A few weeks ago, I had the opportunity to attend Avinash Kaushik’s webinar. It dealt with using your analytics to gain insight into acquisition cost, revenue, net profit, micro-conversions, and economic value. The webinar is finally available to the general public. If you can spare the time, I strongly recommend you set aside an hour today to watch it, as you will learn how analytics can increase marketing accountability. However, just in case you can’t squeeze that kind of time out of your schedule, below you’ll find a brief summary of the main concepts from the webinar.
Before we dig into the details, I hasten to say that a big reason I am such an avid follower of Avinash is his focus on outcome driven marketing and analysis, which is the very foundation of our subscription services here at Futurenow. If you want to find out how to glean insight from your data, this webinar won’t disappoint. Using adwords marketing as an example, Avinash breaks down data analysis into three phases of development: toddler, teen, and adult with each level digging deeper into data that holds meaning for your business.
The most rudimentary level of data analysis for your ad campaigns, likened by Avinash to the toddler phase of adult development, involves measuring the cost and conversion rates for your campaigns. In the toddler phase you are looking at the data that is available to you as soon as you set up your adwords campaigns. This includes metrics such as clicks, impressions, click-through-rate and average cost-per-click. This information is essentially driving at having an understanding of how much you are spending on your adwords campaigns and is available to you without any effort on your part other than creating your campaigns. But the toddler phase doesn’t end there. There is one way to take it to a slightly deeper level: by tracking and analyzing the conversions for your campaigns.
You can integrate the conversion optimizer into your adwords campaigns by simply placing a bit of code on your conversion confirmation page. This code allows you to capture conversion tracking information. If you have Google Analytics set up for your site, you also can import any of your conversion funnels into your adwords account and get an understanding of how well each campaign is converting that way. If you think this kind of analysis sounds rather advanced, consider this: just one level beyond toddler phase, analysis involves not only understanding the cost and conversions for your campaigns, but analyzing the effect campaigns have on revenue.
The teen phase Avinash discusses in the webinar primarily focuses on how to get at revenue, and more importantly, net profit data. In order to move on to this level of analysis, you first must have an analytics tool implemented on your site. If you are using GA, you must tie your adwords account and GA account together. In so doing, you automatically have access to all of your adwords campaign data through your GA account, without having to do any additional tagging. If you’re not sure how to do this GA has excellent help articles to guide you.
Once GA begins to pull your adwords campaign data, one of the easiest ways to get at relevant information is to create a custom report. If you’re a director of optimization for a website, this report will most likely include information about your visitors and their behavior, such as the % of new visits and bounce rate… but why stop there? Now you also can access revenue in your reports. You can take this one step further by calculating the net profit for your business. Think about what the cost of production is for your goods sold during a certain time period, and subtract that from your total revenue for the same time period to calculate your net profit for the period. Now, not only do you know the cost of your campaigns, but you know how well they are contributing to your bottom line.
The bulk of what Avinash covers in the adult phase of analysis (he also refers to this as the ninja phase) are topics we have written about here on the Grok. The adult phase takes you to a level of analysis where you finally quantify the economic value of your marketing. Shifting focus to the economic value of marketing efforts provides a bigger picture about the effectiveness of your marketing campaigns beyond the success marker of a macro-conversion (i.e. online order, lead form, etc.).
Avinash asks us to think about the estimated 90% of prospects who find your site but do not complete the macro-conversion on your site – these people still interacted with your marketing efforts and your site, and some may have done so in a way that adds value to your business. Consider the various micro-conversions out there for a b2c retailer: newsletter sign-up, wish lists, videos, etc. Each of those micro-conversions contributes to the success of your business in some way, and can and should be tied back to dollars. Not too long ago, I wrote a post here on Grok detailing how to tie your micro-conversions to revenue dollars. You can also read Avinash’s similar post to see another example and get some additional tips.
Analyzing your marketing efforts’ data can seem like a daunting task, however, if you want to understand what is valuable for your business, it is not only doable, it’s a must. You are investing money (your time comes at a cost to your company too) into various marketing efforts. Don’t you think it’s about time you know how well your campaigns are performing – not only in driving prospects to your site, but with regards to contributing to your bottom line? Avinash’s webinar is an excellent guide, walking you through how to dig deeper and deeper into your data.
If you’re still struggling to do this, and to figure out to improve your marketing results, contact us to learn how we can help.