What Should Marketers Be Measuring?

Last week I missed a webinar conducted for Awareness Networks by Jerimiah Owyang of Forrester. He’s one of the most thoughtful observers of the social media scene, so I took some time over the weekend to catch up. (You can download both the webinar and slides from this page.) That also reminded me of a white paper from Coremetrics on measuring social media (download "Winning in a Web 2.0 World" from this page; they have a webinar by that title coming up soon) that’s been languishing in my files for too long. I thought I’d try to pull together some metrics issues from the two. They take quite different approaches.

Coremetrics focuses on Web 2.0 technologies, roughly divided into User-Generated Content and Rich Media. I’ve selected a few Coremetrics that are most relevant to the content of this blog. You can see the full list on pages 11 and 12 of their report.
Blogs are now considered “mainstream.” How do we know whether they are contributing to our program? First, traditional traffic measures, which are easy to obtain from the blog platforms or metrics programs. Who is adding content could help identify influentials. Since Coremetrics offers an integrated measurement platform, the paper discusses in some detail the issues of following visitors through multiple sessions in multiple media to achieve a conversion. That’s important, but more difficult than simple traffic measures. User reviews need similar measures of traffic and conversion paths. If you look carefully at the Social Networks entry, there are two issues here. One is traffic generated by social network sites/brand-related activity. That’s an entry metric that needs to be carefully filtered to understand traffic sources. The other is results of ads on social network sites which are generally best monitored by ad-specific landing pages.

This is helpful, but how does the marketer know where to start, which of the many techniques and channels to choose? Jerimiah Owyang gives a strategic overview.

His strategic objectives, which are pretty much in order based on a marketer learning curve are:
• Listening comes first. Spend some time hanging out where your customers hang and listen to what’s going on. Techniques of reputation management provide a formal programmatic approach. Tools include Google Alerts, blogs, discussion boards, Twitter and FriendFeed.
• Speaking comes next. We marketers are good at that. Just be sure you’re using traffic, audience and content measurement techniques to know what’s working.
• Energizing may be essentially the same as engaging your audience. Get them to use apps that deliver content and attract them to your site. Try spinning the wheel on Axiom’s PersoniX program site to see a B2B marketer engage potential customers. The easiest metrics are participation/interaction/click-through measures. Following what they do after the initial interaction is the subject of the Coremetrics whitepaper.
• Once you identify the activities your audience is interested in (not necessarily the same as the ones the marketer thinks they should be interested in), Support them. The recent post on the new Harley-Davidson social networking pages is a good example of support. Support also lends itself to traffic measures. Following those through to conversion requires more complex metrics.
• Then encourage them to contribute content, ideas, suggestions. Owyang calls this Embracing—draw your users into the community fold. Make them a part of the community. Give them a feeling of ownership by making them active participants. Traffic/participation measures are important here. Can you follow ideas/suggestions through to successful activities or products and measure the ROI from the activities or products?

On the surface these two approaches to metrics—technologies vs. objectives—look rather different. When you scratch below that surface, you see the same basic sets of metrics, which are essentially based on the techniques you use to achieve the objectives.

The take-away for marketers is not to be swayed by the siren song of technology. Good objectives always come first. Then choose technologies that:
1. Design marketing programs, using appropriate technologies, to achieve the chosen objectives
2. Provide measures of the degree to which objectives are being achieved.

Interesting that good marketing is the same, whichever channels are being used. Without good objectives, nothing else matters much.

Conversion--How the Internet Has Changed It

Read Part 1 here.
Read Part 2 here.

There’s a simple answer to the question. Pre Internet, only B2B marketers and B2C marketers who sold multi-step products (think automobiles and life insurance, for example) had to engage in conversion marketing. Mass marketers acquired customers and perhaps they had retention programs, but most, especially consumer packaged goods marketers, didn’t have to do conversion marketing. How could they? They didn’t know who potential customers were, what they were interested in, and how to reach them. The web has changed that, dramatically and forever.

The direct marketing conversion process is still the basis. It is stated as Acquire > Qualify > Distribute > Follow Up. In direct marketing, especially B2B, distribution is especially important. Leads could be distributed to the field sales force (high cost), to an internal sales force (moderate cost), or to non-personal, usually mail, follow up (low cost). Then there were two remaining challenges. One was to nurture leads until they were at a high readiness state and then forward them to the field sales force for closure. The other was to motivate the field sales force to follow up leads. Those issues still exist, but the larger challenge for all marketers is using the Internet, especially the website, effectively in the conversion process.

The conversion process (and the retention process also) will be more effective if acquisition has been well done. That means acquiring high-potential customers, not necessarily acquiring the most customers. Successful acquisition requires targeting, as discussed in the previous post. Unless people stumble onto your website by accident, they are coming in from advertising or some other online (or offline) content. Don’t just dump them onto a home page and hope they’ll find what they need. If you can simply drive them to a product page with no chance of confusion in what they are looking for, that’s great. Often that’s not the case, and even if it is, it risks visitors taking a look and leaving without giving you a chance to capture an email address. That is an important function of a landing page. A good landing page is also promotional and moves visitors a step further in the direction of purchase.

Once the visitor moves off the landing page onto the site, the question becomes how to move the person through the site, resulting in an eventual purchase—whether that takes one visit or many. It is very useful to study the paths visitors take through your site and to try to understand what pages are moving them closer to purchase, which pages are not, and where they are leaving only to return later, and where they are abandoning for good. Commercial metrics services provide path data. They can also help you segment both identified and anonymous visitors. Different segments are likely to follow different paths and are almost certain to convert at different rates.

To help understand segments, it is helpful to create personas. Personas can be thought of as a way to put some human flesh on your segments. They help everyone from web designers to marketers develop approaches that work for each segment. Staples redesigned its site around personas. Best Buy (item 1, item 2) has used them both in site development and in developing concept retail stores.

Whatever else you do, keep in mind that most visitors don’t purchase in a single session. Metrics guru Avinash Kaushik recommends measuring “days to purchase” and “trips to purchase.” With that data in hand you can develop a meaningful contact program. That may include offering a carefully-timed incentive to close the final sale. At that point the visitor officially becomes a customer, part of your retention program.

Think carefully about what “conversion” is in your particular situation. It is always desirable to be able to track a visitor from the first contact through to a final sale. If all the activity occurs online, that’s possible. If conversion occurs offline, it can be difficult, and you may want to establish a number of metrics mileposts on the way to final conversion.

Acquisition costs a lot of money. A well thought out conversion strategy is the first step to ensuring that money has been well spent.
Sphere: Related Content

Marketing and the New Media - The Analytics Challenge

One of the main attractions of the Internet for marketers is the ability to track and evaluate the effectiveness of our marketing efforts. There’s a lot of help available, but complete tracking and evaluation is still more difficult than it sounds.

In June 2005 WebTrends published the results of a study that found only 5% of marketers “very confident” in their abilities to measure web marketing efforts while 43% said they were “fairly confident.” A scary 26% admitted to “flying blind.” Has the situation improved since then? Probably; there are a lot of good web analytics programs out there and marketers of all types are increasingly cognizant of their importance.

But that begs the real question because web analytics are the easy part. Measuring the offline activities that are still an important part of the marketing mix is still harder. A recent chart caught my eye, because it highlights important issues.

Click here to view article.

Marketers still see data quality as a problem, but by far their largest problem is marketing and tracking the results in multiple (sales) channels. That is closely followed by what marketers express as “closing the loop on campaigns by merging response and transactional data.” In other words, we also have multiple communications channels. So we have multiple communications channels inciting action in multiple transactional channels. The marketer is faced with a spaghetti-like network of activity and action, and it’s hard to follow the strands from beginning to end.

The web analytics providers are doing a heroic job of integrating non-website channels like email and search into their solutions. However, it’s easy to surmise that the new media channels like blogs and social networks are going to grow (and sometimes shrink) faster than the integrated analytics solutions can incorporate their metrics.

For now, we’ll be working with individual solutions in various channels. For example:
•Blog platforms provide basic metrics for each user blog
•Analytics widgets for social networks like MySpace and Facebook have become a booming industry. Some of them are purely for the gratification of the page owner but some are useful for a commercial page
•Social networks have been a focus of research for many years and the research has produced appropriate metrics
•Analytics packages like Google Analytics can be included in various social media applications.

More generally, the Web Metrics Association is encouraging the development of metrics for social media with a combination of virtual and real-world collaborative activities. The metrics are evolving but putting them together into a complete picture is a moving target.
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Blogs Are a Mature Medium

Blogs and their predecessors have been around for awhile (Wikipedia has an interesting history), but many of us only became aware of them in the early years of this decade. We watched with interest as several blogging services gained traction, specialized search engines and advertising networks were introduced, and, recently, blog audience metrics were developed. These are all signs of a mature medium, and one might expect businesses to take advantage of this low-cost way to reach their customers directly.

The sheer size of the blogosphere has clearly exploded. According to Technorati, in April 2007 they were monitoring over 70 million blogs. 120,000 new blogs were being created every day—1.4 per second! True, most of those are personal, political or news blogs. eMarketer’s newsletter (May 1, 2007) quoted a study that found that only 8% of the Fortune 500 firms, and 4% of their Global 1000, have public blogs. Reason given: they did not have policies governing the use of social media and were concerned that employee comments would damage their brand.

Policies can be established, and it doesn’t take much technical savvy to establish a blog—I’m living proof of that! Is it that most marketing managers--who aren’t part of the social-networking demographic--are not aware of the potential benefits of direct interaction with customers? Or is it a reasonable fear that the brand could be harmed? Or is it purely the fear of making a mistake, of looking foolish in the eyes of one’s colleagues and peers? What have your experiences been?

Tomorrow we’ll see one example of learning to use social media effectively and another that represents just the opposite.