Friday, October 27, 2006

Traffic or Conversions?

A couple of years ago, when I worked for a search engine marketing and analytics company, I was speaking to a potential client about his paid search engine marketing efforts. He was explaining to me how excited he was that he had just increased the traffic to his e-commerce web site by about 10,000 visitors.

After listening to how he used Google AdWords and Yahoo to improve his ad rankings, I dropped a bomb on him. I explained how great it was that he was getting more traffic, but I finally asked him....

"So what's your conversion percentage for those keywords you bought?"

He said, "My what?"

I said, " Do you know which keywords work well and which ones don't ?"

There was a pause.....he didn't know the answer.

I then asked, "How do you know if the money you're spending with Google and Yahoo isn't being wasted?"

He said, "Because I'm getting a lot more traffic."

I then told him, "Do you realize that you can be spending $0.50, $1.00, or even $2.00 per click on keywords that don't lead to a sale for you? By focusing on the successful keywords (the ones that drive sales) and weeding out the non-successful keywords (the ones that don't drive sales), we can optimize your PPC advertising so that you're left with nothing but keywords that drive sales for your business. We can save you money and drive more sales at the same time."

He said, "We'll, how do I track them?"


The reason why I bring this story up is because many companies are still too focused on driving traffic to their sites and they're not putting enough energy towards improving their conversion percentages (ppc keyword conversion, internal search keyword conversion, site conversion, etc).

Rule #1: Don't assume just because you get more traffic that your leads or sales are going to increase.

The large online electronics company I consulted for had millions of visits per week but their sales conversion % was only around 0.7%. Based on the amount of traffic that this site received, I soon realized that if I could just improve their sales conversion by even 0.1%, then that increase could lead to thousands of dollars in additional earnings for the company. At that point, I began optimizing the web site to improve sales conversion.

This electronics site also had traffic that was increasing month-to-month on their home page. I soon found out that the #1 most trafficked area on the home page was their internal search box. And after digging deeper, I learned that 33% of the internal searches led to a "No Results" page. This of course meant that one third of the internal search keywords being used (by visitors) weren't very effective at converting browsers into buyers. With this information in hand, I began optimizing internal search conversion.

In the examples above, there were two totally different situations where 'conversion' needed to be optimized (sales conversion and internal search conversion). When web analysts talk about 'actionable data', this is what we mean. We're gathering data from the web analytics tool and then taking action to improve low order totals or conversion percentages for example.

Don't get me wrong, we all want more traffic because it means our site is getting visibility on the web. But remember to always keep a very close eye on how well your site is converting on all aspects (online advertising, internal search, etc.). Monitoring conversion and taking action to improve it is the key to a successful online business.

As Eric Peterson once said, " do you know you’re successful if you’re not measuring your success?" You can't put it any simpler than that.

Tuesday, October 24, 2006

Century Mark!

Today my blog surpassed the 100 visits mark. Thank you to everybody who has visited the blog, read my posts, and sent me positive emails about the blog.

I tagged it with Google analytics and have been tracking its progress. According to the Geo Location report, I've got readers from all over the world! It's great to see how quickly web analytics is growing.

Next stop....500 visits!

Friday, October 20, 2006

Comments Update

I changed my settings so that you no longer need to have a registered Blogger account to leave me a comment. Feel free to add your comments to any of my posts below.

Matt Lillig

Thursday, October 19, 2006

Click Fraud: It's More Than Just Cheating Competitors

What if I told you that I could be making $25 to several thousand dollars a month just by clicking on a bunch of online advertisements which I had no interest in?

Would you care?

What if I told you that some of these links I was clicking on were your links on which you're spending between $0.40 to $8.00 per click for?

Let me put it this way.....I could be stealing away your hard earned money and burning a hole in your ad spend budget.

I should have your complete attention by now.

Well, according to the cover story in the October 2nd 2006 issue of Business Week, an investigation has revealed "a thriving click-fraud underground that is populated by swarms of small-time players, making detection difficult."

And how easy is it these days to start making money off of click fraud? Too easy. A couple from Minnesota said they dabbled in click fraud last year and made more than $5,000. They employed a simple scheme in which they "set up dummy web sites filled with nothing but recycled Google and Yahoo advertisements. Then they paid others small amounts to visit the sites, where it was understood they would click away on the ads." They then split the resulting revenue generated from their dummy web site with the search engines.

With spending on internet ads growing faster than any other sector of the advertising industry and experts estimating that 10% to 15% of ad clicks are fake these days, you can start to see how click fraud is becoming a major issue.

But what makes up Click Fraud? Try these new terms on for size....

Parked Web Site: A site typically with little or no content except for lists of Internet ads, often supplied by Google or Yahoo; many of them are the source of false clicks.

Paid-To-Read: A PTR site pays members to look at other web sites and offers from marketers (ads); often used to generate false clicks on parked web sites.

Clickbot: Software that can be used to produce automatic clicks on ads; some versions employed in click fraud can mask the origin and timing of clicks.

Botnet: A collection of computers infected with software that allows them to be operated remotely; networks of thousands of mechanism's be used in click fraud.

Even though it sounds like some kind of sci-fi movie with all of these new high tech terms, how bad has click fraud actually become? The Business Week article talks about one Atlanta based businessman who estimates that click fraud has cost his company $100,000. On the other hand, a Russian software developer is making $10,000 a year from a clickbot he sells. And click fraud is so simple these these days that clickbots can be downloaded from the internet. The article states that "clickbots are popular among online cheats because they disguise a PC's unique numerical identification, or IP address, and can space clicks minutes apart to make them less conspicuous." It also states that "more skilled Chinese programmers modify the clickbots to outwit the American search engines (like Google and Yahoo)."

So what are the big search engines doing about click fraud? "Google and Yahoo say they can identify automated click fraud and discount advertisers bills accordingly." But advertisers have to prove that they are being cheated.

My question is, if clickbots are masking IP addresses, how is an advertiser supposed to prove they are being cheated?

I find it funny that as I'm writing this post, Google just released its earnings release. Once again, it was better than expected. Why? Because as I mentioned before, spending on internet ads are growing faster than any other sector of the advertising industry. And that means....more ads can be clicked. The more ads that are clicked, the more money search engines like Google and Yahoo make. And yet, click fraud is thriving more than ever.

But, I guess if more people are spending money to adverise with search engines, then apparently click fraud isn't a high priority issue for most advertisers.....

.....just don't tell the guy from Atlanta this!

Wednesday, October 18, 2006

Wanted: "Dedicated" Web Analyst

I recently read a post on the Yahoo! Web Analytics message board that opened my eyes again to the pain of companies trying to forge ahead with finding a web analyst and getting involved with web analytics. In this case, the poster talked about how he had suddenly found himself as "the guy responsible for driving the web analytics strategy".

Reading that quote immediately brought back memories from when I used to be an account manager at one of the web analytics vendors. I can't tell you how many times I heard war stories from employees who had received the news from their managers that they were now in charge of web analytics for the company. These clients would tell me that they were now expected to run the web analytics strategy on top of their current job descriptions. As an account manager, the first thing that came to my mind was "sympathy". Knowing what I knew about the time and dedication it takes to run a successful analytics strategy, I just couldn't fathom how these employees were going to manage web analytics on top of their current work loads.

Now I can understand how somebody could implement Google Analytics and only check the reports once a month. Why? Because it's free and by not looking at the reports, you're not burning a hole in your wallet. But somebody please tell me why any company would ever spend over $10,000 (or more) on an analytics package and not have a dedicated person in place to read and interpret the data? It just doesn't make sense.

I'm here to say that being a "Web Analyst" is definitely a full time job. A successful web analytics strategy goes hand in hand with a dedicated web analyst. I've heard the experts out there say this time and time again, yet companies still try and take the shortcut route. Rather than moving in a dedicated web analyst, they end up dumping the analytics into the lap of one of their employees who already have too much to do. And note the word "dedicated". I'm not saying that a company has to go out and spend the money to hire an experienced web analyst (though it helps to ensure faster results), but at a minimum they should move a current employee into a dedicated web analyst role when jumping into web analytics. This way the employee can put their full attention into improving the online business and not be distracted by other job requirements.

So if you're a manager reading this post and you're trying to figure out why you're not getting a good ROI from your web analytics package, then you may want to take a step back and ask yourself this one simple question, "Are we taking full advantage of our web analytics investment by having a dedicated web analyst on staff?"

Monday, October 02, 2006

How many stats would a stats analyst track if a stats analyst could track stats?

Does this scenario sound familiar???

You've got 3-5 traffic dashboards to update each week....
One major traffic presentation due each month....
2-4 random employees asking you to pull data for their group and build a dasboard for them each week (by the way..."Make sure those reports are sent automatically")....
and finally train different managers on the value of using web analytics.

Sounds like a pretty busy job in itself, right? Wrong. I forgot one small still need to OPTIMIZE THE WEB SITE!

But how in the world is a web analyst supposed to find the time to optimize the web site when they're spending most of their time pulling data, building dashboards and reports, and training different groups of people within the company? Well, based on my experience as a web analyst, I believe one needs to work closely with their manager, prioritize their work, and be stern. No, not Jim Sterne (although, I'm sure that would be helpful in a web analyst position) but stern as in putting their foot down.

A web analyst should work closely with their manager and keep them informed of their workload. Many times, managers (as busy as they are) don't realize the many different types of reports and dashboards that the analyst has going on at one time. Nor do they realize that the analyst is constantly being bombarded by other managers and employees in seek of a personalized dashboard or report. Prioritization should be a big part of the conversation between the manager and the analyst. If the analyst has a clear picture about high priority goals that need to be met, he/she can effectively use their time to build out the proper reports and dashboards.

While it's very important to build out reports and dashboards, that's only one aspect of being a successful web analyst. The other part comes in being able to optimize the web site. A web analyst needs time to, well, analyze! But he/she can't do that if they are spending all of their time building reports and dashboards for people. This is where the stern part comes in. There comes a time in every web analyst's life where they have to put their foot down and say, "I'm sorry (place a coworker's or manager's name here), I simply cannot build that custom report for you right now because I have some high priority issues to take care of."

A web analyst needs to put their foot down at times, otherwise they'll be up to their ears in building reports. In my case, I wanted to make everybody happy by pulling data and customizing reports for them. However, I soon realized that I needed to be spending more of my time analyzing and optimizing the web site. And we all know that this is where the real fun is at. Running A/B tests or multivariate testing, tracking the success of internal search, tracking the success of promotions, using data to help the development team with page layout and navigation, etc., are all things that make make the job exciting. Why? Because you finally get a chance to see if your analytical assumptions are correct!

Making sure you have time to analyze the site and come up with actionable ideas is extremely important to being a web analyst. Setting aside time to come up with new ideas is what made 3M Corporation so successful. They give their employees the option to spend 15% of their work week pursuing individual projects of their choice. Most of the time, these individual projects result in brand new products for 3M. In 2000, 3M made more than 60,000 products. Nearly 35 percent of its total sales, or about $5.6 billion, came from products that had been introduced during the prior four years, and another $1.5 billion came from products introduced during 2000.

Knowing that little bit of information, think about the success that a web analyst can make if he/she has the time to optimize the web site and come up with actionable ideas. Who knows, maybe you can help your company become the online version of 3M!