Dear Marketer: Have you ever looked into the wrong end of a telescope?
Published on April 2, 2003
Everything’s little. Often, that’s the way interactive marketers view their world. The web has been called the most accountable of all media. Virtually everything can be tracked. That can be bad news because the amount of data generated can be overwhelming. This intense focus on data is like looking into the wrong end of a telescope, and it prevents marketers from clearly seeing if a website is meeting its business goals.
Many people stopped “analyzing” web logs because of the effort required to find actionable data. It’s not unusual; people tend to avoid frustrating messes. Engineers created web analytic software (seemingly for engineers) to take the raw data a server stores in its logs and convert it into structured information, creating reports and charts. It sounds useful, but if you’ve worked with these tools, you know better.
It is amazing how many online businesses don’t use web metrics regularly. Only one in five companies tracks customer behavior using analytical tools. Of those that do, according to Jupiter, 28% of site managers distribute reports that are generally ignored.
The biggest value of the web is the ability to measure and test everything. You can even measure when there’s nothing you can do with the information. There was a time when web analytics companies competed to generate the greatest number of reports. Skimming through those reports is like browsing War and Peace.
Gartner recently wrote, “It has long been said you cannot manage what you cannot measure. Nowhere is this more true than on the web—where examining what works and what doesn’t directly influences the bottom line.”
A Past of Poorly Defined Marketing Objectives
A business-oriented demand for clearly defined metrics and analysis is lacking because of poorly defined marketing objectives. The responsibility for developing website traffic analysis fell to engineers who had different goals. For them, it was important to know that 78% of traffic is from Virginia and that 88% of visitors use Windows 98. They generate hundreds of reports that don’t help bring in cash.
A Forrester Research study illustrates a shift to a return on investment (ROI) focus as the web matures. The web has gone through four phases:
- Pioneer Days – the technology phase (gopher and BBS);
- Great Expectations – the design phase (Cool Site of the Day);
- The Marketing Phase – remember being told by a sock puppet that purchasing dog food online was a whole new economy?; and
- The Business Phase – business objectives and ROI are critical.
- The technological perspectives necessary at the web’s genesis produced the guiding methodologies that remain at the heart of all web development. These methodologies are derived from an engineering perspective that focuses on creating efficient systems, allowing users to manage their tasks quickly and effectively.
Alongside the web’s technological development, a number of highly respected specialists have examined the interface elements of usability and information architecture, but it is almost always within the context of the technician’s metaphors.
What has been missing, or discounted, is the “softer-science” business perspective that understands that outcomes are never merely binary and that variables can never be perfectly defined. This should be the perspective of not only the marketer, but, more importantly, the truest experts on the nature of your client’s business—your client and their staff.
There is an increasing awareness of the necessity of incorporating business models and strategies into websites. Unfortunately mechanical and technical expertise still control the content, the creative presentation, and the persuasive marketing issues that have nothing to do with technical specialization. The challenge is to internalize the messages that other businesses have learned. Marketers and clients should acknowledge the inherent validity of their accrued data and then move beyond their former practices of design and development.
I recently met with a technology company, which has tens of thousands of employees and tens of billions in sales. I assumed a company that large would have sophisticated marketing, management, and data analysis capabilities. I never imagined a company that large would lack the most rudimentary understanding of marketing systems, ROI tracking, or defining business objectives in a measurable way. But that was exactly the case.
I consulted with another company that has $1 billion in sales and several divisions. I pointed out that I was unable to discuss the ROI of its website because the company hadn’t defined clear business objectives. My clients were surprised (and maybe a bit insulted), but eventually they agreed. It was easy to explain the “I,” the challenge was in defining the “R.”
One of the world’s largest office supply companies launched its e-commerce site with the clear goal to “make money,” and that it did. The senior vice president in charge of the effort boasted of making $100M last year on the web. While it sounded impressive, he didn’t know that industry statistics showed that only 25% of web visitors ever complete a transaction, leaving a potential $300M of revenue on the table. During this time, the company did not use any web analytics tools to measure the effectiveness of their “make money on the web” business objective. Within six months of the senior vice president’s announcement, the company declared bankruptcy, and he was fired. The company had no measurable business objective or measurement tool to provide valid feedback.
These cases illustrate “Bubblegum Marketing.” Bubblegum is sweet and juicy until the taste runs out, and it has little, if any, nutritional value. But you go for the next piece anyway. A recent eMarketer report stated the following:
“23% of marketers responded that they don’t know what their company’s primary interactive marketing business objective is. And 56% of marketers did not have tools in place to measure their marketing performance.”
As Jeff Lash stated beautifully, “it is really easy to meet your objectives if you don’t really have any!”
When we define and meet objectives, analytical tools produce clearer e-metrics. Objectives are what you want to do and how you will measure success. A proper objective must be quantifiable, such as 200 qualified leads in the next 30 days or gross product sales of $15 million in the next quarter. Once defined, objectives must be broken down into their component parts and prioritized. Someone must be accountable for each objective.
On the most elemental level, commercial websites come in four flavors, each with a basic set of measurable data. Every commercial site you’ll come across is a subset of one of these four variations:
- E-commerce sites. The objective is to increase sales and to decrease marketing expenses. On the most basic level, you want to measure sales, returns and allowances, sales per visitor, cost per visitor, and conversion rate. On a more advanced level, you want to measure inventory mix, trend reporting, satisfaction, and other predictive modeling techniques.
- Content sites. The objective is to increase readership, level of interest, and time spent on the site. You want to measure visit length, page views, number of subscribers, and cancellations.
- Lead-generation sites. The objective is to increase and segment lead generation. You should measure white paper downloads, time spent on the site, newsletter opt-ins, reject rates on contact pages, and the leads-to-close ratio.
- Self-service sites. The objective is to increase customer satisfaction and decrease support inquiries. You should measure decreases in visit length, inbound call-center metrics, and customer satisfaction metrics.
Once you can define your website’s objectives, you can measure them effectively using the different benchmarks defined above. The next step comes when you start assigning objectives to each page of your site. Using Persuasive Information Architecture you assure yourself that every action page of your website answers the following three questions:
- What action needs to be taken?
- Who needs to take that action?
- What information does the person require to take the action we desire?
With those questions defined, you can develop a system of testing, measuring, and optimizing, putting you at least one step ahead of your competition.
If you’ve defined your objectives down to a granular level in advance, you’ll always know what to measure and where to go from there. When you don’t know where you’re going, as the Cheshire Cat told Alice, “it doesn’t matter which way you go.”
Bryan Eisenberg is one of the principals of Future Now, Inc. He has been helping companies realize that to maximize results it is essential to incorporate expert persuasion techniques into website design, email marketing, development and implementation. He is the publisher of Future Now’s award-winning newsletter GrokDotCom, and he is the author of the weekly ClickZ column ROI Marketing. Bryan is also a adjunct faculty at Roy H William’s Wizard Academy and is a co-author of Persuasive Online Copywriting and The Marketer’s Common Sense Guide to E-Metrics. When he is not busy persuading folks on the web, he is trying to persuade his toddler to eat dinner, take a bath, go to sleep