Web analytics may well be the answer to that age-old marketer’s conundrum: I know that half my budget works I just don’t know which half.
The main benefit of digital media is its ‘trackability’. Whereas in the early days web analytics was very much an IT-centric application producing fairly rudimentary data on website activity, now its capabilities have become much more sophisticated, while at the same time its power has shifted to marketers. This has enabled them to gain a deep understanding of website visitors and, ultimately, spend their budgets most effectively.
Andrew Hood, general manager of Lynchpin Analytics, says, We can show you how to make your marketing more profitable. We can very easily monitor the effectiveness of every pound you spend, how many people came, how many spent money and which campaigns are and are not working well. This is absolutely the key to good analytics.
By seeing in real-time which campaigns elicit the best response, marketers can respond immediately and adjust their focus accordingly something which is impossible with traditional print and electronic media.
This is all achieved through a process of ‘page-tagging’ and ’embedded-codes’ which produce ‘log-files’ of everything that happens on a website. (And that is about all the jargon most marketers need to know.)
Web analytics can also provide marketers with a ‘full circle’ view of their online activity. Andrew Hood says, Marketers cannot rely on systems that track campaigns and marketing channels in isolation. Potential customers will often interact with multiple channels and campaigns before converting. Understanding this is to key to achieving the optimal online marketing mix.
The main benefit of an effective tracking system is the ability to repeatedly test, measure, evaluate and refine. The key marketing analysis needs to be distilled so that the important trends can be picked out and acted on.
To find the right solution to their analytics needs, companies must first be clear about what they want to achieve. While marketers do not need to be IT-savvy to understand or implement analytics, to maximise the benefits they do need to understand how technology behind it can increase the return on their online investment. A good software provider will offer sufficient analysis instruction to enable them to do this.
Gray Dudek, ECRM director with ITG Digital, says, Forget about the software and outline your objectives and critical success factors, so that you have something to measure the results against. If not, you will end up with a raft of arbitrary numbers, but nothing actionable will come out of it. The key thing is to make sure the vendor understands your business.
Conrad Bennett, technical services director with the analytics company WebTrends, says that businesses should also look for a vendor who is interested in forging a quasi-partnership by not only installing the software and providing training, but making recommendations based on the company’s specific needs.
Bennett explains, The complexity of the product will require our support, not in terms of ‘How do I get it to work?’ but ‘How do I get it to show me exactly what I want, what do those reports mean and how can I use them to manage my business?’
He adds to this We don’t overwhelm people with too many reports. We educate them to serve their own needs. This is an application which should sit within, be owned and managed by the marketing team. Ultimately the responsibility is with the guys who have the budget for the online channel.
Hood of Lynchpin insists that the right package should speak a language marketers understand. He says, Getting results from analytic and tracking solutions is all about striking a clear analogy between business goals and online performance and establishing a tight feedback loop from that analysis to how campaigns and channels are managed to achieve the best overall return on investment.
Many companies already have a reasonably robust content management system with some kind of analytics capability already built in. This will provide top-line stats, such as the number of visitors to a particular page, how long they look at it, whether they make a purchase, where they ‘drop-off’ (leave the site) and to a certain degree where they go after that.
Inevitably, however, this is no more than a snapshot. What it doesn’t give you, Dudek of ITG Digital says, ‘is what I call a ‘so what?’. It gives you the hard facts, but doesn’t actually tell you what to do. So you have to find out more.
This has to do with how content on a website is ‘intellectually linked’ and it is where Amazon is often held up as a paragon of good analytics.
Dudek explains, They get it right every time. For example, if you buy book A, they will suggest books which other people who bought book A also bought. They find out what people are looking for and what they are actually buying. It’s about building a profile of people based on your product categories.
Whichever product a company opts for, Bennett of WebTrends stresses the importance of incorporating analytics into the marketing strategy as soon as possible.It’s never too early to be thinking about it. The earlier you do, the better the reports will be.
He continues, Everything marketers do these days must be justified. So if, for example, you’re thinking about a site redesign, you need to be thinking about measuring the effectiveness of that change as soon as possible.
This in turn leads to what Gray Dudek calls the ‘Holy Grail of analytics’, ‘data visualisation’, or the ability to find out on an almost individual basis what customers like and therefore how to target them with subsequent campaigns.
Dudek adds, The customer you’ve got is the same as the one you want. On the basis that 20 per cent of your customers deliver 80 per cent of your revenue, it’s more expensive to get a new customer as it is to retain or up-sell an existing one. We always encourage clients to get into this category of analytics as soon as possible. That’s where they’re going to make the most money off the data.
Analytics is also at the heart of what many practitioners see as the single most significant development in the industry: multi-channel marketing. Far from succeeding marketing methods replacing one another, they have all found their niche in the overall strategy, and the big challenge now facing marketers is to understand how they all work together. As the lines between them continue to blur, analytics can bring disparate sources together and interpret both their individual and combined effectiveness.
Andrew Hood of Lynchpin says, Traditional analytical systems which track marketing channels in isolation still rely on analysts to manually compile a high level view, by which time the opportunity to capitalise effectively on the information may have passed. Analytics can quickly illustrate what mix of channels drives your best customers the ones who spend the most and have the best lifetime-value.
With so many analytics packages on the market performing such a range of functions, it is impossible to offer anything other than approximate costs. These can range from a two-digit figure per month to hundreds of thousands over several years. In the case of a straight ecommerce site, some providers may accept at least partial payment on a per-transaction basis in effect, a commission which places the onus on them to ensure a site’s effectiveness in attracting paying customers. Andrew Hood of Lynchpin Analytics says that a mid-market company might spend £10-20,000 a year, for which they would receive “a reasonable amount of support”. He also quotes a client who, by employing analytics, was able to reduce his advertising budget by 30 per cent without reducing sales. ITG Digital quote a client in the retail and leisure sector which has a database of around 110,000 customers with whom they communicate about nine times a year. The average customer makes about four purchases a year at anything from £20-300 each. The client pays around £5000 a year for tracking, post-campaign reports and an end-of-year report. While most of WebTrends’ commercial customers spend a few thousands pound a year, large organisations can spend several hundreds of thousands over a three-year contract. WebTrends works on a linear cost model based on the volume of the site: the bigger the site, the more it costs. Conrad Bennett says that $10,000 (about £6,250) is an average entry level cost for a medium-sized customer. Bennett elaborates, “Web analytics ends up being a very small percentage of overall web expenditure. The analysis we can provide justifies the rest of the expenditure. I’d be very surprised if any of our customers spend more than 10 per cent of their overall web infrastructure costs on analytics. In terms of ROI it’s easy for us to show them how much we can save them or improve their effectiveness for that small percentage.”
