Analyzing Analytics:
Turning Data Into Action
When you build a website, the next step is to market that site and to do that, you need numbers – hard data that shows what’s working and what isn’t.
There are plenty of metrics software packs that provide piles of hard data – but what do all of those numbers mean in terms of site performance? If your pay-per-click rate is $1.86, is that good or bad and how do you know?
What’s the significance of the most common metrics and how can you better use these facts and figures to sell your site?
Metrics in General
First, a quick tour of what site metrics are in general and an explanation of why these numbers can do more harm than good.
First, site metrics tell you what has already happened – how many visitors you site saw yesterday, how many click-throughs you got last week, how long visitors stayed on site and other “yesterday’s news.” Keep this in mind when employing these numbers. On the world wide web your site may appear on page one of Google’s SERPs on Tuesday and page 23 on Thursday even though you didn’t change a thing on the site! Now you have to figure out why and fix the problem fast.
Second, site metrics are raw data, raw data that can be interpreted in any number of ways. In fact, interpretation is one of the biggest mis-uses of site metrics. Example: You conduct an A/B test using two AdWords. One pulls significantly more than the other. So you assume that the more productive blue block of text (60 characters total including the site URL) is the better choice.
That’s an assumption that may well be your undoing. There are any number of reasons one PPC ad pulls more than another including add placement on relevant site pages, cost per click (based on keywords), presentation parameters you set (I only want this AdWords to appear in Canada.) and so on. So, warning sign on the road ahead: remember that metrics are wide open to interpretation and your interpretation of this data could be 180 degrees off.
But, you can learn what metrics are commonly used and why. Take a look.
1. PPC – Simple. Pay per click. You only pay when someone clicks on your PPC ad. The more clicks, the more it costs you whether the visitor makes a purchase or not.
A good number of click-throughs is an excellent indicator that you’ve written a good PPC ad and that it’s being placed on good SERPs (based on your bid for laser keywords). PPC can also be compared to other raw data like CPM (see below) and conversion rate – the number of visitors who actually buy something or perform some other action like make a donation or opt-in for a monthly newsletter.
2. CPM – Stands for cost-per-thousand (M) of impressions. An impression is just that. The ad appeared on a web page or SERP but no action was taken on the part of the visitor. The PPC ad, potentially, was seen (made an impression) but you have no way of determining that from raw data alone.
So what good is CPM data? It provides a ratio of the number of impressions compared to the actual number of click throughs that were generated by the viewed ad. The more click-throughs per impressions the better. If only one visitor is clicking through even though 5,238 impressions were made overnight, you have a pretty sad click-through rate – an indication that the text of your PPC might not be pulling as much as you’d like.
3. Reach is a broad term the describes how well your marketing plan is working overall. If you’re getting lots of click-throughs and lots of sales from people all over the world (assuming that was your plan) your PPCs have a wide reach. Conversely, if you’re getting tons of impressions but no one is clicking, check and re-check your PPCs for the problem. It could be something as simple as a spelling error or something as complicated as the keyword headers you’ve selected.
4. Frequency is an indicator of how often visitors return to your site, and this depends on site stickiness. Is there a reason to return? The daily horoscope, the site blog or forum, the sale of the hour? All of these create site stickiness, important because the more times a visitor stops by your site, the more likely s/he is going to make a purchase, sign up for your newsletter or perform some other action you’d like to see.
5. Click depth is often used to determine a site’s bounce rate. A bounce is a visitor who lands on your site (homepage or interior page) and immediately bounces to another site. Click depth indicates (1) how deep the visitor went into your site and (2) did those interior pages lead to a sale, opt-in or some other desired action?
If you find that your click depth numbers are low, it indicates that visitors aren’t sticking around long enough to perform an action, like make a purchase. And this is where many new site owners start leaping to conclusions – the wrong conclusions: we chose the wrong domain name, the color scheme isn’t right, the typeface is all wrong and so on.
Click depth tells you whether your site is keeping the attention of the visitor. It doesn’t tell you why that interest is maintained. However, if click depth is low on your site, the bounce rate is high and that’s going to require some tweaking.
6. Calls-to action is a good metric to measure the quality of your site text from granite-solid hard sell to the soft sell required of certain products or services. (When was the last time you saw a funeral home announcing its ANNUAL FEBRUARY CASKET CLEARANCE SALE.)
The measurement of calls-to-action indicate the number of times visitors add something to their shopping carts, whether product, service, newsletter opt-in or some other desired action like a request for a price quote. It may not be a sale but it is a contact and an email opt-in that you can back sell, so it’s a good metric to track.
7. $$$ per Transaction indicates how much each paying customer spent on your site. Absolutely critical information when placed in the proper context. If you’re selling party favors online and your dollars per transaction are running $20 a piece, that’s pretty good for party hats and birthday napkins.
On the other hand, if you’re selling high-end wrist watches with a couple of cheapies thrown in to expand buyer appeal, and your dollars per transaction are still $20, umm, you might want to consider dropping the cheap watches – unless your margins are really sweet and you pick up another 5% on shipping and handling.
Again, dollars per transaction, all by itself, is a useless number. Placed in some larger context, it becomes a useful (and reliable) metric.
8. Cost Per Acquisition (CPA) is the actual dollar amount spent to generate a sale and, to develop a true CPA, you must calculate the costs of building your site plus the cost of the PPC, or other sponsored advert. Plus monthly hosting costs.
CPA does NOT include the cost of goods (which are fixed by your wholesaler), postage or your time to process and ship the order – even though your time does have a dollar value, it shouldn’t be figured into your monthly CPA figures.
9. Site referrals is a great way to measure the usefulness of your site. This form of viral marketing is 100% word of mouth. BTW, if your site doesn’t have a “Refer a Friend” feature, you’re missing out on a great opportunity.
10. Net is the amount your web site generated after all expenses have been paid except for your time which, as the site owner, isn’t necessarily calculated as part of the site’s net profit. Net profit is, in fact, your salary if you want to take it. Or, you can reinvest that net into more advertising outlets like hosted content, links buying and other traction-building promotional efforts.
Just a couple of reminders:
Metrics tell you what has happened, not what will happen if you do such and such.
Metrics are raw data open to interpretation. A professional SEO may view metrics data positively while the next SEO predicts doom and gloom for your site.
Metrics analysis almost always requires making assumptions. This raw data are open to interpretation and many times these interpretations are dead wrong.
Use analytical software that converts this raw data into visual representations such as heat maps (the red blotch shows where people clicked; blue blotches are invisible to visitors). These analysis software packs make interpreting data easier, thus making the data more valuable.
Finally, establish a baseline for all your metrics – CPA, PPC, depth and so on. You’ll use these baselines as measuring sticks as you tweak the look of your site and your marketing efforts.
No comments:
Post a Comment