Data analysis is an indispensable part of SEM promotion in China. Advertisers can discover problems in the promotion and provide data references for solving problems through data analysis.

The procedures of analyzing data are as follows:

To improve the efficiency of optimizing your promotion in China, below are our suggested four main methods of data analysis:

1. Trend data-comparative analysis

The trend analysis method, known as the comparative analysis method, is mainly based on the same data standard to determine the differences caused by other influencing factors. Consider also exploring the reason(s) for these differences, to find an optimization method.

This method is suitable for long-term tracking of core metrics, such as ad click-through rate, number of active users, etc. Perceive the overall trend by analyzing the direction, amount, and magnitude of changes.

Advertisers can analyze through multiple dimensions, such as a certain period, daily, weekly, etc. Advertisers also need to adjust their advertising strategies according to their industry and trends over time.

2. Proportional analysis approach

The proportional analysis is a method of dividing the same thing into several items, calculating the proportion of each component in the total, and analyzing the proportional relationship between the component and the total.

This method is useful for advertisers to quickly grasp the main revenue contributors such as the company's core promotion business, main promotion channels/promotion regions, etc. 

The figure above is an example of using the proportional analysis approach. From the figure, the most profitable words are brand terms, accounting for 87% of the total income, followed by generic terms, accounting for 11% of the total income. Conversely, the most common words in this advertisement are generic terms, followed by brand terms, each costing around 40% of the advertising budget. Therefore, we recommend advertisers focus on promoting their brand terms that contribute the most to the revenue.

3. Four-quadrant analysis

The four-quadrant analysis method uses two reference indicators to organize the data into four parts, and then conduct targeted analysis for each small piece of data within the quadrant. 

As shown in the figure above, the X-axis is the click rate from left to right, and the Y-axis is the conversion rate from bottom to top, forming four quadrants. According to each promotion's click-through rate and conversion rate, first find the corresponding data annotation points, and assign the effect of this promotion to each quadrant. The four quadrants represent different effect evaluations.

This method can help advertisers:

• Find common causes of problems

The quadrant analysis method performs attribution analysis on events with the same characteristics, and the common causes are summarized. For example, the events in the first quadrant of the case can extract effective promotion channels and promotion strategies, and the third and fourth quadrants can exclude some ineffective promotion channels.

• Establish a grouping optimization strategy

The quadrant analysis method for placement can establish optimization strategies for different quadrants, such as improving placement ideas in quadrant two and placement channels in quadrant four.

4. TOP N Analysis 

The TOP N analysis method refers to the summary of the top N data based on the data compared with the rest of the summary data to obtain the proportion of the most important data and the data effect.

This method can be combined with the "Thee Pareto principle, also known as the 80–20 rule". The 28 rules state that 80% of the revenue comes from 20% of the top users. Combining the two methods can help advertisers quickly find the data that accounts for 80% of the consumption/effect, which can effectively help locate the problem. Otherwise, too much data may complicate the problem.

After finding the data that accounts for 80% of the revenue, the next step is to locate those important keywords that require continuous attention to consumption or conversion, to facilitate further screening and optimization.

For more tips on analyzing the SEM data in your next China advertising campaign, contact our marketing consultant at: enquiry@so360.hk.