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CTR sure, but how to calculate per customer?
An ugly little math problem I can't wrap my brain around
RockyMtnRR

Msg#: 6403 posted 3:00 pm on Apr 28, 2005 (gmt 0)

So in my JWB (Job With Boss) I'm trying to do some analysis of advertising on our site.

My problem is thus:
I can generate a CTR based upon (Clicks/Views) but the trick is, a given Unique Visitor/Customer looks at X number of pages.

How can I calculate a single customer's chance to click on a link at some point during their visit?

Ideas I've toyed with:
Calculate the customer's chance to click like compound interest, where each ad view will siphon away CTR% of the remaining customers. The trouble is this produces a very high percentage that I have touble trusting.

I considered just pretending the CTR was interchangable with Customer Click Rate. This seems somewhat reasonable, but it means I'm assuming there's no additional effect to multiple pages...

So, any suggestions for calculating for a gustomer are more than welcome, and for that matter any links to a good reference for this sort of thing are welcome.

Thanks,
RMRR

varya

Msg#: 6403 posted 5:37 pm on Apr 28, 2005 (gmt 0)

Are you wanting the conversion rate per unique visitor, or the probability that any given unique visitor will click on an ad sometime during a visit?

They're different math problems.

RockyMtnRR

Msg#: 6403 posted 6:04 pm on Apr 28, 2005 (gmt 0)

Conversion I can do.

I'm hoping to figure out the probability of a unique visitor clicking on an ad at some point during their visit. Armed with that, I can how many unique visitors will follow the ad off the site.

(As to figuring out how many of those customers come back to the site, I'm clueless and haven't even begun to tackle the problem.)

Based on that, I can show how many non-buyers do something that'll make us some money (X) and how many buyers we lost (Y).

So then if the Revenue(X) we gain is greater than the Revenue(Y) we loose, I can say Ads are good. Conversely if we loose a bucketload of sales, but don't make enough on ads to cover it, I can say "Ads is Bad."

So it's pretty elementary, other than the tricky part of figuring out how many people won't buy stuff.

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