Entries categorized as ‘Web Analytics’
Any effective ROI assessment of online demand generation needs to be based on some form of tracking. The preferred method for understanding where the originating customer of a sale was exposed to the marketing message/ creative is the “cookie” i.e. a small text file sent via the browser to the computer at the place of exposure. When the sale is registered the cookie will provide the origination information to the tracking host/ affiliate network provider for accounting purposes.
In affiliate programmes, the key is to understand to what degree a given affiliate can be credited for a sale (I will for the sake of simplicity disregard the problems surrounding multiple origination points before a sale). Today, some affiliate networks do not make any distinction between a so called “click through” sale (the click being a definite link from the site of exposure to the point of sale) and a so called “view through” sale (the cookie has been received by inactive “viewing” i.e. visiting a big news site would be enough to actually be exposed to the cookie, the customer sometimes not even seeing the marketing message itself).
Whereas the click through method is relatively clean, the view through method is controversial for a number of reasons. Many of them should be of the greatest importance for any online marketer.
- There is a weaker link between the sale and the exposure hence one could and should question whether the sale really should be attributed to the view through point of exposure.
- This means that the cost per sale will look good – many more sales at a predefined payout level. Nevertheless, there will be false attribution of sale origination. The marketer/advertiser will think that what should be attributed to TV, radio, banner advertising or simply base demand is originating from an affiliate programme. The advertiser will pay twice for the same sale.
- Affiliate networks that do not clearly separate the two in data reports to customers are in my view not playing fair vis-a-vis the advertiser.
- Affiliates will be inclined to join programmes and affiliate networks where view through sales are highly or equally rewarded to click through sales because they will make more money with less quality effort/ traffic.
- Affiliate networks that do not up front separate the two methods often refrain from doing so because they lack tracking technology to separate the two methods and hence offer the same payout for two very different levels of interaction from the customer.
Don’t use affiliate networks that don’t tell you upfront how they manage and attribute view through vs. click through. It will cost you dearly even if your cost per sale and volumes look great.
Categories: Web Analytics · eBiz Affiliation · eBiz Demand Generation · eBiz Management
Tagged: Accounting for performance in affiliate programmes., Don't pay twice for the same sale., How affiliate performance is credited., iSales vs. Sales., Marketing ROI on affiliate programmes., Online sale attribution conflict., Pitfalls in affiliate marketing., ROI misrepresentation.
My colleague Åsa Lundell at TradeDoubler, www.tradedoubler.com and www.digipedia.se, showed me some very interesting research on transaction volumes online. The research clearly highlights how average order values (AOVs) are trending down year to date.
What is even more interesting is that the order volumes themselves are not trending down. The number of orders are probably driven by a variety of factors e.g. growth of online users and migration of offline campaigns.
On the other hand, average order values are hit by:
- Purchase patterns amid recession – people have less money and look for bargains and cannot fully afford high end products.
- Increased efficiency in online tracking – the more orders we track as a percentage of total – the greater the number of orders and the lower the average order value.
- Possibility that high AOV ecommerce items (durabels etc) are suffering more than e.g. fast moving consumer goods i.e. mix is shifting to lowend AOV.
Categories: Web Analytics · eBiz Affiliation · eBiz Demand Generation · eBiz Globalization · eBiz International · eBiz Management
Tagged: Average order values online hit by recession., Drivers of lower average order value online., Ecommerce slowing - driven by lower average order values.
Price elasticity of demand is a difficult topic. One quick and useful way to gage if you are maximizing your margin $ attainment is to look at the development of margin$/site visit versus your margin %. The latter metric is in many cases a good proxy for price competitiveness and has the advantage of being easily accessible for most.
In the this worked example below from a online retailer of cosmetics, I have plotted margin$ visit vs TM% in a 13 week quarter. Margin$ per quarter makes a sharp turn down TM% reaches the 25% level and margin$ generation starts trending downward. In this case, traffic in SV was flat over time – key impact is coming from conversion. Although this method can hardly be said to be scientific, and doesn’t control for all drivers in your business, it will give you an additional, back of envelope type tool.
Categories: Web Analytics · eBiz Big Picture · eBiz Demand Generation · eBiz Management
Tagged: Easy ways to gage price elasticity., Optimizing margin dollars online.
In a recent publications from WPP titled “Change Bite: 10 changes for 2008” you will find a lot of food for thought on where the online landscape is going given some important “from…to…” trends:
1.From China farmland to world stage
2.From global village to local planet
3.From big to nano
4.From fixed pricing to opt-in pricing
5.From basic to premiumnization
6.From DIY to MIT
7.From buying to guilt offsetting
8.From green to blue
9.From social networking to we-commerce
10.From virtual to wiirtual
There are some bold predictions in there but in my view a very good summary of the key trends right now captured in a very accessible format. Happy reading.
Categories: Web Analytics · eBiz Big Picture · eBiz Management · eBiz Strategy
Tagged: eCommerce Changes 2008, Top 10 Changes for 2008, WPP Projections 2008
As e-commerce continues to grow, Dagens Nyheter, Sweden’s leading newspaper, today published Handelns utredningsinstitut’s and Posten’s (Swedish Retail Institute and Swedish Postal Services respectively) top tips and tricks to increase sales on-line. You will recognize many of them from topics previously discussed in this blog.
- Maintain a simple and easily navigated site.
- Use images extensively and display clear product information:
- Improve design so to capture the users attention:
- Offer multiple payment methods (the most popular ones).
- Offer secure credit card payment.
- Implement credit worthiness checks on all customers asking for invoicing.
- Swift delivery – max 3 days.
- Inform customer of exact delivery date – preferably at point of sale.
- Tier shipping alternatives so to offer express at higher cost.
- Acquire happy customers – important in marketing [my comment: "no kidding"]
- Deploy search engine optimization methods
- Use email marketing and newsletters
Categories: Web Analytics · eBiz Management · eBiz News and Trends
Tagged: Handelns utredningsintitut ehandel., Handels utredningsintitut och Posten., Top 10 convergence tips., Top 10 drivers of online sales.
I just did a quick check on what search words are most prominent in internal search. Some interesting stuff came out of the analysis.
1) By far the biggest group of searches are aimed at support needs. Customers searching for drivers and software information were the biggest users of internal search.
2) Market communication/ ad linked searches were the second most prominent (which is intuitive).
I will in this blog touch on this topic further. Internal search is a powerful tool to understand trends in your Customers’ needs.
Categories: Web Analytics · eBiz Merchandizing · eBiz News and Trends · eBiz Strategy
Tagged: Key findings of internal search., The importance of internal search., Tracking customer needs with internal search.
One of the most difficult disciplines in marketing is that of pricing and elasticity of demand. In today’s article, I wanted to give my 2 cents on cross elasticity for substitute products in a portfolio. I have seen a lot of it lately. And I am realizing how easy it is to sell your stuff online such that you, by adding aggression to your low end, actually hurt your high end and total margin$ attainment.
Picture a portfolio with products A and B below. Product A is a cheaper, sometimes negative margin bearing, traffic and units driver. B is a more high end product. Because there are numerous configurations of A and B the high end target segment of product A will consider low end configurations of product B as well as high end configs of product A. Similarly, low target segment of product B will consider high end configurations of product A as well as product B configurations. As we increase margin aggression on product B we see volumes picking up (especially in lower price bands).
Problem is we also see the volumes of product B going up making impact of low-end price aggression visible both in margin and mix shift (lower chart). For most marketeers this should be an intuitive scenario.
What complicates things is that due to channel specific ownership of product prices, I cannot influence the price on product B. Had it been possible to lower the price, we would be able to sell much more units of B and thus raising the overall velocity significantly without hurting the mix too much.
The subsequent variation of margins is high. We see the organization wobbling from guard rail to guard rail in an attempt to balance unit growth and profitability. This highlights both a cross elasticity consequence but also another example of how channel specific strategies can lead to sub optimization in the on-line channel.
Key takeaway: make sure you have full freedom to adapt the full portfolio to a new pricing level for a specific product. In this case you may need to lower prices on both A and B to actually exit promo period with an optimized margin$ attainment.
Categories: Web Analytics · eBiz Channel Conflict · eBiz Promo & Pricing · eBiz Upsell- & Crossell
Tagged: cross elasticity and channel competition., Managing substitue products
Despite many weeks of resistance, I had to yield to team pressure and start learning about the latest buzz word in site and offer development: multivariate testing (MVT). Apparently good old split testing (A/B) is no longer good enough.
Jupiter Research state in a report from 2006 “Multivariate Testing and Site Optimization, STO-06-C06” that “Thirty-two percent of site operators in companies with $50 million or more in annual revenues have deployed site testing and optimization applications. Site operators should incorporate site testing and optimization into a usability framework that leverages traditional usability principles, customer satisfaction measurement, and Web analytics to comprehensively measure and improve Web site usability.”
We are now in 2008 and I can clearly see that MVT has gained a strong foothold in my organization. I guess the $50m kind of defines the scope of MVT as a growing set of applications for big corporates.
So what is Multivariate testing?
MVT can be described as a quantitative way to understand and influence your customers’ user experience. According to Wikipedia multivariate testing is “a process by which more than one component of a website may be tested in a live environment. It can be thought of in simple terms as numerous split tests or A/B tests performed on one page at the same time. Split tests and A/B tests are usually performed to determine the better of two content variations, multivariate testing can theoretically test the effectiveness of limitless combinations. The only limits on the number of combinations and the number of variables in a multivariate test are the amount of time it will take to get a statistically valid sample of visitors and computational power.”
The primary purposes of testing in order of importance (according to Jupiter research) are:
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Site content
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Promotions
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Step processes e.g. checkout
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Landing pages
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Site navigation
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E-mail marketing
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Performance metrics e.g. revenue, average order value
In setting up an MVT, Jupiter recommends that you:
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Create hypothesis for testing on user behavior e.g. lifestyle images connect better with target segment than product images.
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Establish multiple objectives such that not only conversion is tested but the general interaction with the site and fulfillment of KPI e.g. revenue/ user.
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Segment test participants based on the hypothesis – go narrow rather than wide.
As I start to use this new tool I will update my blog with more in depth views on this emerging field of optimization tools.
Categories: Web Analytics · eBiz Merchandizing · eBiz Payment & Checkout · eBiz Promo & Pricing · eBiz Upsell- & Crossell
Tagged: A/B testing, merchandizing, Mulivariate testing, optimization of site, pathing and KPIs.
It seems to me that Internal Search (customers searching within your site) is an area often overlooked in the daily tasks of e-business managers. To put things in perspective, up to 20-30% of a site’s revenues can come from internal search traffic. Obviously these searches may originate from an external search but key point remains the same – the information you can get from internal search analytics is vital in your quest for an optimized transactional site.
Although the general traffic flowing through internal search maybe as low as 1-5% there are some important differences that compensate for the apparently low portion of traffic. First, the click through rate for search is very high. A ball park figure would be 40-70%. Secondly, the conversion on internal search is very high. I have seen 2x, 3x and even 4x the average visit conversion.
It is difficult to say whether less or more searches is a good thing when measuring effectiveness of internal search. Some users, that know exactly what they want, will, much like in external search, be very specific on what they are looking for e.g. “Sony 40″ D3500”. Naturally, these users will have few searches that generate high click through rates. This is also the case in the support space where most people won’t yield until they have solved their specific issue. Conversely, a large number of internal searches are very broad and generate less click through and successful searches.
There are some key areas where the intelligence derived from internal search can be leveraged:
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Understanding the search patterns to optimize external search keywords strategies and search engine optimization.
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Optimizing merchandizing, pathing, and content on the site according to trends and developing needs.
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Spotting trends as well as tweaking product portfolio, bundles and promos (see below how Google links searches for ”Britney Spears” against specific events in external search).
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Actively “guiding” your customers to transactional areas using “recommended links”.
So if you haven’t already, start integrating the intelligence around internal search in your demand generation, site optimization and brand marketing teams.
Categories: Web Analytics · eBiz Demand Generation · eBiz News and Trends
Tagged: key applications of internal search intelligence., Optimizing internal search
I don’t see a clear correlation between price point levels and Site visits. It would be an intuitive relationship, i.e. low prices lead to more visits, but actually in my work this is not a strong relationship.
Time after time I see how price point drives convergence and conversion especially. Site visits is much more dependent on magnitude of advertising and advertising spend. To some extent also the nature of leads generation tactics that you are driving (e.g. low end products in affiliate channel will drive a lot of traffic but not necessarily a lot of receipts).
So bottom line, if your problem is traffic, be careful overly using your pricing tool. If you lack weighted average price point mapping tools beware of tanking your margin for the wrong reason. Chances are your prices are right but that you need to step up advertising, affiliate and search engine optimization activities.
Categories: Web Analytics · eBiz Promo & Pricing
Tagged: driving traffic with aggressive price and promo, Using price points to drive site visits
