEquations interface as part of our account dashboard, so you can see keyword, ad group and campaign trends:

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You can create your own version in Excel with any combination of segment, metric and time. For example, we created a What’s Changed? Dashboard that we ship to all clients. It automatically pulls the data, formats it and highlights the Campaigns and Keywords that are rising and falling the fastest for the time period judged by Revenue, Gross Profit and Average CPC.

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Don’t include What’s Changed in dashboards or presentations, that will just contribute to report bloat. Instead, review them and highlight the meaningful data, what action you took based on the data and the results. That’s much more valuable. For more background on What’s Changed? reports, check out our blog post.

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We’ll tackle Frequency and Monetary Value in a future article. If you’re not already subcribed to our newsletter.