When it comes to online advertising and tracking conversions, the first click is often just as important as the last click. And sometimes, it’s not even about clicks per se. But unfortunately many advertisers only track the last click.

Google is hoping to change that for AdWords advertisers with a new feature it introduced earlier this week called Search Funnels.

Available to AdWords advertisers who have activated AdWords Conversion Tracking or who are importing goals and transactions from Google Analytics, Search Funnels provide a means for advertisers to view the searches that lead up to a conversion.

Google provides a hypothetical example of how Search Funnels reporting works:

An online vacation service called Flyaway Vacations is running AdWords campaigns for vacation packages in Hawaii. Their ads link to a site where visitors can book any or all parts of a package that includes flights, a hotel, car rental, and surf lessons. Suppose that on March 10 someone searched for “hawaii vacation” and clicked on an ad for Flyaway’s Hawaii package. A click was registered in their AdWords account. Then, two days later, the same person searched for “flights to hawaii” and saw another ad for Flyaway, but didn’t click. An impression was registered in Flyaway’s AdWords account. Finally, three days later, the same person searched one more time, this time for “flyaway hawaii.” This time they clicked the ad, visited the site, and purchased the Hawaii vacation package.

Instead of showing only a purchase conversion for the “flyaway hawaii” keyword, Search Funnels will show an assist click for the keyword “hawaii vacation” and an assist impression for the keyword “flights to hawaii”.

Additional reporting features available through Search Funnels include Path Length (the “average number of clicks and impressions prior to conversion“) and Time Lag (“the amount of time it takes a customer to convert after seeing or clicking on your ads for the first time“).

This is all good stuff and AdWords advertisers who aren’t looking at the funnel right now because they’re either unaware of its importance or don’t have the technical capacity to do so should take a close look at Search Funnels at their earliest convenience. Internet users are increasingly sophisticated, and it would be naive to assume that the big picture be ignored in favor of a simplistic analysis of last clicks. In short, being aware of the funnel and taking a look at what’s taking place in it is crucial to advertisers hoping to maximize search ROI.

Making advertisers aware of the funnel and getting them to pay attention to it is also important to Google. The new Search Funnels reporting functionality isn’t simply being offered for the advertiser’s benefit only, of course. Google has a lot to gain too. If advertisers can see that keywords producing lower last-click conversions are actually contributing to conversions, they’ll be far less likely to remove those keywords from their AdWords campaigns. What would have otherwise resulted in loss of revenue to Google could conceivably result in increased revenue as some advertisers may boost spending on keywords that don’t produce last-click conversions but that are nonetheless contributing to them.

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