What Is Correlation?
Correlation is when there is a mutual relationship or connection between two or more things. In mathematical terms, correlation most often applies to the measurement of the relationship between two variables, X and Y.
How do you make better campaign decisions using correlation appropriately?
This answer might satisfy a statistics test, but for marketers, the real issue with establishing a relationship between two things is understanding the story your marketing data tells. Correlation studies should show marketers how to make better campaign decisions.
Unfortunately, most marketers experience the issue of showing a correlation between precise marketing efforts and campaigns with precise outcomes. You may be able to show some connections, but the relationship is tenuous and far from effective in really driving home actionable insights
What type of correlations do marketers look for?
Marketers can look for relationships between any two data points. For example, marketing analysts might wonder if more Facebook shares of a particular URL lead to a higher Google search ranking. Perhaps marketers want to know if emails with red call-to-action buttons get more clicks. Maybe the question is do posts with images get more shares across social media?
What is Causation?
Causation is a description of the direct relationship between an event and an outcome such as an event(s) or situation. An example of a causative event in digital marketing would be starting a PPC campaign would be the causative effect which leads to 100 clicks appearing in your Google Analytics account.
There are thousands of questions marketers might ask, and while correlation is not always causation, discovering important relationships through correlation data is undeniably valuable.
What's The Issue With Causation & Correlation Confusion?
Correlations are best suited to detect linear relationships between variables. If a relationship isn't linear often the correlation will be missed in analyses (based on often used Pearson correlation).
So correlation ` causation but the reverse can also be true. A causal relationship between variables without a clear (linear) correlation.
But when you see a correlation this could mean a causal relation, random chance, or a third factor in play which needs to have a causal relation with both variables independently causing the correlation. You can learn a lot by looking for this third factor!
Roel Willlems - https://roelwillems.com/When you apply an incorrect understanding of causation as it relates to marketing campaign successes you can end up making costly marketing decisions to increase budgets or reduce budgets but actually end up failing to impact your desired result.
Identifying correlations can help marketers::
- Make SEO/PPC campaign decisions
- Test those campaign decisions
- Determine if those relationships are yielding profitable results.
In short, correlations give insights that help marketers make actionable decisions, fine-tune marketing strategies, and ultimately, grow businesses.
Correlation Analysis For The SEO Industry
Moz recently conducted some interesting in-depth correlation analysis of data commonly available to search engine marketers. While they openly acknowledge that correlation is not causation, the results yield some insightful information about keyword strategy when it comes to what actual hands-on work gets prioritized in your SEO campaign.
- There were lower correlations between on-page keyword use and rankings. This could imply that you don't HAVE to always use the EXACT keyword you're targeting on your pages in order to rank for it.
- Using HTTPS showed a very low positive correlation. This could imply that securing your site with SSL may not have a large SEO factor that impacts your rankings but could be beneficial for other reasons.
- Data continues to show some of the highest correlations between Google rankings and the number of links to a given page. This could imply that marketing efforts to gain links from other sites continue to be one of the highest returns on investment for your SEO campaign.
- There was little relationship between the type of top-level domain (.com, org, etc.) and rankings in Google. This could imply that you may not have to pay exorbitant prices for a .COM version of a domain when a different, cheaper TLD is available.
How Understanding Different TYPES of Correlations Helps
Freelance SEO consultant Dave Smart posted an epic thread on Twitter, about how understanding types of correlations can help you filter and apply information gleaned from "correlation studies" properly.
1. Random coincidence: They align, but that's just because they happen too. Fun stuff, but increasing mozzarella consumption isn't going to increase the amount of qualified civil engineers.
2. 'Reverse' correlations, where the trend is connected to the thing you are studying, but that's because it's affected by it, it doesn't control the thing you are studying.
I used to work in aerospace labs, & a very sensible boss taught me a lesson that stuck with me here: Don't heat the airplane. We used to do stuff for fast jets, & one of the things that happens when something is an example, making sure the site loads just quickly with 1,000 users on at the same time as opposed to just 100 at the same time becomes important IF you started ranking in 1 for a heavily searched term!
3. Actual Causation! That's what we want, but we can only determine this is what's happening if we change the variable highlighted & that has repeatable results.
Some are easy, like does adding a no index tag affect the ranking position? Yes, it's an easily measurable thing with a strong binary outcome.
To study it is simple. Ask a different question, "Do clicks from different locations affect Google's understanding of the relevance of a page to that term/city?" & it's a whole lot muddier.
You might never determine this actual causation no matter how big your study as there are way too many unknowable variables, as we don't have access to the same picture Google has, we don't know if there's something else doing this and we're actually seeing a false or reverse correlation.
How to find and use correlation more generally in marketing
This type of data analysis is not reserved for just keyword research. Marketers can use it for social media, paid search, email marketing, design, and more.
You name it, you can conduct correlation analysis to see if any relationships stand out to you. The key to identifying causation via correlative study is to limit the amount of variables that go into your experiment.
- Do you want to see the effect word count has on ranking?
- Do you want to see if keyword stuffing affects rank?
- Do you want to know if videos improve dwell time and increase conversion percentage?
If you want to get answers, you can't run multiple experiments at the same time. You need to be able to track precise data points. Don't change 4 or 5 separate factors if you're trying to make an A to B relationship.
The formula for correlation (r) is:
But, I'll stop right there. No marketer has time to sit around and do math by hand all day. That's where marketing data analytics software like TapClicks comes in handy.
Instead of finding the value for x and y to find r, you simply pick your variables and let the software do the hard work for you. That way, you can spend your time using the data to make better marketing decisions.
Real World Correlation Experiment Example
Correlation between Bounce Rate & Goal Conversion Rate?
I was able to configure two widgets with a data view for Google Analytics, that shows the last 6 months' data on Bounce Rate, how many people visit just one page, and the Conversion rate of visitors turning into customers.
We can, from this data, begin to imply that there is SOME potential correlation between these data points as the decrease in bounce rate falls in line with an increase in Conversion rate. However, that's just the beginning of your process, as you would want to test that relationship by changing some variables.
You might change the medium/source and find that your bounce rate for a certain category of traffic like paid ads is much lower, and you started an ad campaign that increased your conversion rate.
That's a MUCH different insight than "Improve bounce rate to improve conversions".
