Analytics-blog

I’ve been walking the halls at AOD speaking with folks about “what it is we do.” At the end of the day, what we do is give folks tools to optimize their business decisions.  But that phrase “optimize business decisions” is still meaningless to the average bear (or CEO).

What I’m hoping to do is get into some details, and expose folks to some of the metrics we present to help organizations optimize their business.  Please let me know if this is helpful or not.

So here goes our first metric, Cost Per Lead (CPL) by Media Channel:

The metric is calculated by dividing the Total Advertising Cost (TAC)  for a Media Channel by the Total Leads Generated (TLG).

So CPL = TAC / TLG

This chart helps you understand the spend required to acquire a somewhat qualified potential customer.  For those of you with a CRM or sales background, you know that a lead is nothing more than someone who has responded to your messaging, or someone that you SUSPECT might be interested in your services.

Here are the decisions you could potentially make using this report:

• Decide to further research your efficiency by looking at a Cost of Conversion by Media Channel report.
• Decide to allocate additional funds toward lower cost lead sources with the goal of understanding your spend limit before diminishing returns occur.
• Decide to further drill down into each Media Channel to understand why some costs are higher than others.  You might find that a few specific media vehicles are costing more than they should to generate leads.
• Decide to further drill down and research the differences in the creative across those Media Channels.  You might find that that the creative is driving your efficiency more than your media channel.

Obviously, what you don’t want to do is make a knee-jerk decision based on this one marketing metric alone.

Given that fact, just like virtually any other measurement criteria on the planet, it is only useful if compared against other metrics.  In this case your would want to understand the conversion rate by Media Channel as well.  It might turn out that while you are paying more for leads in certain channels, those leads are better qualified and thus convert at a higher rate.

Hope this made sense.  I look forward to any and all comments.

So it’s not quite like Spy vs. Spy.  In fact, to some extent it’s a complimentary relationship.

For example, I’m a big fan of Omniture and their SaaS online marketing analytics system.  While at Sony I did my best to push adoption across multiple marketing and website groups…and in the end they were adopted across most (if not all) Sony divisions.  They have a great user interface and their support system was excellent.  They are the best in online marketing & analytics tools in my opinion.

At AnalytixOnDemand we also talk about marketing analytics.  However, when we talk about it, online marketing analytics are just a subset of a much larger picture.  We also support statistics such as sales per square foot and return on equity that have very little to do with online marketing.

So the real difference between an Omniture and an AnalytixOnDemand is pedigree.

Omniture has a pedigree in online marketing analytics.

AnalytixOnDemand has a pedigree in business intelligence.

Business Intelligence encompasses online marketing analytics + call center + finance + logistics etc.

This means AOD must be conversant in hundreds of reports and KPI’s across industries.  This is not easily attained.  It requires years of experience.

In addition, companies with a business intelligence pedigree like AnalytixOnDemand expect data to appear from MANY sources.  Not just a browser.  As such, our systems and processes are built around the concept that we will be dealing with messy data.  We’ve built tools and processes specifically to identify and report these issues.  And it’s just not for online data…it’s ANY data.

If you read this blog you probably are thinking…well why in the heck would I even consider Omniture?  Well…they have a great system as pertains to anything you are doing online.  And also, Omniture combines those analytics with various optimization tools that help folks real-time organize and organize their website, campaigns etc.

Our application helps you look at performance across all channels or even across your entire enterprise….and also drill down to figure out why a given trend or pattern exists.

There is certainly some overlap between the two systems.

If you are a Director of Online Marketing, I would not advise you to drop Omniture in favor of AOD.  However, if you are VP of Marketing with a multi-channel marketing effort and managing the call center, I would advise you to hire AOD in addition to retaining Omniture.

Hope that makes sense.

As I was disembarking from my G4 this morning (G5 is in the shop again…sigh…)….I was thinking how advertisers are taking blogs and social media seriously these days.  If you don’t believe me, look no further than the IAB issuing “definitions” of metrics that can be used for media planning purposes.

God forbid we don’t extend advertising to every single surface of the planet, here’s some insights on what the IAB is thinking about blog analytics in particular.

They divide the measurements into four major categories.  Below are the measurement categories and a high-level overview of what they measure.

1. Conversation Size – How many sites/blogs and how many links exist regarding the particular topic. In other words, how important is this topic overall?
2. Site Relevance – This is based on how consistently a given blog or site is discussing a particular topic.  Meaning, was it just discussed once or is it a daily, weekly, monthly occurrence?
3. Author Credibility – How many links into the blog for the given topic and the duration for which the topic has been discussed on the site/blog.  Is the blog popular with the right audience and for how long have they been discussing the topic?
4. Content Freshness and Relevance – Primarily the frequency of posting on the topic.

If you are really interested in these guidelines, you should definitely check out the IAB guidelines in detail.

In a lot of ways, the IAB Guidelines are very similar to how Google indexes various pages and assigns them rank for a particular keyword or phrase.  Obviously if an SEO wizard like Randfish read that last sentence; he would be inclined to slap me upside the head.  But there are certainly some similarities to what the IAB proposes and the Google secret sauce.

Anyways, the good news is that advertisers are finally figuring how to spend money on blogs.  I’m not saying the methodology above is perfect, but it’s a good start.

Oh my goodness…can you just smell all those advertising pennies adding up?  Pretty soon my blogging profits will exceed those generated by my three-legged mule farming operation.

So pass around the offering plate because I’m getting rich one post at a time.

You know the type.  He’s “creative”.  He’s a “genius”.   He interrupts you and everyone else with an incessant flow of ideas.  And he’s never measured the success or failure of anything.  He just moves on to the next “big idea”

If you’ve been in business for very long, the name of this certain someone is on the tip of your tongue.  They believe that marketing is a series of creative thoughts via trial and errors; no measurement needed.

This approach is very exciting, but incapable in terms of generating consistent results.

The truth is that you can be BOTH creative and quantitative.  You CAN measure the results of your brainstorming sessions.  And you can iterate on a theme to drive incremental sales and drive down costs.

But you need to start with the facts.  You need a analytics or business intelligence system that can provide you and your co-workers the stats you need to judge a campaign as a victory, defeat or worth further trials.

Many organizations have not even made it that far.

Once you are armed with your reports; carefully approach your local genius.  Help him/her understand that the goal is to increase the winning percentage; not to broadcast the failures.

I’ve been down this path before…more than once.  Believe me, it might take a while, but in the end the creative will be happy you exist.  The first time you are able to show that something they did was a measurable success…they will want to tell the world.