Actionable Analytics for Online Marketing Success
Accountability. For years this was the primary reason to move marketing dollars online. Today the marketplace is glutted with analytics tools that supposedly help marketers create better digital ads and Websites. And yet each year marketers stake their reputations on digital advertising programs and Websites that deliver irrelevant content to consumers and limited business value to the enterprise.
It’s not that there is anything wrong with analytics tools; it’s just that too many marketers confuse a Web analytics tool with a great Web analytics program, the latter of which encompasses the right skills and training to develop meaningful insights from the tools and then implement those insights.
Chief marketers can ensure that their teams effectively and profitably harness analytics by asking the right questions about how findings are collected and applied. This column discusses six questions you should ask right now. These are real questions that our clients have asked us. Next time we’ll look at some cutting-edge approaches to actionable analytics being used today that are sure to gain steam in 2007.
Question: Should I spend my next advertising dollar on brand advertising or direct response advertising?
Answer: Analyze historical campaign data to identify the best mix of brand and direct response for the highest probability of conversion. Consider these rules of thumb:
• Conversions increase with impression frequency but at a decreasing rate. Sometimes increasing frequency may actually reduce the probability of conversion.
• A combination of brand and direct response advertising almost always works better than either one alone. A “hot zone” of media mix exists, delivering the highest indexed conversion rate. Ask your team to identify your hot zone, and monitor and optimize toward that zone throughout a campaign.
• The index scores and the hot zone vary by campaign, so your team should perform this analysis with the data for each campaign.
Question: Have I established the best possible set of metrics to optimize my online media campaigns?
Answer: Probably not. Few companies link media data and transaction data. Fewer have accounted for the online-to-offline conversion. Some tips:
• Don’t burden a single campaign with both direct response and brand goals.
• Choose your metric(s) wisely.
• Invest in a custom media dashboard for your team; tie media data to the desired transaction or financial data.
Question: Do media channels interact to influence consumer behavior? If so, how much? Answer: Yes. A recent Avenue A | Razorfish study revealed that a group exposed to display media was 27% more likely to click on a branded search ad than was the control group. The exposed group was also 41% more likely to convert on the search click (conversion was defined as completing an online purchase). Marketers who understand this interaction have an advantage, employing better media buying strategies and performance targets.
Question: If media channel interaction influences customer behavior, what implications does this have on how I should attribute sales and allocate my media spend?
Answer: You likely attribute too much credit to the last online impression viewed or clicked. Marketers with more-advanced attribution models will likely gain market share. Keep in mind:
• Custom algorithms for assigning credit may enable more-effective media allocation and provide intelligence to improve media, ad unit, and message-related decisions.
• Marketers need a technology platform and analytical expertise to implement a custom media attribution algorithm.
• Consider individual circumstances and conduct research before drawing final conclusions about the best attribution model.
Question: Once I’ve settled on a Web analytics package, how do I create a successful Web analytics program?
Answer: Successful application of Web analytics requires multiple resources working together to attain accurate and actionable marketing data. The three critical elements are implementation, analysis, and action.
At retail, you track the purchase of every SKU, every basket of goods, the profitability of the sale, and the customer’s purchase profile. Online marketers also do this, but they can actually do more. Imagine if you could track every single action that occurs in your retail outlet–not just the volume of traffic in a store but also how many people stood in the toothpaste aisle and felt overwhelmed by the dozens of brands offered, examined three products, put two down in less than 10 seconds, and purchased the most expensive shiny box they handled because it promised 10 times brighter teeth in a week. Web analytics makes this level of analysis possible but only if you know how and where to look for it. Are your analysts digging into your Website data this deeply to uncover actionable findings? If your analytics are not actionable, you leave revenue on the table.
Question: Do Website analytics tools provide holistic media measurement?
Answer: No. They attempt to measure a slice of the overall media landscape and typically base their measurement on unreliable data. They don’t meet most advertisers’ needs and may result in ill-advised decisions regarding media mix and optimization. Remember, Website analytics tools
• provide intelligence about the performance of a Website or online business, not holistic media insights.
• lack the essential media impression data needed to adequately integrate digital and traditional media.
• rely on the referring URL for media measurement, a fundamental flaw causing significant errors in attribution and optimization.
• should support the entire sales funnel, not just the eventual conversion.
Critical self-reflection on the actions taken as a result of analytics investments can help you achieve more with these investments. Next time, we’ll highlight some of the industry’s most innovative uses of analytics and what lies ahead for this actionable marketing discipline.
Dave Friedman is president of the central region for Avenue A | Razorfish, a Seattle-based interactive services firm, and a monthly contributor to CHIEF MARKETER. Contact him at [email protected]. Avenue A | Razorfish recently released “Actionable Analytics,” a report that demystifies the world of Web analytics. To download a free copy, visit www.avenuea-razorfish.com/points.htm.
Other articles by Dave Friedman:
Are You a New-Media Marketing Maven?
Young and Restless: Tips for Reaching Teens Online
Finding the Hispanic American Online
Decoding Digital Footprints with Analytics to Better Understand Consumers
Offline Research for the Online World
Social Media: Four Crucial Mentality Shifts for Marketers
Social Media: Out of Control, on Target, and Changing the Rules
Digital Media, Collaborative Thinking, and the Whole-Brained Approach
