Dashboarding marketing channel roi and and making optimal channel spend decisions every week 2015 02-20
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Making optimal marketing spend decisions across multiple digital (and non-digital marketing channels requires algorithmic attribution and processes to use its output tactically. This presentation reviews our duties as marketers to help the CEO/CMO maximize shareholder value, then discusses how we can fulfill this duty by calculating channel ROI and using it to allocate funds among channels and maximize overall marketing performance. This requires algorithmic attribution, so we then have a review of Forrester's top-rated attribution vendors and introduce a matrix by which you can evaluate them for suitability to your business. The remainder of the presentation discusses how to take the attribution/ROI output, set a channel/site performance plan, then collaborate with all stakeholders to ensure achievement of your company's annual profit goal.
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Dashboarding marketing channel roi and and making optimal channel spend decisions every week 2015 02-20
- 1. Dashboarding Channel ROI (…and making smart channel spend decisions every week) Etail West, Palm Springs, CA February 19, 2015
- 2. 2014 Budget Review Wyndham divisions and family of brands jonathan.isernhagen@wyn.com @jon_isernhagen World’s largest hotel company, based on number of hotels World’s largest lodging loyalty program, based on participating hotels Approximately 7,500 hotels and 646,900 rooms More than 121 million room-nights sold in 2013 More than 9% of U.S. hotel room supply World’s largest vacation ownership developer and marketer Approximately 185 vacation ownership resorts with approx. 23,000 units throughout North America, the Caribbean and South Pacific More than 900,000 owners of vacation ownership interests World’s largest vacation exchange network World’s largest professionally managed vacation rentals business Approximately 107,000 properties in nearly 100 countries More than 3.7 million exchange members Send approximately 4 million consumers on vacation through vacation rentals
- 3. 2014 Budget Review Top Worldwide Lodging Franchisors jonathan.isernhagen@wyn.com @jon_isernhagen # of Rooms # of Hotels InterContinental Hotels Group 675,982 4,602 Marriott International 660,394 3,800 Hilton Worldwide 652,957 3,966 Wyndham Hotel Group 627,437 7,342 Choice Hotels International 538,222 6,725 Accor SA 450,487 3,516 Starwood Hotels & Resorts Worldwide 335,415 1,134 Best Western International 312,467 4,050 Shanghai Jin Jiang International Hotels 214,796 1,401 Home Inns & Hotels Management 214,070 1,772
- 4. 2014 Budget Review Session description Optimizing Campaign Measurement And Generating Dashboards To Share Your Data Insights: 1) Getting the right model for measurement 2) Measuring channels’ effectiveness at driving conversion and understanding their impact on one another 3) Getting the right mix of tools to enable consistent measurement jonathan.isernhagen@wyn.com @jon_isernhagen
- 5. 2014 Budget Review Presentation agenda 1) Marketers’ mission 2) Dashboarding channel ROI a) Spend b) Variable contribution c) Attribution a) mechanics b) vendors 3) Tactical guidance of the marketing team a) Performance accountability b) Eyes on glass 4) Takeaways jonathan.isernhagen@wyn.com @jon_isernhagen
- 6. 2014 Budget Review CEO’s/our duty to the (publicly-traded) company • Brand awareness / sentiment? • Client loyalty? • Employee satisfaction? • Traffic to the site? • Shopper movement down the funnel? • Transaction volumes? • Shareholder value? • Customer focus / personalization? • Community involvement through charitable actions? jonathan.isernhagen@wyn.com @jon_isernhagen Maximize which one of the following metrics….
- 7. 2014 Budget Review Increase spending until $1 out brings $1 back… ….spend-spend-spend-spend-spend-stop jonathan.isernhagen@wyn.com @jon_isernhagen
- 8. 2014 Budget Review …which is the point at which incremental ROI = 0% - 8 - ROI = (VCM – Spend) Spend Abbreviation Term Definition ROI Return on Investment Indicator of investment profitability. Positive = good. VCM Variable Contribution Margin The amount of profit driven by a given transaction. Spend Channel Spend The amount spent driving traffic to the site during the period in question Calculated over a specified time period of investment and return. jonathan.isernhagen@wyn.com @jon_isernhagen
- 9. 2014 Budget Review Our goal: an ROI Dashboard Channel* Desktop Tablet Mobile Brand 20% Brand SEM 62% 51% 38% Display -5% -12% -7% Display - Retargeting 26% 25% 29% Email 250% Meta search 18% 22% 10% Non-brand SEM -30% -18% -40% SEO 500% 520% 390% Social media -5% -15% 15% - 9 - *of impression/click, not necessarily of consumer conversion jonathan.isernhagen@wyn.com @jon_isernhagen
- 10. 2014 Budget Review Presentation agenda 1) Marketers’ mission 2) Dashboarding channel ROI a) Spend b) Variable contribution c) Attribution a) mechanics b) vendors 3) Tactical guidance of the marketing team a) Performance accountability b) Eyes on glass 4) Takeaways jonathan.isernhagen@wyn.com @jon_isernhagen
- 11. 2014 Budget Review ROI = (VCM – Spend) Spend Spend - 11 - Which spend do you include? jonathan.isernhagen@wyn.com @jon_isernhagen
- 12. 2014 Budget Review Marketing ≈ Farming 1) Seed = impressions 2) Transactions = fruit - 12 - …but marketers plant & harvest constantly. jonathan.isernhagen@wyn.com @jon_isernhagen
- 13. 2014 Budget Review spend spendspendspend How changes in spend can mess up ROI - 13 - $ time profit impact impact spend impact Jan Feb Mar jonathan.isernhagen@wyn.com @jon_isernhagen
- 14. 2014 Budget Review Variable Contribution Margin (“VCM”) - 14 - ROI = (VCM – Spend) Spend 1) What is the profit from each transaction? 2) Which channels deserve part/all of the credit for driving each transaction? jonathan.isernhagen@wyn.com @jon_isernhagen
- 15. 2014 Budget Review VCM: the profit on each transaction = Transaction revenue - variable non-marketing expenses: • Revenue: – Supplier Commissions; – GDS incentives; – Overrides (lumpy: average/booking must be assumed) – Media (not transaction-driven, but has to be modeled in somewhere) – Attached bookings / Lifetime value: try to gauge value without double-counting • Expenses: – Website hosting/capacity costs – Data processing expenses – Other expenses which vary by transaction or site activity volume - 15 - jonathan.isernhagen@wyn.com @jon_isernhagen
- 16. 2014 Budget Review Which treatment(s) triggered the purchase? "Half the money I spend on advertising is wasted; the trouble is, I don't know which half.“ -John Wanamaker Father of Modern Advertising jonathan.isernhagen@wyn.com @jon_isernhagen
- 17. 2014 Budget Review How badly do you want to know? Raylan: You'll pay to find that out. Boyd: What are you packing? jonathan.isernhagen@wyn.com @jon_isernhagen
- 18. 2014 Budget Review Choosing your attribution strategy Do you want/need true attribution*? Do you have data guys? Do they have bandwidth for this? Yes No No Use your site metric solution’s attribution Yes Yes Hire a vendor Can you access your data? Yes No *Do you have: 1) Large enough budget? 2) Multiple channels? 3) Belief in ROI “knowability?” DIY No jonathan.isernhagen@wyn.com @jon_isernhagen
- 19. 2014 Budget Review • Sends • Opens Collecting the necessary data Analysis space • Clicks • Visitors • Transactions • VCM • Media impressions Site metrics tool Back office system • Channel-specific phone #s Email service provider Call Center IVR • Impressions • Clicks • Spend Display ad server e.g. SAS, Revolution Analytics, SPSS, Teradata Warehouse Miner SEM bid management tool • Impressions • Clicks • Spend • GRPs • Spend Television plan • Impressions • Clicks • Spend Meta search feeds Spend Manual spend entry table jonathan.isernhagen@wyn.com @jon_isernhagen
- 20. 2014 Budget Review Connecting the necessary data Transactions Profiles Customers Sessions ∞ 1∞ 1 Clicks:TransactionsClicks ∞ 11 ∞ ∞ 1∞ 1 Calls Sends Opens ∞ 1 ∞ 1 Email IVR GRPs TV plan Impressions Ad server Impressions ∞ 1 ∞ 1 ∞ 1 Back officeSite monitoring tool CRM system 1 ∞ jonathan.isernhagen@wyn.com @jon_isernhagen
- 21. 2014 Budget Review Presentation agenda 1) Marketers’ mission 2) Dashboarding channel ROI a) Spend b) Variable contribution c) Attribution a) mechanics b) vendors 3) Tactical guidance of the marketing team a) Performance accountability b) Eyes on glass 4) Takeaways jonathan.isernhagen@wyn.com @jon_isernhagen
- 22. 2014 Budget Review Forrester surveys of algorithmic attribution vendors jonathan.isernhagen@wyn.com @jon_isernhagen 2012 2014
- 23. 2014 Budget Review Criteria for attribution vendor evaluation 1) Independence / media neutrality 2) Independent data collection 3) Cross-device natively 4) Brand search & affiliate conversion controls 5) Programmatic capability 6) Ad viewability 7) Time to onboard 8) Cost jonathan.isernhagen@wyn.com @jon_isernhagen
- 24. 2014 Budget Review Independence – Media agnostic Vendor Independent Score Abakus Yes 1 AOL/Convertro No 0 C3 Metrics Yes 1 eBay/Clearsaleing No 0 Adometry/Google No 0 Marketing Evolution Yes 1 Marketshare Yes 1 Rakuten DC Storm No 0 Visual IQ Yes 1 - 24 - jonathan.isernhagen@wyn.com @jon_isernhagen Vendors owned by Media companies are not considered neutral and scored with a value of 0. Independent vendors are scored with the value of 1.
- 25. 2014 Budget Review Independent data collection Vendor Collect own data Score Abakus No 0 AOL/Convertro Yes 1 C3 Metrics Yes 1 eBay/Clearsaleing Yes 1 Adometry/Google Yes 1 Marketing Evolution No 0 Marketshare No 0 Rakuten DC Storm Yes 1 Visual IQ No 0 - 25 - jonathan.isernhagen@wyn.com @jon_isernhagen Vendors which collect their own data via tags are scored with the value of 1. Vendors which do not collect data are scored with a 0.
- 26. 2014 Budget Review Cross-device visibility native to the platform Vendor Cross-device visibility Score Abakus No 0 AOL/Convertro Yes 1 C3 Metrics Yes 1 eBay/Clearsaleing No 0 Adometry/Google No 1* Marketing Evolution No 0 Marketshare No 0 Rakuten DC Storm No 0 Visual IQ No 0 - 26 - jonathan.isernhagen@wyn.com @jon_isernhagen Vendors which provide cross-device native to the platform for no additional fee are scored with a value of 1, other vendors who either do not provide the service or who require an additional vendor are scored with a value of 0. (*coming in mid-2015)
- 27. 2014 Budget Review Brand search & affiliate conversion controls Vendor Conversion controls Score Abakus No 0 AOL/Convertro Yes 1 C3 Metrics Yes 1 eBay/Clearsaleing No 0 Adometry/Google Yes 1 Marketing Evolution No 0 Marketshare No 0 Rakuten DC Storm No 0 Visual IQ No 0 - 27 - jonathan.isernhagen@wyn.com @jon_isernhagen Brand search, Affiliates and other vendors dominate activity at the bottom of the funnel. Vendors which are able to control for this activity within the model are scored with a value of 1, vendors which have not addressed this issue are scored with a value of 0.
- 28. 2014 Budget Review Programmatic capability Vendor Programmatic Score Abakus No 0 AOL/Convertro Yes 1 C3 Metrics Yes 1 eBay/Clearsaleing No 0 Adometry/Google Yes 1 Marketing Evolution No 0 Marketshare No 0 Rakuten DC Storm No 0 Visual IQ No 0 - 28 - jonathan.isernhagen@wyn.com @jon_isernhagen Programmatic capability requires independent view tags and integration with trading desks and Ad Networks. Vendors which have this capability are scored with the value of 1, vendors which do not are scored with a value of 0.
- 29. 2014 Budget Review Display ad viewability audit Vendor Display audit Score Abakus No 0 AOL/Convertro No 0 C3 Metrics Yes 1 eBay/Clearsaleing No 0 Adometry/Google Yes 1* Marketing Evolution No 0 Marketshare No 0 Rakuten DC Storm No 0 Visual IQ No 0 - 29 - jonathan.isernhagen@wyn.com @jon_isernhagen Greater than 50% of all display ads are never seen. Vendors which have integrated viewability which accounts for cross-domain iframe ads are scored with a value of 1, other vendors which cannot determine viewability are scored with a value of 0. (*coming in late 2015)
- 30. 2014 Budget Review Time to onboard Vendor Time to onboard Score Abakus 1 month 1 AOL/Convertro 2 months 0 C3 Metrics 7 days 1 eBay/Clearsaleing 1.5 months 1 Adometry/Google 3 months 0 Marketing Evolution 1.5 months 1 Marketshare 1 month 1 Rakuten DC Storm 3 months 0 Visual IQ 3 months 0 - 30 - jonathan.isernhagen@wyn.com @jon_isernhagen Time to onboard is crucial as recommendations from any platform cannot be considered until the platform is fully live. Vendors which are able to onboard in less than 2 months are scored with a value 1. Vendors requiring 2 months or more are scored with a value of 0.
- 31. 2014 Budget Review Cost Vendor Cost/year Contract period Score Abakus $50K - $150K Yearly 1 AOL/Convertro $60K - $1M Yearly 0 C3 Metrics $60K - $150K Monthly 1 eBay/Clearsaleing $60K - $850K Yearly 1 Adometry/Google $275K - $300K Yearly 0 Marketing Evolution $150K - $1M Yearly 1 Marketshare $200K - $1M Three-yearly 1 Rakuten DC Storm $170K Yearly 0 Visual IQ $325K - $1M Yearly 0 - 31 - jonathan.isernhagen@wyn.com @jon_isernhagen Vendors with a minimum yearly fee of less than $100,000 are scored with a value of 1. Vendors with minimum yearly fees exceeding $100,000 are scored with a value of 0.
- 32. 2014 Budget Review Final scores Vendor Score Abakus 3 AOL/Convertro 5 C3 Metrics 8 eBay/Clearsaleing 3 Adometry/Google 5 Marketing Evolution 2 Marketshare 2 Rakuten DC Storm 1 Visual IQ 2 - 32 - jonathan.isernhagen@wyn.com @jon_isernhagen
- 33. 2014 Budget Review Running the process 1) For each site visitor a) Assemble visit history b) Create variables to represent: i. Channel impressions ii. Channel clicks iii.Past purchases 2) Regress or use machine learning algorithm a) Ascertain which channel touches predict booking b) Give VCM credit to causal channels 3) Calculate ROI a) Use each channel’s VCM and spend b) Where ROI is positive, spend up c) Where ROI is negative, cut spend or change tactics jonathan.isernhagen@wyn.com @jon_isernhagen
- 34. 2014 Budget Review ROI Dashboard Channel* Desktop Tablet Mobile Brand 20% Brand SEM 62% 51% 38% Display -5% -12% -7% Display - Retargeting 26% 25% 29% Email 250% Meta search 18% 22% 10% Non-brand SEM -30% -18% -40% SEO 500% 520% 390% Social media -5% -15% 15% - 34 - *of impression/click, not necessarily of consumer conversion jonathan.isernhagen@wyn.com @jon_isernhagen
- 35. 2014 Budget Review Presentation agenda 1) Marketers’ mission 2) Dashboarding channel ROI a) Spend b) Variable contribution c) Attribution a) mechanics b) vendors 3) Tactical guidance of the marketing team a) Performance accountability b) Eyes on glass 4) Takeaways jonathan.isernhagen@wyn.com @jon_isernhagen
- 36. 2014 Budget Review The Concept: “One throat to choke.” UVs x Transactions x Profit = Planned UV Transaction Profit jonathan.isernhagen@wyn.com @jon_isernhagen If this misses… CMO strangles…. UVs The channel managers (SEM, SEO, Display, Brand, Email, Meta, Social) Conversion The site owners (Site performance, A/B testing, Merchandising, Content) AOV Merchandising, Content
- 37. 2014 Budget Review The Forecast/Plan In order to give context to your marketing and site performance, you’ll need a plan/prediction, by: • Date; • Channel; • Device type, and; • Line of business (if applicable). For these metrics: • UVs, • Conversion • Contribution/transaction jonathan.isernhagen@wyn.com @jon_isernhagen
- 38. 2014 Budget Review The Process On a weekly basis: 1) Solicit channel managers’ predictions for: a) Spend b) UVs 2) Flash forward one week: a) Compare predictions with actual results b) Take appropriate corrective actions jonathan.isernhagen@wyn.com @jon_isernhagen
- 39. 2014 Budget Review Channel performance by line of business jonathan.isernhagen@wyn.com @jon_isernhagen
- 40. 2014 Budget Review Waterfall: drivers of performance change jonathan.isernhagen@wyn.com @jon_isernhagen This week last year This week this year Factors/Contributors to the change
- 41. 2014 Budget Review Eyes on glass: historical comparison overlays jonathan.isernhagen@wyn.com @jon_isernhagen
- 42. 2014 Budget Review Presentation agenda 1) Marketers’ mission 2) Dashboarding channel ROI a) Spend b) Variable contribution c) Attribution a) mechanics b) vendors 3) Tactical guidance of the marketing team a) Performance accountability b) Eyes on glass 4) Takeaways jonathan.isernhagen@wyn.com @jon_isernhagen
- 43. 2014 Budget Review Takeaways 1) Always know how your activities boost profits 2) Focus on: a) What [spend/efforts] you need to change b) What site functionality problems you need to fix 3) Know the drivers of your site’s performance: a) Use market research/market share resources b) Maintain a log of performance-impacting events c) Understand what’s working for you & competitors 4) Place every metric in a context (vs. LY, vs. plan…) a) Report generation is a commoditized activity b) Curation for senior management is the killer app. jonathan.isernhagen@wyn.com @jon_isernhagen
Editor's Notes
- Hi, my name is Jonathan Isernhagen and I provide analytics for the eCommerce team of…
- …the Wyndham Hotel Group, which is the box on the left. I didn’t know, when they first approached me, that the Wyndham Hotel group had all of these other brands, which was….awkward.
- It turns out that Wyndham is the world’s #4 hotel franchisor on room count and the first in number of properties. Who knew?
- Our session is supposed to cover….
- I am a big fan of channel attribution, so after briefly touching on our mission as marketers, I want to; Discuss how to dashboard marketing channel ROI, then talk about How analysts can provide tactical guidance for day-to-day decision-making by members of the team.
- I keep using this slide because it always seems necessary. These are all areas of focus which other speakers should be our companies’ top priorities. By show of hands, what is the mission of the CEO of a publically-traded company….? Yes,
- The way Marketing supports the CEO in this effort is by spending in each marketing channel up to the point where one additional dollar out nets us exactly one dollar of incremental profit back.
- This is the point for each channel where the incremental ROI flips negative.
- When we do this calculation for each channel, our finished product is an ROI dashboard. This is the foundation upon which every CMO’s channel allocation decisions should be made.
- So, let’s unpack ROI….
- The first component is spend, but what spend do we include?
- Marketing is a lot like farming in that we are always scattering impressions and clicks into the warm, moist, fertile brains of our consumers and hoping to harvest transactions. It is different in that we have no winter. We are always planting.
- This is okay if our spend is constant. If you’re calculating March’s ROI, you know March is taking credit for transactions which were inspired in February, January or before, but you also know you’re starting some goodness in March which won’t pay off until later. However: if you spent less in March than in previous months, your ROI will look artificially positive. This is what farmers call “eating your seed corn.”; likewise, if you spent more in March than in previous months, your ROI will look artificially negative.
- Variable contribution is a two-step process. You have to: determine the profit of each transaction, which is an accounting exercise, and then; which channels deserve the credit for that profit.
- Variable contribution margin is Revenue minus non-marketing expenses: On the Revenue side, you want to include all the goodness a booking drives. On the Expense side, include all non-marketing variable costs associated with completing a transaction.
- Part 2 of the VCM exercise requires someone to gauge which marketing treatments caused each purchase, which is an exercise in customer psychiatry. This can be done, but….
- …using statistical methods or machine learning do what’s called “algorithmic attribution” modeling is difficult and expensive, so you have to ask yourself whether you’re at greater risk from: 1) Wasting money using last click or some other arbitrary attribution method, or; 2) Spending so much on good attribution that you have nothing left to spend on marketing?
- I’ve tried to map out your decision tree: Question #1 is: do you really need to know your true attribution? Are you spending at least $10M/year on marketing? Are you distributing it across multiple channels? Do you believe this stuff is knowable, and is your organization flexible enough to actually shift spend around? The next question is: Can you access your data in a form that lends itself to modeling? If you say “No” to any of these, then use the attribution available from your site metric product. VS, SiteCat and GA all have them. If it’s been “yesses” up til now, your next question is whether you have the data guy in-house to do the modeling, and whether he or she has bandwidth. if either of these are “no”s, then you should think about hiring an attribution model vendor.
- ….whoever does the modeling will need to pull all available impression, click, booking and profit data into a heavy analytical workspace like R or SAS…
- …he or she but usually he will then have to connect the data together to create a rectangular table of causes and effects suitable for regression modeling.
- If you don’t want to do this yourself, there vendors willing to do it on your behalf.
- When I was at Travelocity we used Forrester’s 2012 Wave survey of attribution providers as our starting point to find a suitable attribution vendor. The market has changed a lot since then: Visual IQ is still the market leader, but by a narrower margin; Google, which used to be dead last, acquired Adometry and the combination is has improved; Convertro was purchased by AOL and is almost at parity with Visual IQ.
- C3 Metrics gave me an attribution vendor evaluation matrix which one of their retailer clients put together, which they have authorized me to share. They ask: is the vendor: A seller of media; Able to pixel to collect data directly; Able to cross and deduplicate visitors across devices; Able to bias in favor of bottom-funnel, conversion-linked channels; Able to control brand search and affiliate conversion management tools robotically; Able to audit display ad viewability; Able to onboard new clients quickly, and; Affordable?
- Karen Laine of Adometry assures me that Adometry is firewalled from the rest of Google and that their clients’ data will never get into Google’s hands, and I like and trst Karen, but there’s something about giving the fox access to the chicken coop which still seems risky. This concern applies also to eBay and AOL/Convertro.
- There is something to be said for a vendor being able to pull in historical impression, click, transaction and profit data from your enterprise data warehouse, but there is also something to be said for a vendor having the ability to pixel your site and then gather all the data they need directly, even if you had no data warehouse and/or it’s a mess. AOL/Convertro, C3, eBay/Clearsaleing, Adometry/Google and Rakuten all have this ability.
- If you can’t pull together the channel actions of one visitor across multiple devices, your picture will be incomplete. All vendors can have profile deduplication done by a third party like Blue Kai before feeding data into their models, but the ones who have the deduplication built in can be quicker and less costly.
- C3 believes that search activity at the bottom of the funnel is disproportionately responsible for conversion, and should be credited accordingly. My own preference is to leave all of the data in and let the model discover which clicks and impressions are correlated with good booking behavior.
- It can be advantageous if your attribution vendor can interact directly with tools like Marin and advise them in near-real time if they’ve been responsible for a sale. Your whole system can then opportunistically and precisely react to spikes or dips in customer demand.
- Since >50% of displayed ads are never seen, it can be useful to audit which ones actually appeared before the eyes of humans and had a chance to impact conversion, though presumably the unseen ad “impressions” which aren’t filtered out just weight down their channel.
- All things being equal, it’s better to get up and running faster vs. slower. If this speed comes at the cost of being able to use historical data, and if you sell a product which has a very long consideration/purchase cycle (e.g. cruises), then it may be worth a delay to be able to pull several years of data into the model.
- I can’t vouch for any of these prices (not would I be able to if I could because I’m under NDA with many of these companies) and they may be biased to make C3 look cheaper, but I doubt it. Visual IQ is in the high right corner for a reason and describes themselves as the Cadillac of this industry, so they probably are a little the most expensive. The cater to people who need to make extremely accurate spend decisions with gargantuan marketing budgets.
- C3 Metrics was always going to be the winner of the methodology they provided, but I think it’s a fair comparison so far as it goes. What it doesn’t include, and what I think trumps all other considerations, is: what type of lift does it cause? You’re renting the product to improve your marketing ROI, so all of these other criteria are just proxies for that positive impact. Visual IQ, Adometry and Convertro have all advised me that their new customers typically enjoy a 20%+ improvement in ROI upon initial release, followed by smaller improvements in subsequent months.
- Regardless of whether you do your own model or hire it done, you take the total contribution each channel has driven, subtract spend and divide the total by spend, and then look at the ROI. If positive, spend up. If negative, spend down and/or change tactics.
- Our finished product will look something like this. Despite all of the complexity in the background, the finished output can be presented to the most distracted executive as a grid full of Harvey balls.
- So, once you have this most-important-of-all-dashboards up and running, how do you make smart decisions with your daily operations?
- 1) When I worked at Travelocity the CEO had a philosophy of unified authority and accountability called “one throat to choke.” 2) If you were responsible for something you had the authority to change it. 3) Our annual profit plan could be deconstructed as Unique Visitors to the site times Conversion, times profit per transaction. 4) Mathematically, if the channel people drive enough Uvs and the site people drive high enough conversion and product choice, you must make plan.
- In order to have a plan that you can use easily use for weekly and monthly reporting, it’s a good idea to predict a values for spend, UVs, transactions and contribution by date, marketing channel, device type and line of business, or however you map accountability in your organization. The easiest ways to do this are: With the channel managers: take the lump-sum budget and traffic numbers for last year and ask each channel managers: if you have X$, can you produce Y? With the site owners: calculate historical average conversion on a day level of aggregation and then ask them what incremental impact their A/B tests, content, etc. will have on conversion. If you lay this out in a big rectangular table you can then pivot it in Excel for whatever reporting format you need.
- Then, on a weekly basis: Ask the channel managers what they expect to spend that week and how much traffic they expect to drive, and; Review their actual spend and traffic performance vs. last week’s predictions. Make any appropriate spend adjustment decisions (release more funds for opportunistic spending, or shift from overcompeted to less-competed channels).
- Instead of staring at columns of numbers, it can be useful to visualize this graphically. For every Channel/LOB intersection, for each month, for spend, traffic and transactions, you can show: transactions (blue); planned transactions (grey box), and; projected transactions.
- When you need to explain the factors that got you from last year to this year, or plan to actuals, use a waterfall chart. Waterfalls can be used to illustrate the impact of changes in traffic and conversion by channel or by device type, or lines of business.
- Finally the eyes-on-glass person monitoring site traffic and conversion performance in real time can benefit from a chart that overlays hourly performance from the past seven days, or daily performance for the past 28 days, vs. the previous 4 weeks and 52 weeks ago. This can be done with any metric or ratio of metrics and will make events jump out in stark contrast wherever the lines separate. The 52-week line gives needed context to seasonal changes. Comparing this against a list of known traffic- and conversion-impacting events can greatly reduce time spent troubleshooting.
- So, in conclusion, I would suggest….
- Always steer away from vanity metrics and towards profit metrics whenever they are available. Focus on driving smart decisions instead of collecting “coffee table conversation items. Know the drivers of your site’s performance (was each change caused internally or externally)? Place every metric in a context. Anyone can pull reports, but placing performance in context is valuable and is remembered.