e.day 2007: Eric T. Peterson "All That Can Be Measured, All That Can Be Known"

Web Analytics Demystified Web Analytics Demystified

All That Can Be Measured, All That Can Be Known All That Can Be Measured, All That Can Be Known

“ Hello, My Name Is Eric Peterson”

Founder and CEO, Web Analytics Demystified, Inc.

Author of three books

Web Analytics Demystified

Web Site Measurement Hacks

The Big Book of Key Performance Indicators

Founder of “Web Analytics Wednesday”, “The Web Analytics Forum at Yahoo! Groups” and the “Web 2.0 Measurement Working Group”

Writer and researcher at www.webanalyticsdemystified.com

About Web Analytics Demystified, Inc.

Web Analytics Demystified, Inc. provides strategic guidance to companies working to make the most of their existing investment in web analytics

We focus on:

Staffing issues

Integration and reporting strategies

The process of actually “doing” web analytics

We provide workshops, seminars, and in-house strategic consulting

Please call me directly at (503) 282-2601 for more information

Web Analytics is Easy … Right? Web Analytics is Easy … Right?

Authors, Bloggers, and Pundits Say It Is …

Web Analytics Vendors Say It Is …

Even the Great Google Says It Is …

So It Must Be True! Web Analytics is Easy! So It Must Be True! Web Analytics is Easy!

Or Is It?

If web analytics is so easy , why do so many of us struggle?

To gather accurate data?

To hire experienced people?

To generate relevant reports?

To produce truly actionable analysis?

To recommend meaningful experiments?

To explain the data to our peers and managers?

To use data to impact the overall visitor experience?

Why indeed?

Web Analytics by the Numbers

The Good

68% of organizations have employee-managed web analytics strategies

47% of web analytics practitioners report making recommendations and taking action

The Bad

22% of organizations still only do web analytics on an ad hoc basis

57% of web analytics practitioners said that “web analytics was difficult ”

The Ugly

31% of web analytics practitioners say web analytics answers less than 50% of their questions

50% of web analytics practitioners report having considered switching jobs recently

54% of organizations aren’t even measuring their ROI from web analytics

F

Web Analytics is HARD! Web Analytics is HARD!

It’s True, Web Analytics is Hard!

There, I said it. Now you can relax and focus on learning web analytics!

You don’t have to pretend to know what the heck you’re doing all the time …

… or that you’ll suddenly figure web analytics out overnight

… or that there are even enough resources to help you learn!

You don’t have to pretend you have all the tools you need …

… or that the tools you do have will answer all your questions

… or that you know all the questions to ask in the first place!

It’s okay to admit that web analytics is damn difficult sometimes!

This is Coni Fadigan

Coni has been using web analytics for 2 years

She’s used WebTrends and Google Analytics extensively at www.docseducation.com

Web analytics is hard for Coni because:

There is inconsistency in the literature and few good resources telling her where to start

It is difficult to know “the truth” about visitor behavior, especially given cookie blocking

At small companies, web analytics is hard because there is simply too much data

This is Paul Smith

Paul has been working online since 1995

He uses Omniture to measure the U.S. Army recruiting web site (www.goarmy.com)

Web analytics is hard for Paul because:

Visitor engagement is a critical measure for Paul, but “engagement” is still very poorly defined

U.S. government web sites don’t allow the use of persistent cookies without high-level approval

In non-commercial sites, web analytics is hard because “conversions” happen offline

This is Terry Chadwick

Terry has worked in web analytics for 5 years

Currently a web analyst using Coremetrics at a very large and very well-known bank

Web analytics is hard for Terry because:

Implementation issues cause data inconsistency

Staff turnover necessitates constant re-training

Disparate systems give different answers

Web analytics is poorly understood by management

At large companies, web analytics is hard because of politics and ever-changing resources

Hard, But Not Impossible

I interviewed a dozen people when I talked to Coni, Paul and Terry

Universally they struggled with web analytics, but nobody said it was impossible, and nobody was giving up on web analytics (yet)

Everyone understood the tactical and strategic value of getting web analytics right

Everyone expressed a great passion for the data we have at our disposal

Everyone sounded motivated to resolve the problems they have today

Fortunately, I have a practical solution to help you sell the idea of web analytics “done right” when you get back to the office tomorrow

Better yet, my practical solution has a catchy and appropriate acronym!

RAMP Up Your Web Analytics Strategy! RAMP Up Your Web Analytics Strategy!

RAMP Up Your Web Analytics Strategy

To become successful with web analytics, you need a RAMP!

R ESOURCES

A NALYSIS

M ULTIVARIATE TESTING

P ROCESS

RESOURCES are Technology and People

Web analytics is not just about technology

The technology is simply a means to an end

Anyone who tells you their technology is “easy to use” is wrong!

There is a Web Site Optimization Ecosystem you need to consider

People are absolutely critical to web analytics

People manage technology

People manage expectations

People provide analysis

People make recommendations

The Web Site Optimization Ecosystem Quantitative Qualitative Measures Actions

ANALYSIS is the Desired Output

Waaaaaay too much emphasis is put on generating reports in web analytics

Reports are a necessary evil

But they are still evil

Analysis is what you need to drive your business up the RAMP

Recommendations, not data

Insights, not metrics

Often times companies struggle to deploy a web analytics model capable of producing analysis on an ongoing basis …

The “Hub and Spoke” Model for Web Analytics

The HUB supports the SPOKES on an ongoing basis inside the organization

The HUB helps conduct ANALYSIS , does MULTIVARIATE TESTING , and supports PROCESS

The HUB is usually the primary interface to technology

Some companies outsource the HUB

The SPOKES are individual departments with their own reporting resources

The SPOKES bring RESOURCES and some PROCESS to web analytics

Analytics “Hub”

MULTIVARIATE TESTING is Mandatory

If you’re not doing some type of testing, you’re not doing web analytics!

ANALYSIS is the desired output, but you have to do something with that output

Test landing pages, test creative, test placements, test images, test everything!

Testing is not as hard as you think , and it’s not as expensive as it used to be

It doesn’t matter if you’re doing multivariate testing or simple A/B testing, as long as you’re testing!

Offermatica, Optimost, SiteSpect

MeMetrics, Amadesa, GWO

Touchclarity, Kefta

Testing Lets You Cross the Action Chasm Relative Number of Companies Maturity of Analytics Use Source: JupiterResearch (8/05) Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Investment Chasm Staffing Chasm Action Chasm

PROCESS Keeps Your RAMP Together

It turns out that the rest of your RAMP goes to heck if you’re not paying attention to the actual process of “doing” web analytics

There are dozens of processes that describe how companies should use web analytics

Most companies do well in some areas and (very) poorly in others

A process-oriented approach towards web analytics:

Saves time and money

Reduces dependence on individuals

Reduces mistakes, errors and omissions

Improves internal understanding of web analytics

Example Web Analytics Processes

Each process should be clearly defined, having assigned owners and planned outcomes

Business process diagrams and checklists are recommended to keep everyone focused

Management Processes Operational Processes

Assign Ownership

Define Business Objectives

Translate Objectives into Activities

Establish Goals

Select Technology Partners

Hire and Allocate Resources

Establish a Web Analytics Deployment Model

Track Web Analytics Return on Investment

Plan the Implementation

Collect and Integrate Data

Validate Data Collection

Provide Internal Training

Define and Design Reports

Conduct Analysis

Run Controlled Experiments

Augment Data Collection

Process Drives High-Value Use of Analytics Please indicate to what extent web analytics data is integrated into your organizationís decision-making process? In total how many full-time employees or full-time equivalents (FTE) in your organization are dedicated to web analytics related projects? (n=395, U.S. only) 50% of companies using defined processes are using web analytics to support both tactical and strategic decisions

Process Drives Positive Web Analytics ROI “ Please indicate your organization's overall return on investment (ROI) in web analytics tools and processes in regards to your total investment.” “Which of the following statements best describes the way your organization manages web analytics processes? “ (n=391, U.S. only) 50% of companies using defined processes report a positive return from their investment in web analytics

Even the Industry Analysts Love Process!

Megan Burns, Forrester Research

“ Many analysts say they still spend the bulk of their time responding to fire drills that keep them from high-value activities like user education, advanced analysis, and experimentation. To get out of crisis mode, firms need to plan and implement systems that handle everyday data needs with minimal effort, and allow them to manage new requirements and one-off data requests with consistent processes.”

“ With a process-driven approach, your Web analytics analysts have the time to do higher level activities, advanced analysis, support multivariate testing, and other activities that deliver additional incremental value to an organization.”

John Lovett, The Aberdeen Group

The next level [in web analytics] is establishing business processes so you can use analytics to measure results. [Process] is the best way for companies to leverage the analytics platform.”

RAMP Up to Web Analytics Success!

Web analytics is hard, but having a solid RAMP will make you successful!

R ESOURCES

A NALYSIS

P ROCESS

RAMPs Have Built in KPIs

When you get RAMP in place, you can calculate the slope

Add up the number of successes you’ve had using web analytics in the last six months

Divide by the number of times you’ve screwed something up

The result is the slope of your RAMP which describes your web analytics velocity

Steeper slopes are better, and you increase the slope by minimizing mistakes

Did you find you have a shallow slope? Don’t despair

Trust me here, you are not alone

Remember that I told you that WEB ANALYTICS IS HARD!

Why Do You Need a RAMP?

Web analytics is hard because most companies don’t treat site measurement as a strategic business initiative

Web analytics should not be a series of fire-drills and one-off reports … consistency is critical to success

Competing on web analytics requires big picture thinking … big thinking leads to big ROI

A solid RAMP supports consistency of approach and big picture thinking!

If you’re not fully committed to optimizing your online business, don’t invest in a RAMP

You may have a “RA” or a “RAP” or an “AMP”

To be truly successful, you need a RAMP

Don’t Settle for Anything Less …

R ESOURCES

A NALYSIS

P ROCESS

X X X

What YOU Can Do When You RAMP Up to Web Analytics Success? What YOU Can Do When You RAMP Up to Web Analytics Success?

Make Millions Through Testing

Overstock.com aggressively leveraged A NALYSIS and M ULTIVARIATE TESTING to improve site design

Analysis finds that visitors using site search are better customers

Analysts recommend improving the visibility of site search

Controlled experimentation allows testing of different treatments for site search

One successful experiment returns a 2% increase in visitors using site search

RESULT: A six-figure lift in weekly revenue, annualized to a nearly 1% increase in total company revenue

Save Millions through Careful Analysis

A well-known brand in very competitive market leveraged R ESOURCES, A NALYSIS, and P ROCESS for search engine marketing

Institutionalized effective reporting for search marketing efforts

Observed dramatic changes in core search key performance indicators

Analysts uncovered fraudulent behavior occurring in search partner network

Further analysis revealed roughly 15% of all clicks from one engine were fraudulent

RESULT: A six-figure refund check and annualized savings of roughly 5% of a multi-million dollar search marketing budget

Save Millions on Resources

Belo Interactive Media leveraged R ESOURCES and P ROCESS to support a diverse and distributed organization

Central group standardizes on Omniture for company-wide reporting (hub-and-spoke)

Analysts develop custom dashboards and automated reporting workflow

Focus on the end-user results in specific reports for specific business needs

Automation of reporting allows for more time to conduct analysis

RESULT: A savings of 240 man-hours annually that can be allocated to higher-value analysis projects

Make Millions Through Good Analysis

CompUSA leveraged R ESOURCES and A NALYSIS to isolate a specific group of users on the web site

Reporting shows that “Product Compare” functionality is under-utilized

Visitor segmentation is used to isolate visitors using “Product Compare” functionality

Analysts discover that this segment had a 33% higher average order value

Changes made based on this analysis increase traffic to “Compare” functionality by 11%, increase purchases by 16%, and reduce abandonment from these pages by 56%