From Web Analytics to Engagement Analytics. Quality over Quantity

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1 From Web Analytics to Engagement Analytics Quality over Quantity

2 Table of Contents Executive Summary...3 Engagement Analytics...4 Measuring Quality with Engagement Value Points...5 Engagement Analytics Examples...7 Overall Marketing Effectiveness...7 Traffic Sources and Marketing Channels...9 Campaign Performance...11 Original Source Attribution...13 Entry Pages...14 Accelerating Marketing Effectiveness with Engagement Analytics

3 Executive Summary Today marketers face the same problems online as they did at the turn of the century when one of America s great business innovators, John Wanamaker, made the oft-repeated statement: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." This is of course highly peculiar since in the online world everything is measurable in the most excruciating detail. So what is wrong? Firstly, we should be measuring quality, not just quantity. But current web analytic tools aim to measure and increase the quantity of people coming to a website. Web analytics is all about measuring aggregate average quantities; for instance, number of visits, percentage of new visitors, page views, bounce rates, top assets downloaded, most popular entry pages, most visited pages, and so on. Secondly, we are not connecting the dots. is tracked independently from the web which is tracked independently from the mobile web, social media and mobile apps. When you meet with a customer online, you are essentially engaging in a conversation. An exchange of communication and commitment is taking place. The level of commitment exhibited by your customer is the secret ingredient of quality that we call the Engagement Value. And it is the very basis of the next generation of Engagement Analytics as it is built into Sitecore's Customer Engagement Platform. Engagement Analytics gives marketers the power to answer Wanamaker's question. Marketers can now understand what drives engagement and produces bottom line results, not what drives crowds and burns money. 3

4 Engagement Analytics Engagement Analytics measures quantity, quality, and the relationship between the two. Quantity is everything you know from web analytics today. Quality is the level of commitment achieved by your customers. Online marketing analytics tools somewhat express quality as conversion percentages, such as visitors having signed up for a newsletter. The trouble with this is that when you have more than three conversions the complexity gets overwhelming as the chart of multiple campaigns below clearly shows. Marketers need this barrier of complexity distilled down to a simple measure of quality; which we call the Engagement Value. Another measure used by Engagement Analytics is Relevance, the relationship between quality and quantity. If, for example, you run two identical AdWord campaigns on Google and Bing, and the latter has twice the quality per visit, then you must conclude that the ad running on Bing has more relevance for the customers it attracts. Marketers using Engagement Analytics can learn exactly which part of their marketing mix creates the greatest impact, which parts of their website draw the highest quality visitors, and where they should spend their marketing dollar. An active online marketing strategy can involve hundreds of campaigns, like these shown here. Tracking conversion rates for so many campaigns can be overwhelming. 4

5 Measuring Quality with Engagement Value Points When you meet with a customer online, you are essentially engaging in a conversation. An exchange of communication and commitment is taking place. Every website has these critical points of engagement where your customer performs a commitment exchange. These are points that increase the visitor s engagement, where the visitor and vendor build trust and communication. These are the points that we capture and measure in the Engagement Value. For example, just visiting a web page requires little trust and is a one-way transfer of information. However, registering for a newsletter requires a modest amount of trust between the visitor and site owner. And the information exchange that comes from that newsletter in turn increases trust and communication eventually leading to more commitment. Most websites have multiple critical points of engagement along this ongoing conversation. Each of these critical points has an Engagement Value based on the level of commitment. It s like shopping in the brick and mortar world. The owner of an electronics store might feel some satisfaction watching people attracted to window displays of TVs, but there is little engagement with the people. The owner gets excited when people walk into the store. That takes a modest amount of engagement. When a browser asks 3D TV specific questions, they show an even higher level of engagement. Finally, when the prospect buys a 3D TV their engagement is undeniable. What constitutes commitment will vary for each kind of business: Lead Score vs. Engagement Value Lead score, as known from some vendors, is very different from Engagement Value. Lead score is what you use to identify customers you believe are showing signs of wanting to commit, but not yet having committed. Lead score is commonly only of interest in B2B settings and is used to surface prospects to the sales force in combination with GeoIP information. While Sitecore can capture lead scores it is not usually of importance in Engagement Analytics. For a commerce site, the sale of goods is a straightforward commitment. The Engagement Value could simply be the dollar amount sold. The more you sell, the larger the commitment. For many sites, commitments such as signing up for a newsletter, requesting a sales call, asking a question, creating an account, or revealing your purchase timeframe, all constitute undeniable commitment on behalf of the customer. We call these transactional commitments. They require a deeper commitment than just viewing a page or downloading an asset. Going back to the example of a commerce site, signing up for a newsletter or subscribing for product updates, are also acts of transactional commitment that should be given an Engagement Value. Some sites may not have points with deeper transactional commitment. On those sites you may need to place the Engagement Value on a specific page being viewed or a specific asset being downloaded. These points are called referential commitments. Use them cautiously. Referential commitments 5

6 can lure you into faulty conclusions about your website s effectiveness. Only use referential commitments when your website has no points that require the deeper transactional commitment. Two examples where referential commitments cause faulty conclusions are book bestseller lists and Top Hits song lists. Just being on either list guarantees greater visibility and a perception of desirability and quality. Gaining a spot on the list creates a self-fulfilling prophecy. Once a book or song is on the list it s guaranteed more sales, which keeps its sales high. The books or songs only fall off the list when the sales potential is saturated or the audience becomes bored. This same effect can happen by putting an Engagement Value on an asset and then giving the asset more marketing effort because you believe it has more value. With more marketing effort it gains more Engagement Value and becomes a self-fulfilling prophecy. There is far more we can do with Engagement Value Points (EVP) than identify visitors who accumulate value. EVP are key to Engagement Analytics and key to increasing your marketing effectiveness. EVP are critical to identifying the effectiveness of marketing through the use of your website, campaigns, mobile web, landing pages, and more. For a website with occasional transactional commitments the Engagement Value Points might be: Newsletter Registration Online Pricing Quote Request for Demo 25 EVPs 50 EVPs 100 EVPs Even with just three such transactional commitments, Engagement Analytics works wonderfully well. The number used as an Engagement Value Point is not of importance but the ratio between EVPs is important. Here the marketer has established that four newsletter registrations have the same value as one demo request. Often you will have evidence to help you easily come to such conclusions. In a worst case scenario you will at first have to use your intuition and later you can validate and refine the Engagement Value through analysis. How do we create and track these Engagement Value Points and develop a system of Engagement Analytics? The Sitecore CMS makes it easy to apply Engagement Value Points to critical points on a website, such as registrations and demonstration requests (without coding, of course). Engagement Value Points are like a currency, which when allocated properly can be converted into real currency. There is an exact correlation in your website between where there is a high Engagement Value and where revenue is generated. This makes Engagement Value an excellent tool for forecasting revenue. 6

7 Engagement Analytics Examples Sitecore s Engagement Analytics make it straightforward for any marketer, not just web analysts, to identify how and where to improve marketing effectiveness and customer engagement. Let's take a look at a few examples. Overall Marketing Effectiveness Most web analytics charts show the change in visitors over time. However, if we also consider the total EVP accumulated by visitors we can see whether our online marketing efforts are increasing the overall value we deliver to visitors. The figure on the right below shows that while the rate of visits is increasing, the total EVP rate is decreasing over the last quarter. This means marketing effectiveness is decreasing the value being delivered per visitor is decreasing. A good way to measure this rate of marketing effectiveness is with Relevance. Relevance is the Value per Visit. You can also think of it in these terms: if your website has more relevance to your customers, your marketing effectiveness will increase. 7

8 In traditional web analytics, as shown in this Google Analytics screen, traffic simply measures how many visitors come to your website. Systems like this only measure quantity and don t evaluate quality or which traffic sources produce visitors with the highest quality and value. With systems like these your website traffic could be increasing while your marketing effectiveness decreases-yet you wouldn t even know it. Also, web analytics systems like these can only analyze a cross-channel marketing mix after extensive and time-consuming customization and segmentation. Engagement Analytics shows you the value and marketing effectiveness of your website over time. It measures how relevant your website is to visitors and their level of commitment. In the figure above, the green Relevance bars (value/visitors) is greater in Q2 than in Q1. This was caused by a decrease in visitors with a simultaneous increase in value - although there were fewer visitors in Q2 their quality was better. The result was increased marketing effectiveness in Q2. In Q3 the grey line shows a significant increase in visitors, causing the green Relevance bar to drop back to Q1 levels. That means the website has significantly increased its visitors, but the Value per Visit has returned to previous Q1 levels. Marketing managers should use the Executive Insight Dashboard to investigate what traffic types and campaigns caused such an increase in Relevance in Q2. Then they should explore how they can again increase visitor levels while retaining high Relevance. 8

9 Traffic Sources and Marketing Channels In Engagement Analytics visits are segmented into their respective traffic source or channels. For example, traffic from Google and Bing aren t just "search engine traffic". Search engine traffic is broken down into paid traffic (AdWords), organic search engine traffic (visitors that searched for a term without using your company name), and organic branded search engine traffic (visitors that searched for a term including your company name). This enables you to relate each marketing result directly back to the channel and marketing role responsible. Web analytics can show you the total traffic from a source, but it can t show you the Engagement Value or Relevance of that source, and normally the sources do not map to meaningful initiatives in your marketing department. The following figure displays a Google Analytics report giving a high altitude view of visits by traffic source. From this view you cannot distinguish the important difference between traffic driven as a result of brand awareness (branded search engine traffic), organic search engine traffic (where you normally invest your SEO efforts), and paid advertisements. If you want to differentiate between a wide variety of traffic types, then out-of-the box web analytics systems require extensive and time-consuming segmentation and coding. For many companies this extra overhead means it never gets done. As a consequence your web marketing isn t as effective as it could be. With the Engagement Analytics report on the right you can see the percentage of total Engagement Value and Relevance (Value per Visit) for each channel. You can even drill into the analysis to see the Engagement Value or Relevance by grouped or individual campaigns. The data is there so you can make accurate marketing spend decisions. 9

10 Traffic source information for web analytics systems focuses on an ITskewed view of sources of aggregate visitors. To see Traffic Source detail in Google Analytics you have to drill down and this still won t show you the Engagement Value or Relevance by traffic type over time. Web analytics won t give you insight into which traffic source or type contributes to visitor commitment and marketing effectiveness. Using Engagement Analytics you can compare the marketing results of different traffic types. This gives you the power to tune cross-channel marketing for optimal effectiveness. In this figure, the extracted pie wedge shows that organic SEO efforts are responsible for 19.7% of the total site value. The Relevance of organic SEO is 1.71, shown by the topmost green bar. The rightmost table shows that Organic SEO Relevance has increased by almost 32% from the previous year s quarter. This type of analysis makes it is easy for you to decide if your SEO investments are paying off compared to alternative investments. 10

11 Campaign Performance With Engagement Analytics it s obvious which campaigns produce the total greatest value and the highest relevance just compare the Total Engagement Value and Relevance for each campaign. Many web analytics systems identify the campaign that produces the most visitors, but they can t help you identify the campaigns that produce the highest quality visitors. The figure on the left shows a Google AdWords screen designed to help you budget your marketing spend between multiple campaigns. Identifying greater detail in web analytics requires coding custom goals for each campaign, creating segmentation, and building reports. All that takes time, people, and technical skills. The figure on the right shows the Engagement Analytics chart that helps you quickly identify the campaign producing the greatest value. When you select a campaign from this chart a pop-up shows you how the campaign s Relevance, its Value per Visit, is changing over time. Engagement Analytics is ready-to-run with minimal overhead. 11

12 Most web analytics systems can show a lot of detail, but that detail makes it difficult for marketers to identify which campaigns produce the highest quality and relevance. In this example, Google AdWords is focused on budgeting your ad dollars rather than helping you maximize your marketing results. Engagement Analytics quickly show you which campaigns produce the best results. In this figure the chart behind shows campaigns sorted by Relevance (Value per Visit). The green bars in the rearmost chart show each campaign s Relevance, so it s easy to see which campaign produces the greatest marketing effectiveness. The pop-up chart shows how the Value, Visits, and Relevance for the selected campaign change over time. 12

13 Original Source Attribution By tracking each visit of each visitor we can attribute Engagement Value or Value per Visit back to the origin of the first visit. This powerful information enables marketers to understand which original activities drove future engagement. The figure on the right shows the Value per Visit for visitors who first came to the site through each of the traffic types. With Engagement Analytics you can determine which traffic type, pages and transaction points are most effective over a long sales cycle. An important part of marketing analysis is identifying the first point of contact for high value visitors. This lets the CMO know where to focus marketing efforts to attract new visitors. The chart on the right shows the Relevance for first contacts. Newsletters, paid search, and blogs have the highest Relevance for contacting new visitors who later accumulate a high value. This is critical information for the CMO who wants to know which traffic type is most effective. The chart on the left shows the Relevance for all traffic types across all visits over time. Over the long term newsletters, paid search, and analyst reports are most effective in delivering Relevance. From these two charts we can see the marketing mix required to capture initial contacts and then retain them over a long sales cycle. 13

14 Entry Pages Engagement Analytics can show you which entry pages lead to high values. The figure on the right makes it obvious which entry pages accumulate the highest relevance. Most web analytics, like the Google Entry Page screen on the left, are designed to only show which entry pages have the highest number of visitors. While this might help you increase the number of visitors to your site, it does nothing to help you increase the quality of visitors to your website. In the figure on the right you can even drill down on a specific entry page to see which traffic sources and search keywords lead to a good performance on the entry page in question. Web analytics software, like this Google Analytics screen, enables you to see which entry pages have a lot of visitors. You can even segment the view to see how visitors change by time frame, country and other segments. While these views may help you identify which entry pages attract a high number of visitors they won t help you increase the quality of visitors without an extensive overhead of segmentation and coding. Engagement Analytics enables you to quickly see which entry pages contribute most to the value of your website. The campaigns, keywords, or topics used in these high-value entry pages can be used to increase the value of other areas of your website. In this screen campaigns have been sorted by the Value per Visit or Relevance. Mousing over a campaign shows how it has contributed to marketing effectiveness over time. 14

15 Accelerating Marketing Effectiveness with Engagement Analytics Every marketing department needs to know exactly how and where they engage the high-value visitors that are most likely to become prospects. If you can t determine how and where to engage high-value visitors, then you are doing shotgun marketing you are wasting money by broadcasting campaigns across a wide swath in the hopes of hitting something of value. In the high-speed world of web marketing you can t survive with this approach. To accelerate your marketing effectiveness you must know how to engage customers where they expect and want to be engaged. And you must coordinate that across multiple marketing channels. Engagement Analytics is clearly the way to make your cross-channel marketing more engaging and effective. John Wanamaker would have loved online marketing and Engagement Analytics. But, he d have to change his quote about wasting half his marketing budget. With Engagement Analytics he would be saying: I know why I spend each marketing dollar and I know exactly where to get the best impact with my next marketing dollar. Many companies spend hundreds of thousands of dollars on Google AdWords for their own brand. With Engagement Analytics you can quickly determine if these funds might be better allocated to other areas. 15

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