Another company that has used econometric modeling to refine its search campaign is Incorporate.com, which helps small business owners file government forms. Currently, the company uses Impaqt's modeling solutions in its keyword bidding, said Bob Baer, Incorporate.com's Internet marketing manager.
“Without statistical modeling, you can't know how each keyword is contributing to your efforts,” Baer said. “You may determine that a particular keyword never converted, for example, and you stop bidding on it. But in fact you may be cutting off something that drove someone to your site, [who] then left and then came back via another keyword or a bookmark.”
Modeling, Baer said, can help solidify this seemingly tenuous connection. It also can accurately predict the ROI of increasing or decreasing auction bids on particular keywords, he said.
“It helps us develop our price elasticity curve,” Bair said. “For example, we might increase what we're spending on keywords and see exactly how much it takes our profitability down. Alternately, it will show how many orders you're leaving on the table if you try to save money by cutting your bid prices.”
Incorporate.com plans to branch out with econometric modeling and chart the relationship between search and the company's telemarketing efforts. Here, Baer said, the technology can determine the value of certain keywords in first driving potential customers to Incorporate.com, and later determine precisely how many of these customers call his telemarketing desk to place an order.
“As with any b-to-b company, there's latency here,” Baer said. “Without modeling, you're basing your marketing budget on what you see today, without taking into account the business that may come to you later.” M