Tuesday, June 2, 2009

Recap of Web Analytics Wednesday in Helsinki

A week ago we had Web Analytics Wednesday in Helsinki with 86 registered participants. The event covered search marketing and measuring from different point of views. In my opening I told my insights based on activity and publicity in Finland:
”Web Analytics is becoming more and more business critical and early adapters can achieve real competitive edge.”

Erkko Simsiö, Nordic Business Development Manager from Eniro had a presentation "SEM 360 degrees" and he stated the same:
"Search engine marketing is vital for any company nowadays."
IAB Finland's research confirms this pretty much: Paid search and directory listings has grown over 32 % in a year (Q1/2009 compared to Q1/2008). What we defenitely need in Finland is more accurate statistics for search marketing. "Ekku" followed my views that search engine marketing as a whole include directories / local search, maps and social media.
"Because of versatility of search engine marketing it's very important to have a clear search engine strategy." Petri Mertanen
This versatility gives a lot of challenge on web analytics and makes measuring more complex. Strategy doesn't have to be a big, hairy, scary thing. It can be one page long including:
  1. Goals (vision) - answering question why we are doing this?
  2. Means - answering question what areas of SEM we should handle and do in order to achieve previous goals?
  3. KPIs (key performance indicators) and other metrics - answering question how are we going to measure all this?
”Companies which combine paid search, directory listings and search engine optimization at the same time seem to get best overall results." Erkko Simsiö
Our second speaker Arttu Raittila from Tulos confirmed this, but claimed that:
"Often money invested in search engine optimization is just a fragment compared to paid search although lots of searchers ignore advertising completely.
I totally agree with Arttu about paid search being a very good playground for picking up the right keywords for SEO. Many customers have been asking whether to do just paid search or search engine optimization? A recommended tactic has been to do both.

Too many companies measure search marketing concentrating just on clicks (visitors) and price. Ekku said that very seldom heavy traffic and low cost per click (CPC) are good signs for efficient search engine marketing. Arttu who represented how search engine marketing should be measured, had similar message:
"Clicks, visit and visitor metrics are not enough, even measured by a keyword level."
Arttu also stated that landing page bounce rate is the best basic metric for search marketing. In my mind, as it is with other metrics too, you have to combine bounce rate for other metrics, e.g. time per visit, page views per visit and conversion rate of course to get more holistic view on visitor behavioral.
"It is absolutely crucial to define and tag website goals to your web analytics system. In addition to conversion rate, you can and you should measure sales." Arttu Raittila
It is quite easy to track sales online store, possible to measure personal business-to-business sales through lead generation and even off-line sales in stores. Still, according to TNS Gallup's research (pdf in Finnish) only 12 % of companies get information how their paid search generated sales?! Erkko Simsiö told that directories convert people to off-line so company websites don't get hits at all.

According to Eniro's research 60 % of the people who find what they have searched take contact directly or visit off-line store. And 70 % of these visitors convert to buyers! This is very interesting and maybe in the next Web Analytics Wednesday (in September?) we will cover more multi-/cross-channel measurement and off-line conversions.

Arttu also guided that if you measure sales by keywords, you know what keywords work and you can for example raise your maximum cost per click in your paid search campaign. But how up you can go? Let's say you have generated sales of 5.000 euros with 500 visitors - conversion rate 5 % and average order value 200 euros. So every visit is bringing you 10 euros = value of visit. Your profit margin is 10 % when you get all costs off so your maximum CPC, your pain point is 1,00 euro - note: unless you are raising your conversion rate or AOV by better position!

There was little discussion about last click credit. Very good topic and should have more attention in my mind. Ismo Tenkanen from Media Contacts has posted about this (in Finnish). With Google Analytics you can define whether the last click (e.g. natural search) is getting the credit of conversion or the original one (e.g. paid search). Arttu said that Finnish Web Analytics application Snoobi has good feature to give points for passive business-to-business leads. Actually this is very easy to do with any (free?) web analytics application with advanced segmenting features.

During the third presentation Kristo Aaltonen from Get It Right and Tarmo Herlevi from Deferon represented a real customer case. Kristo gave a very good tip for every company:
"You should analyze company's current status, learn and plan a lot before actual doing and trying to have quick wins in search engine marketing."
Kristo also showed a web analytics process model:

1. Defining goals and metrics
2. Data collection
3. Analysis and evaluation
4. Developing marketing activities and content

In my mind and what I wrote about strategy of search engine marketing, defining business goals is very very important. Collecting data is quite easy and anyone can deliver conversion rate reports. But can you measure customer life time value, that is one tricky question...

Analyzing the data is hard and getting good usable insights is even harder. Like Ekku said: "It's more important to analyze data and optimize your campaigns rather than just deliver reports. The most important thing is to find the most valuable keywords.”

I think that the true analyst is measured from the bottom line: how much money you make for the customer? In Deferon's case the turnover increased by 40 % and nowadays almost half of their customers come from Internet channel. Consultants should defenitely measure return on investment:
ROI = results (e.g. improved sales) minus total costs of activities divided by total costs of activities (including media, consultant fee, even customer's working hours etc.)
Last time when I checked ROI with a customer we were down around -40 %. But I'm also sure that this will turn positive in a month or two. : ) Some may say that the last Web Analytics Wednesday was pretty basic stuff, but in my mind there was lots of usefull things to remember. Please feel free and comment or ask a question.