Conversion Explained

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smec – Smarter Ecommerce

Google’s Delayed Conversions Explained

Have you ever heard about delayed conversions? If not, you definitely should keep on reading! Imagine you have to do an ad-hoc report about the latest figures of your Google AdWords or Shopping account. This blog post will help you to prevent misleading comparisons between time ranges by explaining Google’s “last click wins” concept and how you can do it in two easy steps.

Tl, dr:

  • This blog post helps you to understand Google’s “last-click-wins” concept and the 30 days cookie lifetime.
  • Learn to create you own estimate based on Google AdWords attribution data.
  • Use your new knowledge when making ad-hoc reports including last 30 days.

Step 1: How Google cookies work and what delayed conversions are

To understand delayed conversions, we will have to understand what happens technically during the online shopping process. When a customer clicks on an ad, a cookie is saved on the customer’s device. This cookie helps Google to be informed if a customer has clicked on an ad in the past. The lifetime of this cookie is 30 days (you can adjust that in your Google Adwords Account), but the cookie can be updated and the lifetime starts from day zero when the customer clicks on another ad.

Thus, like an airplane or bus, conversions can be delayed.

Why does that matter to my Google AdWords and/or Shopping data? Say you want to analyze your data from the weekend on Monday or Tuesday. You will miss conversions and revenue in your Google reports when analyzing too soon.

Take this example: A potential customer clicks on your Google Shopping ad on Friday. If the potential customer converts to an active customer and purchases the product or some other products. In general, if the customer converts, the following three cases can occur:

Case A: The customer purchases right on Friday

This case should be clear, the conversion happened on the same day as the click. It doesn’t matter if the customer buys the advertised product or another product or even more products given it happens the same day. The conversion and the order value will be assigned to Friday.

Case B: The customer comes back later and purchases within 30 days (the lifetime of the Google Shopping cookie)

This conversion will also be attributed to Friday. As it not happened on Friday but later, it is called a delayed conversion. If no other ad from your AdWords Account is clicked until the customer purchases and the transaction takes place within 30 days, this click wins. Thus, the order value will also be assigned to Friday. Remember Google AdWords counts on a “last-click-wins”-basis. If there is already a conversion on Friday and another one on Sunday (with no additional ad click), both will be attributed to Friday.

Case C: The customer searches again via Google and clicks (at least) one more time on a Google Shopping Ad. The actual purchase happens after the second click.

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This case isn’t a Friday conversion anymore. Google now updates the cookie after the second click on Sunday and the cookie will live for another 30 days from that day. According to the “last cookie wins” concept of Google Shopping, the conversion as well as the order value will be assigned to the day of the last search query including an ad click before the purchase. If that would be the case on Sunday it is a direct conversion, if it happens later than Sunday like in the illustration above it is also a delayed conversion.

Remember: if you compare different time ranges make sure that the latest used data is at least 30 days in the past. Otherwise you underestimate the past 30 days as delayed conversions can still occur. Or, you can estimate your delayed conversions using step 2.

Have you already tried Whoop! ?

Step 2: How to create your own estimate based on Google AdWords Attribution Data

You are able to get a pretty good estimate of the delayed conversions following up during the 30 day cookie lifetime right in the Google AdWords Interface.

To accomplish this, just log in to your account and select “attribution” via “tools” in the main navigation bar of Google AdWords (as you can see in the screenshot below).

Then choose “time lag” at the navigation panel on the left and choose a timeframe for your analysis. We strongly recommend using a timeframe between 3-6 months or even more to get more robust results.

Please select “from last click” to get the needed data. In our example 84.53% of the conversion value happens on the day of the last click. That means 15.47 % of the total conversion value will be recorded on the succeeding 29 days. To make an assumption about the final conversion value after 30 days cookie lifetime just divide 15.47% by 84.53% to get your factor for the follow up conversion value. In our case that would be 18.3%. So if you record 1.000 Dollars of conversion value for yesterday you can expect about 1.180 Dollars of conversion value after expiration of the cookie lifetime.

See our other Blog posts on this topic here (Black Friday Race 1), here (Black Friday Race 2) and here (Black Friday Race 3).

Stay tuned for more interesting news from our “Whoop!” Data Science department. Keep following us!

AD-DA conversion explained

Greg Wurth explains how an analog-to-digital and digital-to-analog converter works. He mentions that there are a lot of details regarding formats such as sample rate, bit depth, and file formats and they all have an overall effect on the quality of conversion. He points out that the decision to use any of these particular formats is mainly based on the particular project at hand.

– [Instructor] As we discussed in chapter one on microphones, we learn that they convert acoustic energy into electrical energy for use with a microphone pre-amp. Analog-to-digital conversion is similar in that it converts the electric energy from the output of the microphone pre-amp into digital data that can be stored onto a hard drive of a computer. Digital-to-analog conversion is the exact opposite process in that it converts the digital data back to the analog format. There are many variables that dictate the quality of the digital signal, some of which are sample rate, bit depth, and file format.

Sample rate is the amount of snapshots or samples taken of the signal. The way that we measure this is in hertz per second. The standard sample rate that is used for CD format is 44.1 kilohertz, or 44,100 samples per second. Common sample rates used in professional studios are 44.1, 48, 88.2, 96, and 192 kilohertz. The higher the sample rate, the more snapshots are taken, which capture a more accurate representation of the original audio.

The downsides to this is higher sample rates generate a much larger file size, and also require more CPU power. Bit depth is a reference to the amount of bits that represent one sample. The standard CD format is 16-bit. It is very common to record a project at a higher sample and bit rate, such as 96 kilohertz 24-bit, so that the degradation of quality when converting down to CD format is minimal. As technology advances, we are actually able to record at 32-bit and higher, which like sample rates will increase in quality but also file size.

There are many audio file formats that exist, but I will go over the ones that are most commonly used in recording studio environments. When working on a project, we are mainly using uncompressed files, which are full resolution recordings. The most common are .WAV and .AIFF. WAV is perhaps the most common format because of the ability to embed metadata into the digital files. AIFF is mostly known for being used on Mac computers. Other than the difference in certain features, the audio quality is identical between the two.

Common compressed formats are MPEG, MP3, FLAC, and Apple Lossless Audio Codec. The reason to create a compressed audio file is for the need to shrink the file size for use on the web, or for a consumer to save space on their hard drive. Generally, these suffer a loss of quality as they have lower sample and bit rates. But FLAC and Apple use a special codec that helps preserve the original source as much as possible, while effectively reducing the file size.

With the price of hard drives drastically dropping, there’s becoming much less of a need to shrink the size of the files. There are several companies offering high-resolution audio, allowing the consumer to own 96 kilohertz or above versions of their favorite records. Aside from the above variables, there’s also the A-to-D and D-to-A unit itself that has a major effect on how accurate the signal gets converted. Most converters are designed with the goal of being as transparent as possible, but there are other products that are quite the opposite.

There are a large amount of people in the industry that will always prefer the sound of their old tape machines, that agree they will never compete with the convenience attached with working in digital. Companies like Crane Song and Burl Audio have risen to the task of creating such a product that caters to those that want to get some analog color out of their converters.

Dynamic Currency Conversion Explained

Swati Iyer – July 26, 2020 July 25, 2020

What Is Dynamic Currency Conversion?

If you have ever made purchases with your credit card while travelling abroad or even while shopping online on an international website, chances are you have experienced Dynamic Currency Conversion (DCC), even if you were unaware of it at the time. In most cases, DCC can be detrimental to your financial health, so you will be better served if you understand its dynamics (pun intended!), and how it can affect your foreign budget.

Put simply, DCC is a financial process that allows credit card holders to choose to pay for their purchases in their home currency at the point of interaction with the merchant. DCC, which is offered by merchants ( not credit card companies) and is usually managed through third-party operators, converts the cost of the transaction into the purchaser’s home currency. This is why DCC is also sometimes known as Cardholder Preferred Currency (CPC).

Read on to know more about Dynamic Currency Conversion and how this information can help you make more informed decisions while travelling and shopping abroad.

How Does DCC Work & What Does It Involve?

Consider this simple example:

Suppose you are an Indian citizen travelling to Australia on holiday.

Your home currency = Indian Rupees (INR)

Foreign currency = Australian Dollars (AUD)

While window shopping, you see a winter coat that you just have to buy (or so you tell yourself!). You take your selection to the checkout counter and the friendly Aussie operator rings up your purchase. You then present your credit card (which is drawn on an Indian bank) to the operator and she offers to add DCC to your transaction.

At this point, she may show you two different bill amounts, one in INR and the other in AUD. The AUD value is not the actual value of your purchase, but rather the DCC value based on the day’s exchange rate, with fees and charges added to the actual bill.

You want to avoid the hassle of checking the exchange rate, comparing the two presented values and figuring out which one is cheaper for you. You prefer someone else to take care of the Math, so when presented with the DCC option, you assume that DCC will make your life easier and therefore say ‘Yes’. You probably tell yourself: ‘There can’t be that big a difference between the INR and AUD values, right? I might as well just opt for DCC and pay in the currency I am more familiar with (i.e. INR)’.

But when you get your credit card bill a few weeks later, you decide to do the Math you avoided at the time of purchase. To your surprise and mortification, you find that the final amount has been calculated using a currency conversion rate that is higher than the actual going rate, with pretty high currency conversion and DCC transaction fees tacked on to the final bill. The end result is that you end up paying much more in INR than you would have in AUD, had you declined DCC.

Does DCC Provide Any Benefits At All?

Yes, DCC can prove advantageous in a couple of ways, depending on the currencies under consideration, the prevalent exchange rate and your luck as well! here are a few benefits of DCC:

DCC locks in an exchange rate at the time of making a transaction. This rate is based on a wholesale interbank rate with additional ‘markup’ (i.e. margin) applied. This differs from the exchange rate offered by the card issuer, which is only applied to the transaction on the day it is processed, which could be many days or weeks after the day of purchase, and not on the day of the purchase. During this period, the rate could potentially change ( here and here are two good articles on exchange rates, their types and how they are determined) and that’s why you see a higher charge on your credit card bill and end up paying more. Thus, at the time of purchase, you don’t have to do your own Math because you know exactly how much you are being charged in your own currency, so opting for DCC could get you a better exchange rate than the other options on offer.

2. Exchange Rate Transparency

If you opt for DCC and it is applied to your purchase, the currency conversion is done by the merchant or the third party DCC provider at the point of sale. Unlike a credit card company, a DCC operator is required to disclose the exchange rate used for conversion at the time of the transaction and not a few days or weeks later.

Most people are able to better understand prices in their own currency, so the apparent convenience and transparency of DCC can make it easier for travellers to keep track of their foreign budgets and expenses.

In most cases, however, the biggest benefit of DCC is enjoyed by the merchant and third-party DCC provider. They determine the exchange rate that is applied to the transaction so that they both benefit from the margin applied to the wholesale interbank exchange rate.

The above advantages aside, individuals should also be aware of the disadvantages and pitfalls of opting for DCC while making foreign purchases. These disadvantages are covered in the next section.

What Are The Disadvantages Of DCC?

1. Incomplete Transparency

The words ‘incomplete’ and ‘transparency’ might seem somewhat oxymoronic, but this is actually one of the biggest problems with DCC. Although the final exchange rate is disclosed to the customer at the point of sale, the percentage of the margin included in this rate is not.

Most people do not fully understand how the margin percentage is calculated and applied during DCC conversion, and how this will affect their final transaction cost. In fact, the exchange rate applied at the time of transaction has the margin worked into it and it is meant to benefit – you guessed it – the merchant and the service provider, and not the customer (i.e. you).

Therefore, the final amount that is charged to your account after conversion into your home currency ends up being higher than it would have been had you not opted for DCC.

2. A Foreign Transaction Fee Is Levied Even If You Aren’t Paying In A Foreign Currency

By opting for DCC and converting your transaction into your home currency at the time of purchase, you avoid paying in a foreign currency. Does this matter? Well, yes. The problem is that many people believe that by doing this they can also avoid paying the bank’s foreign transaction fee. Unfortunately, that’s not the case. The truth is that with most credit cards, a transaction fee is payable for all foreign transactions, irrespective of the currency being charged at the point of sale. With this fee, the credit card company is simply charging you a percentage value for the transaction made abroad, and not for the actual currency conversion, which incurs a different and additional fee. Some estimates suggest that a DCC fee is added to around 90% of overseas credit card transactions, and sometimes these fees can be as high as 5% of the transaction value.

If your final transaction value in your home currency is higher than the value in the foreign currency, your fee is also higher, and you end up paying more for your transaction after DCC than you would have had you not opted for it.

3. Using DCC Does Not Help You Avoid Currency Conversion Fees

Even though DCC converts the transaction into your home currency, you still have to pay a currency conversion fee as part of the process. When you consider the exchange rates – these can vary as per card issuer and usually end up being unfavourable for consumers. Add the foreign transaction fee and currency conversion fee, and the outcome can hit your wallet pretty hard, even if you don’t realise it at the time.

4. DCC Is Applied To All ‘Foreign’ Transactions

In addition to purchases made in a foreign country using the local currency of that country, the DCC process also covers online transactions with foreign merchants and PayPal intercountry transactions. It doesn’t matter if you are not physically in a foreign country. As long as the transaction is processed ‘internationally’, DCC and its associated foreign transaction and currency conversion fees come into play.

The Big Question

Q: Can You Avoid Paying More Overseas?

A: The answer is, YES! There are a few ways in which you can save money while travelling overseas.

The world is becoming more and more ‘plasticised’ and for many people, cash is no longer a preferred mode of spending. However, while travelling to a foreign country, you may be better off loading up on local currency and using it to pay for small transactions such as food, shopping and entertainment, instead of overburdening your credit card.

Another option is to carry a debit card, one that charges you low or no foreign transaction fees. This will enable you to withdraw cash as and when needed and help you avoid carrying a lot of it on your person.

2. Do Your Credit Card Research

Find out whether your credit card charges for currency conversion and foreign transactions and how much these charges are. Over 90% per cent of all credit card issuers charge fees for even using their cards internationally, which could result in inflated bills. However, some cards and banks offer fee-free usage, which can save you a lot of money in the long run, especially if you travel frequently. Apply for a no-foreign-fee card, if you don’t have one already.

In addition to using a card that doesn’t charge foreign transaction fees, steer clear of DCC and pay in local currency when travelling. This will eliminate uncertainty, hassle and the shock of unwanted charges.

If a merchant selects DCC without asking for your permission or despite you refusing to opt for it, ask them to cancel the initial transaction and run it again in the local currency. Always check the bill before the payment is finalised to make sure that everything on the bill is accurate, including the billing currency.

4. Use A Low-Cost Money Transfer Service Like InstaReM

Utilising the services of an overseas money transfer company can save you a lot of money in charges and fees, especially if you are a frequent traveller and end up using the service often.

Until a few years ago, sending or receiving money across borders was cumbersome and costly. Is it possible to transfer money easily and quickly between a number of countries in Asia, Europe, North America and Oceania? With InstaReM , definitely!

InstaReM offers:

  • Zero-Margin FX Rates: It offers low-cost money transfers with mid-market rates and only a nominal remittance fee.
  • No hidden charges: You will receive an accurate break up of your transaction. What you see is what you get – no nasty surprises.
  • Best Transfer Amount: It adds absolutely no margins and guarantees you the best transfer amount possible.
  • Easy Sign Up, Straightforward Transfers: All you have to do is sign up, verify your account, upload the relevant documents and start transacting. The recipient typically gets the money in 1-2 business days.

It is possible to make your hard-earned money #DoMore on international sojourns. The key is to keep an open eye and research your options thoroughly before you begin your journey.

Happy travelling!

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