More On The New Time Lag: Not Your Father's Metric Any More

In Part 1 of this article I discussed how today's more sophisticated online consumers -- coupled with today's more multichannel marketers -- have created a marketing ecosystem where the traditional definition of "lag time" is no longer sufficient.   Simply put, limiting one's analysis to the time between the last interaction with an online display ad and an eventual conversion, is like putting blinders on -- effectively ignoring other "time factors" such as:

·       Time lag from First Impression to First Conversion

·       Time lag from Last Impression to First Conversion

·       Time lag from First Click to First Conversion

·       Time lag from Last Click to First Conversion

·       Time lag from First Website Visit to First Conversion

Picking up where we left off, there can be actionable findings in examining each of these factors.  For example, imagine that median time lag from first impression to conversion is 37.02 days -- meaning that 50% of your converters saw their first ad impression before 37.02 days and 50% had it after 37.02 days.  The takeaway from this finding is that the users who eventually converted are those with whom you have been having a dialogue for a while. They didn't just see one piece of creative and decide they wanted to be your customer, but your prolonged engagement with them contributed to their eventual conversion. Now imagine, it is not 37.02 but 3.12. In converse, this would indicate that the consumers you convert are ones with whom you just started engaging and were converted by a tactic that's reaching them just as they are making their final decision.

What this means from an optimization standpoint is that your online display ad campaigns are contributing towards achieving your direct response goals, so plan and communicate with them holistically.

Next let's look at time lag from first click and last click. If the number of converters who click is small, then you can essentially ignore this metric. But suppose a significant number of your converters had a click in the path prior to conversion, then you can use this metric to understand users' propensity to convert in the first or last session compared to subsequent sessions and design their online experience appropriately.

But the most important of these time factors is the time lag from the first website visit to the conversion. This has essentially replaced the traditional last ad based time lag as the indicator of user intent.  Look at this marker carefully.  Suppose that the median time lag from first website visit to conversion for a universe of consumers is just under an hour, meaning half your converter population converted in their first visit to your site and the rest came back for their successive visits to convert.  This behavior is ripe with segmentation-based optimization possibilities. Are there two consumer groups -- instant gratification consumers and deferred gratification consumers?  Are there publishers who refer users who convert right away? Who are the publishers who refer users with the shortest time lag to conversion? What is the creative that generates shortest time lag to conversion?

The key, however, is to look at the ads that referred the first visit and not the last visit, which requires some fundamental touchpoint attribution analysis.

No, time lag is not your father's metric any more.  All five of the time lag metrics discussed here need to be calculated and analyzed in order for you to make the most informed optimization decisions possible.  Using the outdated last ad measurement model will result in lost opportunities and investments unwisely spent.

1 comment about "More On The New Time Lag: Not Your Father's Metric Any More ".
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  1. Mark Hughes from C3 Metrics, April 19, 2011 at 8:51 p.m.

    Great stuff. We call this the "vintage" issue...not letting data appropriately age until it's time.

    Some analogies, data, and results here:

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