Driving Bottom Line Impact with Engagement Analytics

Published: May 3, 2011

By Ron Person, Director of Analytics, Sitecore

For almost 20 years Internet marketers have used web analytics to measure the effectiveness of their marketing. But web analytics can be so misleading it can drive your marketing efforts in the wrong direction. Thankfully, the world of analytics is changing.

Web analytics is primarily based on the volume of visitor traffic and their time on page. With its focus on increasing traffic it puts little emphasis on measuring marketing effectiveness or customer engagement and its focus on traffic creates even greater silos between marketing channels. Currently there are more than 12 Internet marketing channels being measured by as many as 47 metrics. This tornado of metrics makes it almost impossible to identify where to spend your next marketing dollar.

As business and marketing managers we need a new and simpler analytics that measures our visitor engagement. We need to measure more than just the number of visitors. We need to know how relevant our marketing is, whether visitors are driven to action, and how to manage cross-channel marketing.

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We don’t need to measure visitors that just read or lurk. We need to measure whether our marketing engages visitors and drives them to action. To measure that we need to find action points in our websites that involve:

  • Communication
  • Trust
  • Commitment

Reading and lurking require none of these. They involve one-way information transfer, not two-way communication. No trust is involved. And there definitely isn’t any commitment.

There are points in every web site that involve different levels of these three requirements. For example, registering for a webinar requires a modest two-way exchange of information and a little trust that the email address used in registration won’t be spammed. More engagement is needed from someone requesting a price quote. The communication for a quote involves semi-confidential information and even more trust. And finally, asking for a live one-on-one demo involves longer communication, more trust, and an implied commitment.

These points are different than the usual conversion points. Each of these transaction points has an “Engagement Value” relative to its level of communication, trust and commitment. For example:

Registration for a webinar with email address       25 points

Request for a quotation                                          50 points

Request for a live demonstration                          100 points

The numeric value for each is not important. The ratios between them are. Initially you can guess at the ratios and later validate them by analyzing accumulated Engagement Values compared to completed sales.

Most commercially available web analytics system can, by embedding code in pages, assign Engagement Values like these to transaction points that meet the test of communication, trust, and commitment. Newer analytics systems designed around Engagement Analytics allow content editors to apply Engagement Values with a single click.

By comparing accumulated Engagement Value across different channels or campaigns you immediately see what makes the greatest impact on your bottom line. Because Engagement Value is a metric common to all channels it gives you the power to do cross-channel marketing analysis. For example, you can compare the value generated by email campaigns against social media against paid search and see which produces the greatest value. If your system can track individual visitors you can identify individual visitors that are rapidly increasing their Engagement Value and are therefore highly engaged and ready to be contacted.

One of the biggest dangers in using web analytics is that it pushes marketing teams to focus on driving high traffic volume. When you see your traffic charts going up and to the right you think that you’re marketing is working. In reality, your marketing may be attracting visitors that are not engaged. Your marketing effectiveness could be decreasing.

To measure that marketing effectiveness, well-thought out systems of Engagement Analytics involve other important metrics. One measure of marketing effectiveness we’ll call “Relevance.” Its formula is

            Relevance = Engagement Value / Visitors

For example, you may have a marketing campaign where visitor traffic is increasing rapidly, but a quick calculation show the Relevance (Engagement Value per Visitor) is low. That means your marketing effectiveness is poor, your marketing is not relevant, and your visitors are not engaged. Web analytics, with its focus on traffic would have led you to spend more money on this campaign.

Conversely, another marketing campaign might have a low number of visitors while delivering a high Relevance. In that case your marketing effectiveness is high and your visitors while fewer, are more engaged. You should focus your efforts and resources on learning more about this segment and increasing the traffic to this high Relevance campaign.

As marketing managers it is time for us to use tools that measure marketing effectiveness. As good marketing managers we need to build not high traffic web sites, but highly engaged high traffic web sites.

Ron Person is the Director of Analytics for Sitecore. Ron has 25 years of experience as an independent consultant in business and performance improvement. He has written 26 books including four international bestsellers on performance improvement and business computing. His latest book, “Balanced Scorecards and Operational Dashboards with Microsoft Excel” has a 5-star rating on Amazon.

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