With the wind chill factor at –2 degrees in New York on Tuesday, 3/6/07, I attended an awesome seminar at the New York Hilton, “The New Age of Web 2.0 Marketing,” presented by ClickZ and sponsored by Unica. It was free, and it was great!
I used to think that there were two main parts to a successful website: web design/development/usability and SEO/M.
Now I know that there is a third part: analytics. Unlike web design and SEO/M, which are creative and multi-faceted, analytics is about trends and numbers. Analytics is a dedicated function. Successful websites use analytics to drive their web design and SEO/M tactics.
Rebecca Lieb was the moderator and the speakers were David Schatsky, President of JupiterKagan, Steven O’Brien, Vice President of Unica Corporation, and Judah Phillips, Director of Web Analytics for Reed Business.
What is Web 2.0?
Judah Phillips defined Web 2.0 as: blogs, wikis, social networking, consumer generated content, podcasts, RSS, rich internet applications (RIAs), social tagging and bookmarking, publishing, social networks, product reviews, creating mash-up content.
Steve O’Brien defined it as:
- A marketing buzzword used by vendors trying to justify incremental investments in Internet software and services.
- A collection of technologies for creating interactive Web applications; e.g., AJAX, SOAP, RIAs.
- A term coined by O’Reilly Media in 2004 to promote a conference about the post-bubble Internet.
- A catch-all phrase for Internet services that encourage user-generated participation, like Flickr and MySpace.
Web 2.0 is About Engagement
The goal of a Web 2.0 website is engagement. Engagement can be measured by sessions/visits, repeat visits, session length, RIA usage (ex. rotate, zoom), downloads, uploads, reviews, comments, votes, subscriptions, leads. The return can be measured by recommendations, registrations, and purchases.
The Analytics Challenge of a Web 2.0 Website
Web 2.0 presents a new model to measure website statistics. Page views are no longer the best measurement of activity. The proliferation of rich internet applications (RIA’s), pose a measurement challenge and requires a new approach to measuring the effectiveness of Web 2.0 elements, because most actions are on-page.
The most commonly used RIA applications are Adobe Flash, Java applets/applications, Active X Controls, and AJAX.
Tagging relevant events with event tagging functionality is necessary to understand which features are driving which conversions. The right event tagging language needs to be used for the job:
- Flash/Flex Apps/Movies: ActionScript tag
- AJAX, DHTML, your blog: JavaScript tag
- Your blog postings on other blogs: Pixel tag
Maturity of Analytics Use
A majority of websites have deployed or are investing in web analytics, with 47% using web analytics; 12% planning to upgrade or replace in the next 12 months; 22% planning to deploy; and 19% with no plans to deploy.
The maturity of a company’s involvement in web analytics can be broken down into 5 phases:
Stage 0 – No analytics have been employed.
Stage 1 – Companies have made a minimum technical investment, < $10,000, and generate standard reports about web traffic. These are small companies with revenue <$50 million.
Stage 2 – The technical investment is $10K - $25K /year. A moderate amount is spent on reports, path analysis, commerce analysis, and a junior staff member is allocated to preparing the canned reports. Company revenue is between $50 and $500 million.
Stage 3 – There is a moderate to high technical investment of $25K - $125K/year. The analytics program enables custom data, integration with other systems, and there is one dedicated staffer for data analysis. Revenues are up to $3 billion.
Stage 4 – This is the stage of enlightenment. Tech investment spending is $150K +/year. The company is spending a lot of money on analytics, a lot on staff of 5+, and these people are vital to the business. The analytics are vital to decisions. Critically important decisions regarding the company are not made without the input of the data analyst.
What are the Responsibilities of the Analyst in Each of These Stages?
Stage 1 – The company makes the investment in the analytics program, they spend a few hours a week on the program, manage it, and generate reports. They figure out what activities visitors to the site perform and how it relates to business objectives. The analyst connects the dots between what users do and what it means. They focus on report generation and distribution. They try to educate other staff members about the data’s value.
Stage 2 – One full-time staff member is allocated to evangelize and manage the data.
Stage 3 – The mindset is adopted for continuous improvement based on the data, the data is used to drive actions, and the actions affect site design, email marketing, and search marketing.
Stage 4 – Lots of money is being spent on analytics and the company can show ROI for this investment.
Utilization of Analytics Tools
A problem with collecting the data and analyzing it, is that there is too much data, a lack of expertise, and you can measure an infinite number of things. A company may have the technology in place, but can’t interpret the data.
Once a company understands the importance of analytics to the bottom line, the challenge must be overcome on how to use the data. To avoid data overload, collect only the information that will be of immediate value to your organization and adopt an incremental approach to data collection and exploration. Even focusing on one aspect can help.
Most analytics tools are used only at their most basic level with most people just using general traffic reports.
One interesting stat to track is click-stream data. There is a huge ROI in making email campaigns relevant to users. The insight of click stream data gives you the efficiency to create messages that are targeted based on user behavior.
My Analytics Epiphany
Web analytics is an insight machine. Prior to this seminar, I didn't realize or fully understand the importance of analytics and how it should be used. Using analytics to continually test and improve a website will make the website a formidable force on the internet.
I use website statistics at the most basic level. I’m overwhelmed at all the things I need to be good at. Maybe I’ll just get started slowly and focus on click paths and landing pages and making those better.
Getting Psyched for SES NY!
Sitting in on a session that gives insight into website success is always so interesting. In the spirit of SES NY, it was great being in a room for 3 hours learning – no phones, no deadlines, no emails. There’s an excitement in the air, because the industry is so new, complex, and exciting.
See you next month!
Great recap and sounds like it would have been very intersting to sit in on.
Like many others, analytics is still an area that I've barely even scratched the surface on and need to make a greater priority.
Rand, I agree. This is such a huge shift on so many levels that the big guys will probably be very slow to move in this area. We'll no doubt see more of the mid-level players embrace this quicker, and certainly new startups.
I think the analytics element may become a key tool in connecting SEO and all this "fancy" web stuff with these "old school" players. These are often companies that base every move on financial justification. They probably see marketing as a necessary evil... it's all too touchy-feely, designy voodoo kind of stuff. Don't even try to talk SEO!
But analytics is numbers and is something that they can understand. X is bigger than Y, A increased by 30% and B dropped by 10%. This is a language that they can related to, understand, and have some idea what to do with.
Absolutely. If you can show the specific numbers and how they effect the bottom line, you will be speaking a universal business language.
nice post! Your enthusiasm is contagious!
"I use website statistics at the most basic level. I’m overwhelmed at all the things I need to be good at. Maybe I’ll just get started slowly and focus on click paths and landing pages and making those better."
I really identified with that statement. Just when I think I've got a handle on things, something else comes up and reminds me that I will always be learning and testing.
(sometimes conveying to management that it's good to be testing all the time is a bit of a challenge. ie. my experience with Adwords)
Hi Risa,
Amen, I know how Stage 1 feels like (still licking the wounds hehe).
It is good that you wrap your head around web analytics. Even today's online tracking methods and metrics beat anything that exists in the offline world by far. Companies often don't realize the potentials and lost opportunities because of lack of proper analysis of what happens on their website, how people got there and where they go afterwards.
I collected a number of resources to Web Analytics you might want to check out. It was praised by some as one of the best covered topics on my resources site so I think it isn't too bad. Also listen to Bills recommendations, he knows a thing or two about numbers, if you know what I mean.
Your post would be a good addition for my resources page, kind of as a 101, but I have one problem with it. It is actually two or 2 1/2 articles/posts.
1. to Web 2.0 measurement issues and challenges
2. about the different stages of adaptation of Web analytics by businesses
2 1/2. the benefits of analytics and why the big companies do it (and get even bigger because of that)
2 3/4 Your excitement about SES NY (I lied when I said 2 1/2 hehe)
I see two articles in the near future at the SEOMoz.org article area (the free one :) ). I might be psychic a little or simply have very active and trustworthy guts ;)
Cheers
Carsten
Cool article! As you mentioned, analytics completes the holy trinity for online succcess.
Contrary to popular belief SEO isn't solely about ranking highly in search results, as good SEO should drive traffic, improve conversion and increase revenue. That's why SEOs are in demand like never before, we not only have the skills to optimize for search engines but we are also usability and analytics proficient (or should be :) )
For anyone getting their analytical feet wet, here's a favourite quote of caution:
"He uses statistics as a drunken man uses lamp posts - for support rather than illumination." - Andrew Lang
You need someone that just focuses on web analytics in a SEM company. The SEO(s) are just too busy to track all the details of what's going on in a site. But they should occasionally take a look and not get too far away from the data.
Risa - excellent post. I am pysched for SES NY too, especially since I've never been to Gotham.
WRT the analytics portion of your post - I think the Jupiter slide is fundamentally flawed - it correlates the level of integration and involvement with the amount of dollars spent on or staff thrown at analytics. It's exhibit A for the size bias that Rand mentioned. It also bears very little resemblance to the SMB market.
Integrating your operation with analytics is more about a mindset than throwing money or staff at the "problem." It is recognizing the data that your visitors are giving you and putting in place a process by which that data is acted upon. Its also an ongoing process that should never stop (as opposed to various pieces of search campaigns). We've had Fortune 1000 clients demand fancy cross tabbed reports and do nothing with them and we currently have a client that runs his entire $10M/yr e-commerce operation off of Google Analytics data that he reviews himself.
Excellent post about web 2.0 marketing - very informative and 'original'.
Risa, great write up! I think 4 is a big selling point nowadays. I feel that you can better show, through analytics programs, true results. Regardless of the size of a company, the CEO/COO/CFO/CTO/CMO/OMG wants to see the return. Dropping the cash for a good analytics program is important to a compang because it shows trends that you may not have seen or missed out on. It really helps fill a gab, that's when my "analytics epiphany" really hit me. And that was months after using a good analytics program.
Risa - A great post; thanks for covering the event. I hadn't even heard about it.
Clearly, there are a lot of "old media" companies that are trying to "get" the more user-engaged world of web 2.0. I don't know that I've seen a lot of success from any of them so far (unless you count acquisitions). I think that many "old school" brands are simply too afraid of allowing users to have free reign over their message and content to truly embrace the movement. It's probably still a few years away.
Good to see that they are wrapping their heads around what to track. The only part that concerns me is the graphic showing metrics misses many of the most important parts of tracking "web 2.0" style sites:
Web 2.0 does mean less control for marketers. Steve O'Brien discussed this and gave the following reasons:
Web 2.0 gives less control to the IT department because:
I'm not sure that "old school" and Web 2.0 can't co-exist. There must be a way to allow user-generated and still control the basic message.
Regarding your concern that there are metrics misses for the most important parts of a web 2.0 site, I think the metrics are there.
In one slide that Steve showed, "Event Streams Help Improve RIA Effectiveness," he showed the visitor numbers for an "event stream leading to exit" for a camera which measured RIAs (rich internet applications) and gave metrics for the following:
These figures were broken down by paid search visits and organic search visits.
It seems like the optimal situation is to have a dedicated analytics person on staff to just tell me what I need to do so that I don't suffer from data overload.
I agree with you wholeheartedly on this, Rand. It will take a few years for the younger, web-savy marketers to be in the "upper ranks" to make these sorts of decisions. To me it seems as if the "older" generation is terrified of what their customer might say about their product. My answer to this is always, "why not use the negative comments/product reviews to improve your product??!!??"
Great post, Risa!
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And Rand, I think the login timeout is set too short...
I think I need to learn a lot about analytics - as I have never really considered anything more than awstats or google analytics... but then again - we are a small company and work primarily with other small companies.
Excellent write up Risa! Very readable and understandable. I look forward to seeing you again in NY. This time it will be warmer, I hope! Thanks for the pictures :)
Risa you have firmly made the move from the mostly quiet, but smart woman that lurked to a valuable contributor. Your information has forced me to rethink my priorities when it comes to analytics for which I am greatful. A smart and timely post (great coverage and pics too). Thanks!
Wonderful Post, Risa.
I hope that you get the chance to attend some of the Web site analytics and optimization sessions at the NY SES. I'd also recommend a couple of sites on the topic that you might see some speakers at the NY SES 2007 write at:
https://www.grokdotcom.com/
https://www.optimizeandprophesize.com/
(Jonathan, who writes the blog at that second site, is also a member here, and a New Yorker, too)
I think those sales/budget number reflect the Click Z "big guy" bias. If you're hungry and not afriad to boot strap you can get away with a lot, lot less.
I was surprised at how low the tech investment was compared to the amount of sales. They must be attacking a lot easier turf than me.
The tech investment of $150K+ does not include the salary for the 5+ staff, which could be $350K+. Still, the tech investment is low compared to the revenue. I would guess that there is a ceiling that is reached regarding the tech investment/staff required to do an effective job, and that at a certain point, the anaylytics investment required is not proportional to the revenue.
Also, the analytics discussed in this article is reflective of online activity, while the revenue is reflective of the entire marketing effort of the company, and with revenue in the billions, these companies are marketing all over the place, not just the web.
I disagree. Rebecca Lieb of ClickZ was the moderator and didn't make any presentations, rather they organized the event. The free event was sponsored by Unica (internet marketing and web analytics solutions). Steve O'Brien of Unica was very low-key about pushing Unica. It was JupiterKagan who prepared the research data, and as a research company, they shouldn't have any "big guy" bias at all.
I think the classifications of the revenues that define a small (<$50 million) and mid-size company ($50 - $500 million) is staggering. I think $50 million sounds super big to me, but I guess it's all relative to all the businesses in the economy.
I do agree that if "you're hungry and not afraid to boot strap you can get away with a lot, lot less." I think an insightful analytics person and a relatively inexpensive analytics program can have a tremendous effect on how a website performs, especially tracking click-paths, time spent on pages, entry/exit pages, and A/B testing.
Risa - My experience with Jupiter Research is that they definitely have a "big brand" bias. Small firms generally don't work with or participate in studies by Jupiter (unless they're specifically targeted to small business), and the sales & marketing for the company definitely suggests that the Fortune 1000 are their primary target.
I liked the article but disagree with the classification part of the 4 stages. Each stage is not a factor of annual company revenues, but a measure of how valuable analytics are to your organization. I know of a few companies at Stage 2 that are way under $50M.
I agree with you. I don't think each stage is necessarily a factor of revenue, but rather a stage of enlightenment - when a company realizes the importantance of analytics to the effectiveness of their website. Although this chart is an average of the maturity of analytics use, I don't believe that SEO's are average regarding their enlightenment and use of analytics. I will never become a "small" company with revenue <$50 million, but I still hope to attain a high level of analytics success.
Thumbs up... Nice Post, thanks. This subject resonates with me. For the past two months I have almost totally forgotten about SEO and have been buried in Clicktracks, Crazyegg (now gives you referrals for each clickpoint on your page - awesome!!) and Weblogexpert. Redesigning and regenerating pages going for yield. I've upped my yield per visitor nicely. I am glad to have a small number of sites that allows me to spend time on this.
re: "I’m overwhelmed at all the things I need to be good at."
Web analytics is fundamental to SEO success. But web analytics is a vertical industry by itself. The big G has over 64m results for a search on the subject.
SEOs cannot expect to make marked improvements for customers without analysing traffic and conversion data. But I don't think SEOs are the right people to implement and manage analytics unless they have a dedicated programmer to handle the challenge. The core skills required for SEO and web analytics are completely different.
SEOs would not generally be expected to be masters of analytics tools and web data mining but they should know how to put the output metrics to good use.
I recommend SEO companies build relationships with analytics service providers of their choice and implement a partnership or affiliate arrangement to service customers. I would choose an analytics tool (or suite of customisable tools) and leverage that company's expertise rather than spreading myself too thin.
Excellent article. Thanks for promoting it.
Excellent article thanks for outlining what goals i need to put in place for every project from now on out-