Thursday, April 21, 2011

Online Marketers Listen Up. There's Gold In That Data!

It happens way too often and it's painful to watch.  Extra revenue being flushed down the toilet because online marketers aren't taking a close enough look at what their web analytics reports are telling them.  They've spent the time to properly implement their tracking solutions but they aren't spending enough time in their solution looking for insights. 

For online marketers, there could be a whole slew of reasons as to why they're not paying closer attention to their web analytics data:

- Perhaps a new rep was hired and he/she didn't realize they had the data available
- Perhaps they have a 3rd party agency managing their data for them
- Perhaps they don't know how to analyze the data and need a consultant
- Perhaps they're just lazy and don't care

While there's always reasons why one hasn't looked closely enough, the bottom line is that you have to pay close attention to what your data is telling you so that you can capitalize on it!  Web analytics data isn't just a bunch of numbers on a page (though it may look like it to some).  Web analytics data provides you with insights such as: who your target audience is, where your roadblocks are, whether or not you're turning a profit, and who you should be spending your online budget with.

With that said, I want to introduce you to a good example of an online marketer who hasn't been paying close enough attention to their search engine referral report data.  And because of this, they're missing out BIG TIME on driving additional revenue to their bottom line.

The data provided below for this particular marketer (in the UK) was generated during the past several months...

Larger Image View:

By looking at the data from this report, we can see that:

- Google is driving 91% of the referral traffic (combo of paid and organic search)
- Google drives a higher Avg. Order Value for each sale
- Yahoo drives a much higher Conversion Rate
- Google drives a lot more Revenue
- Yahoo drives a much higher ROAS (Return On Ad Spend)
- The marketer spends (Cost) a lot more with Google versus the other three engines

Now let's analyze the data for insights.  Do you see the glaring question that comes from this report above (minus AOL since their search is enhanced by Google)???

Yes!  Why isn't this marketer spending more with Yahoo to drive more referral traffic when more than half of their visitors convert, the ROAS is more than double Google's, and the Avg Order Value is nearly the same as Google's?

Now don't get me wrong, I'm not saying the marketer should pull budget from away Google and use it for Yahoo (because Google's ROAS is also very good) but they should definitely be spending a lot more with Yahoo with the kind of performance data it's showing!  Sure spending more on Yahoo is going to drive up their costs/spend but at a 6,800% return-on-ad-spend, this marketer is missing out on a big revenue opportunity!!

Also, look how much more the marketer is spending with Bing (Cost), yet look at the return they get compared to Yahoo.  Does that make sense?  No.  However, that will soon change and become even more important as the Yahoo/Microsoft alliance moves into the UK in the near future.  Using the same data above, here's a breakdown and summary of what a Bing/Yahoo alliance currently looks like for this marketer compared to Google....

Referral Traffic
Google: 91%
Yahoo/Bing: 3%

Search Engine Spend/Cost
Google: €164,409 ($235,606)
Yahoo/Bing: €28,037 ($40,198)

Average Order Value
Google: €1,759 ($2,521)
Yahoo/Bing: €1,662 ($2,382)

Google: .43%
Yahoo/Bing:  .52%

Revenue Generated
Google: €5,468,506 ($7,840,167)
Yahoo/Bing: €458,009 ($656,607)

ROAS (Gain)
Google: 3,326%
Yahoo/Bing: 3,914%


While the Yahoo/Bing alliance has not yet taken place in the UK, the client should prepare themselves to take advantage of it when it does.  Even though Google refers a lot more traffic and generates more Revenue than both Yahoo and Bing combined (partly due to their 5X higher spend in Google), a combined Yahoo/Bing drives almost the same Average Order Value, drives a higher Conversion Rate, and provides a better Return On Ad Spend.  Those three metrics alone should alert the client that they should be spending more in AdCenter to drive higher revenue when the Yahoo/Bing alliance comes along.