Measuring the Lifetime Value of Customers Acquired from Google Search Advertising
Chan, T. Y., Wu, C., & Xie, Y. (2011). Marketing Science, 30(5), 837–850.
Plain-English take: Customers acquired through Google search advertising had higher transaction rates than customers from other channels in this study. For your marketing: Track customer lifetime across channels when estimating paid-search value.
Question: How should firms estimate the long-term value of customers acquired through paid search, including purchases that occur offline?
Design: Customer-level longitudinal lifetime-value model. Customers of one small U.S. firm with multichannel purchases; the abstract does not report customer count.
Customers acquired through Google search advertising had higher transaction rates than customers from other channels in this dataset. Including future purchases and offline spillovers produced substantially higher customer values than the conventional method used for comparison.