Measuring Success

Some background information…

Often web analytics data can be extremely revealing - I have seen conversion rates increase ten fold as a result of web site changes brought about by such data. However as the analyst, you will know that interpreting the data is only half the story. You also need to communicate this story effectively across your organisation in order to get the buy-in required for the wholesale changes you may be proposing. You do this by creating internal “stakeholder” reports. The report is a very abridged version of your web analytics reports, usually summarised in Powerpoint and/or Excel and known as a Key Performance Indicator report (KPI Report).

There are literally dozens (if not tens of dozens) of possible KPI values to include in such reports and Eric T. Peterson’s The Big Book of KPIs lists just about all of them. The trick is to only select a handful relevant to each of your particular stakeholders i .e. don’t show all stakholders, all the KPIs - its too much information that will result in a loss of impact.

An example KPI report may include:
• Average conversion rate
• Average order value
• Average per visit value
• Average ROI
• Percentage revenue from new visitors

Note there are only 5 KPIs in this report, which is entirely acceptable and even desirable.

New Customer on First Visit Index KPI

Definition: What is the likelihood of a new visitor becoming a new customer on their first visit?

This is a key question many Marketers and E-commerce Managers (usually the same person!) are asking themselves. For example, should they be investing their time and effort in attempting to get their new visitors to convert first time i.e. emphasizing calls to action in their marketing efforts and page content? Or should more engagement and relationship building methods be employed?

Figure 1 - revenue by visitor type

Figure 1 is an example web site that shows a high proportion of its revenue is generated by first time visitors. But how does that relate to the number of first time visitors to the web site? The New Customer on First Visit Index KPI can tell us this:

Figure 2 - %transactions from new visitors (click for new window)		Figure 3 - %visits from new visitors (click for new window)

For this web site, the numerator is taken from Figure 2 and denominator from Figure 3, the value is calculated as:

New Customer on First Visit Index = 62.50 / 77.20
New Customer on First Visit Index = 0.81

Interpretation for the New Customer Index KPI

• A value of 1.0 tells us that a new visitor is equally likely to become a customer as a returning visitor.
• A value of less than 1.0 indicates a new visitor is less likely to become a customer than a returning visitor.
• A value of greater than 1.0 indicates a new visitor is more likely to become a customer than a returning visitor.

For the example web site (New Customer on First Visit Index = 0.81), a new visitor is less likely to purchase than a returning visitor. This is not surprising as the average order value KPI is high (£1,315.99). Considering this, it is therefore surprising is that the New Customer on First Visit Index is so high. This indicates that the value proposition and other on-site factors such as trust, page content quality etc. is very high for this web site.

Conclusions

Q: What is the likelihood of a new visitor becoming a new customer on their first visit?
A: For this example web site, a visitor is slightly less likely to purchase on their first visit.

However, the emphasis is on slightly. Conventional thought would be that such a high value item would require multiple visits for the potential customer to be convinced to purchase. In this example, it appears the visitor has already made up their mind they are ready to purchase (perhaps there is a strong brand influence) - they just need a quick, easy and trustful source to purchase from.

So the Marketers and E-commerce Managers should indeed invest their time and efforts in emphasizing calls to action in their marketing efforts and page content.

What do you think? Do you have a KPI for your organisation that has not been documented elsewhere? Please share your thoughts via comments.

On Weds 30th May, I had the pleasure of attending SES Milan for the first time. I started my career with web development and SEO back in 1997(!), so over the years I have been to many of the SES events. Its great to observe that the search market has evolved since those “smoke-n-mirror days” as well as discover country/regional differences around the world.

As a pan-EMEA manager I am ashamed to admit that my language abilities are poor - just English and a small amount of Russian (I am always amazed at how some people can simply switch between languages - both in thought and speech. Or do they always think in their native language I wonder?). Of course SES events are held in their local language and Milan was no exception. So many thanks to Sante Achille (SES moderator) who found the time to summarise the Measuring Search Marketing Campaigns presentations in English for me.

Summary of the Measuring Search Marketing Campaigns session:

• Over the past 12 months there has been an increased interest in web analytics in Italy
• There is a growing awareness of the importance and understanding of what is happening on your web site
• The different web analytics systems presented (ConversionLab, Imetrix, Atlas) all converged on the fact that there is a need for common standards. The lack of standards leads to macroscopic differences in results due to different interpretation of information - for example unique session ID, unique IP access, bounce rates, etc.
• Imetrix made the point that measuring conversions is often very black and white - the visitor either converts or does not. However, thought should also be given to measuring partial conversions e.g. add to cart page, even though the visitor may not go on to convert.
• Atlas showed some interesting data on keyword path tracking. That is, tracking all the search engine keywords that lead to a conversion - not just the last one, which is the industry standard at present. The conclusion was that generic keywords that are perceived to be poorly performing (if only the last keyword is tracked on conversion) are in fact driving repeat visits for more specific keywords.

  Very true - don’t chop off the head that feeds the tail. I will post on the options available for tracking keywords within Google Analytics in the near future.

During the Q&A discussion, the feeling was that Google Analytics is used by many web site owners in Italy and in fact its availability was catalysing interest for more detailed analysis. It would be interesting to see if a Google Analytics case study is presented at the next SES Milan event…

If you were at SES Milan, or have an opinion on any of these points, please share your thoughts by adding a comment.

(Grazie Mille to Laura Paxia and Giuseppe Fragola for a signed copy of their book - the first Italian book published on web analytics. Now where is my Italian dictionary…?)

As Jim Sterne completed the second and last leg of his European tour I attended eMetrics Dusseldorf last week. My German is a tad limited to say the least, so my colleague Timo took the lead on the vendor panel and managed the Google Analytics booth with Rene. Despite my lack of local language, two excellent presentations caught my eye:

• Rapheal Nolens from Pioneer Europe
• Mathias Blum from Lycos Europe

Of course I am slightly bias here as both of these included analysis work conducted using Google Analytics. However Rapheal made an excellent analogy which has stuck with me:

Conducting web analytics is like riding a bicycle. The tool you use in the bicycle, but in order to get anywhere you still need to pedal i.e. do some analysis.

That is very much where the web analytics industry is today - great tools, some with bigger bells and whistles than others, but essentially very similar tools attempting to do very similar things. That is, to help you understand the visitor traffic of your web site.

But what’s next for web analytics vendors?

Some vendors are specialising on data warehouse solutions - bringing all you business metrics (offline and online) into one platform. Others are focusing development on tracking the challenges of Web 2.0 - such as social media, blogging and visitor engagement metrics. Bid management, real time visitor survey tools, integrating off-site metrics e.g. search engine rankings, server uptime, download speed etc. are cool features that I have seen.

These are all great developments, but for me the biggest opportunity for the web analytics industry is not an arms race of new features, but simplification. By this, I don’t just mean making a more easy to use menu navigation system, though of course that is also important. What I refer to is two fold:

1. Simplify the setup process:
   Make it suitable for the average web developer/webmaster to implement. In that way, web analytics will become apart of the design process - rather than an afterthought as it is now.
2. Simplify the user/analyst experience:
   Make gaining an understanding of visitor behaviour more accessible. The buzz words on this are accessibility and discoverability. At-a-glance reports that are structured in an intuitive manner so that you can quickly drill into the audience segment you want and ascertain “is this data good or bad for my business” i.e. what action should be taken?

Is this simply KPI reporting? No I think not. KPIs are a double distil of information from your web analytics package. Although great for messaging an easy to digest story to senior management, KPIs leave out so much they are not suitable for the strategist. But viewing all the data all of the time is overwhelming, so an intermediate level is what I propose.

What do you think? Are you looking for features that are not yet available in your vendor’s tool or is there something else? Please share your thoughts via comments.

An important series of events for anyone interested in web analytics is Jim Sterne’s eMetrics Summit. There are currently 4 of these per year with the London event held last Thurs and Fri (29/30 March) at the Russell Square Hotel. Unfortunately, due to illness I was unable to attend in person, though Avinash Kaushik stood in for me on the vendor panel and I hear did a great job…

Some questions directed to the vendor panel and from the Google Analytics booth:

• Q: What features differentiate your product from others?
• Quick Answer: Ignore feature lists!

That’s always a good question that regularly comes up. I don’t know other tools in detail, but essentially as far as features go there is very little to differentiate any of the vendors. For example, they all have site overlay, geo-overlay, marketing analysis, eCommerce analysis, x-segmentation etc. Of course there are many ways to skin a cat, but essentially there is a great deal of feature parity out there - so my advice is ignore feature lists!

What is more important if you are selecting a vendor, is to consider what key metrics your organisation needs to know. Look at how easy it is for each vendor to collect and display that information to you. Then how easy is it for you to manipulate it i.e. x-segment, compare against another date range, filter etc.

• Q: Why pay for a service when GA is free?
• Quick Answer: Exactly - invest in understanding the data.

Firstly lets clarify what is meant by GA being free. Google Analytics is a free tool - that’s it. It is a data collection and reporting tool, but it will not analyse or optimise your web site or search engine marketing for you (no tool can!). For that you need intelligent people i.e. expertise. Also some web sites are complicated and require a bespoke implementation. Again that requires expertise.

Some vendors include that expertise as part of their package. The unique approach of Google is it makes its tools as simple as possible to use and understand (I taught myself!) and it has separated the provision of its tool from professional services such as consulting and training.

If you require professional services, buy these separately from independent Google Analytics Authorised Consultants.

• Q: How long does it tale to implement GA?
• Quick Answer: How quickly can you get the tracking code on your pages?

That is always going to depend on how complicated your web site is to track. Similar to search engine optimisation (SEO) principals, web sites can be built that are easy or hard to track - think of the difficulties of Flash only sites. That said, getting initial pageview data is very easy to setup because Google Analytics uses the same page tag (javascript snippet) on every page. So as soon as you can tag your pages, you will start to receive data.

• Q: Can you customise GA reports?
• Quick Answer: At present there is limited customisation of Google Analytics but that will not always be the case…

A key principal of working for Google is what we never discuss future developments - for any product. I can be pain when working in such an exciting fast moving company, but Google likes its ability to surprise its users (and its competition!). All I can say is watch this space…

• Q: In GA can you email reports out?
• Quick Answer: At present no, but that will not always be the case…

Many thanks to Estela Oliver and Philip Walford for helping out on the GA booth.

At the Measuring Search Engine Marketing Success session, I had the pleasure of presenting along side Brian Donnahue (IQContent) and Nick Walsh (Net Affinity). Moderated by Danny Sullivan, the session looked at the tools available as well as an overall process for measuring search marketing successes.

It was great to see ‘measurement’ taking such a prominant role at a one day event with around 70+ people at this session. For me the key take away was - whatever you use you your web site for, measure and understand its traffic.

A separate though very interesting session was ‘Ad Agencies and Search‘. Damian Burns from Google presented some novel ideas that had been used by some of the more pro-active media agencies integrating search with off-line campaigns. For example in his Pontiac demo, the tv campaign ended with a call for the viewer to go and search online for what people are saying about their car - contrary of the prevailing agency view of begining with search.

This was the first search marketing event to be held in Ireland and appears to have been a great succuss with 400+ attendees - Congrats to Martin Murray and his team on organising a smooth running conference (the Baroque Chapel really was something else for presenting in).

The SMW presentations can be downloaded here: www.searchmarketingworld2007/presentations.htm

Mel, John, Teddie, Damian and Caragh - thanks for the drinks.