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Monetize your digital channel to prioritize potential opportunities

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Presentation by Aurélie Pols at Superweek 2014 (Hungary). The objectives of the session are to provide a simple and practical approach to classic and reverse monetization and learn how to prioritize your opportunities within your company. 

- What are the biggest obstacles companies face to be successful in Digital Analytics? 

- Do you want to continue being a reporting monkey?

- How to monetize? 

- What if my website doesn´t sell?

- What´s the value of a lead and a visit?

- Monetizing different types of sites behaviors

- Common roadblocks to monetizing behaviors 

- and much more ;)

Published in: Technology, Business

Monetize your digital channel to prioritize potential opportunities

  1. 1. Monetize to Prioritize January 2014 – Superweek 2014– René Dechamps Otamendi
  2. 2. Monetize to prioritize         Objectives of the session Provide you a simple and practical approach to: •  Learn classic & reverse monetization •  Prioritize your opportunities •  Be able to use it tomorrow in your company
  3. 3. Before  we  start…   “   Web  Analy*cs  packages  are  sold  as  if  it’s  an  automa*c   coffee  maker.     In  fact,  it’s  more  like  buying  a  coffee  planta*on     You  can  s*ll  get  your  coffee  (eventually),     but  you’re  going  to  have  to  s*ck  your  hands     in  a  lot  of  more  manure  than  you  ever  knew.     Tom  Cunniff  (Yahoo  User  Group)  
  4. 4. Data is the New Oil Page    4  
  5. 5. In  2006  Jim  Sterne  defined  the   ‘ideal’  WA  team…  
  6. 6. Stephen Victor  &  Igor     Frank Nipper Henry Dilbert Vincent Cole Sigmund
  7. 7. Shane & Jason delivered a presentation about monetization at eMetrics years ago         Shane Atchison & Jason Burby @ShanePOSSIBLE @JasonBurby Antes:  
  8. 8. What’s the biggest obstacle companies face to be successful in Digital Analytics?
  9. 9. In 2007… And today in many (most?) cases         Acting on the findings “What is the most difficult aspect of analytics for your company?” Pulling together the data Forming the hypothesis Developing the analytical models Interpreting the results 24% 9% 12% 3% Acting on the findings 53% Source: Forrester Research
  10. 10. Do you want to continue to be a reporting monkey?
  11. 11. What’s the best method to overcome this obstacle?
  12. 12. Monetize to prioritize         Use monetization models Definition: Assigning monetary values to the different behaviors to understand and quantify the value of the digital channel.
  13. 13. Monetize to prioritize         How to monetize? We need first to understand the business processes of the digital property we’re analyzing. How and where do we earn money?
  14. 14. Monetize to prioritize         What if my website dosen’t sell? It can sell indirectly or help cost reductions that we can also monetize Examples: •  A lead generation website •  A Support site that reduces the Call Center costs
  15. 15. Monetize to prioritize         Monetize a lead generation website What’s the value of a lead? Number of average leads per month via web: % converted into clients in 3 months: Number of new clients in 3 months: Average sale value: Average margin: Average profit per sale: Value of a lead: 10.000 2,50% 250 2.000,00 € 60% 1.200,00 € 30,00 €
  16. 16. Monetize to prioritize         Monetize a lead generation website What’s the value of a visit? Number'of'visits'per'month: Average number of leads per month from site: % converted into clients in 3 months: Number of new clients in 3 months: Average sale value: Average margin: Average profit per sale: Value of a lead Value of a visit 500.000 10.000 2,50% 250 2.000,00 € 60% 1.200,00 € 30,00 € '''''''''''' 0,60'€
  17. 17. Monetize to prioritize         Monetizing desired behaviors Desired'behavior 1.'Leads'generated'(contact) 2.'Catalogue'request 3.'Sample'request Monthly'impact ''''''300.000,00'€ ''''''''70.000,00'€ ''''''150.000,00'€ Anual'impact '3.600.000,00'€ ''''' 840.000,00'€ '1.800.000,00'€ 1.#Leads#generated Number'of'visits'per'month: Average number of leads per month from site: % converted into clients in 3 months: Number of new clients in 3 months: Average sale value: Average margin: Average profit per sale: Value of a lead: Value of a visit: 500.000 10.000 2,50% 250 2.000,00 € 60% 1.200,00 € 30,00 € '''''''''''' 0,60'€
  18. 18. Monetize to prioritize         We can Monetize different types of site behaviors •  Lead generation •  eCommerce •  Customer service •  Branding •  Ad-Revenue Driven
  19. 19. Monetize to prioritize         Understanding delayed conversions
  20. 20. Monetize to prioritize         Prioritizing opportunities Monetizing site behaviors can help you: •  •  •  •  Understand overall value of digital channel Where to focus research & analysis efforts Prioritize potential opportunities Evaluate the true impact of changes
  21. 21. Monetize to prioritize         Monetize potential returns PURCHASE FUNNEL Category X Home Last step completed Conversion rate Value of purchase Classic monetization 120.428 9.177 7,62% 50,00 € (adjust € to see impact of opportunity) Future conversion rate 7,62% 8,00% 8,25% 8,50% 8,75% 9,00% 9,25% 9,50% 9,75% 10,00% 10,25% 10,50% 10,75% Orders 9.177 9.634 9.935 10.236 10.537 10.839 11.140 11.441 11.742 12.043 12.344 12.645 12.946 Incremental orders 457 758 1.059 1.360 1.662 1.963 2.264 2.565 2.866 3.167 3.468 3.769 Monthly incremental End year impact value (July launch) - € - € 22.862,00 € 480.102,00 € 37.915,50 € 796.225,50 € 52.969,00 € 1.112.349,00 € 68.022,50 € 1.428.472,50 € 83.076,00 € 1.744.596,00 € 98.129,50 € 2.060.719,50 € 113.183,00 € 2.376.843,00 € 128.236,50 € 2.692.966,50 € 143.290,00 € 3.009.090,00 € 158.343,50 € 3.325.213,50 € 173.397,00 € 3.641.337,00 € 188.450,50 € 3.957.460,50 € End year impact (Sept Launch) - € 137.172,00 € 227.493,00 € 317.814,00 € 408.135,00 € 498.456,00 € 588.777,00 € 679.098,00 € 769.419,00 € 859.740,00 € 950.061,00 € 1.040.382,00 € 1.130.703,00 € Reverse monetization Impact of three months delay - € -342.930,00 € -568.732,50 € -794.535,00 € -1.020.337,50 € -1.246.140,00 € -1.471.942,50 € -1.697.745,00 € -1.923.547,50 € -2.149.350,00 € -2.375.152,50 € -2.600.955,00 € -2.826.757,50 €
  22. 22. Monetize to prioritize         Monetize potential returns PURCHASE FUNNEL Category X Home Last step completed Conversion rate Value of purchase Future conversion rate 7,62% 8,00% 8,25% 8,50% 8,75% 9,00% 9,25% 9,50% 9,75% 10,00% 10,25% 10,50% 10,75% 120.428 9.177 7,62% 65,00 € (adjust € to see impact of opportunity) Monthly Incremental incremental End year impact Orders orders value (July launch) 9.177 - € - € 9.634 457 29.720,60 € 624.132,60 € 9.935 758 49.290,15 € 1.035.093,15 € 10.236 1.059 68.859,70 € 1.446.053,70 € 10.537 1.360 88.429,25 € 1.857.014,25 € 10.839 1.662 107.998,80 € 2.267.974,80 € 11.140 1.963 127.568,35 € 2.678.935,35 € 11.441 2.264 147.137,90 € 3.089.895,90 € 11.742 2.565 166.707,45 € 3.500.856,45 € 12.043 2.866 186.277,00 € 3.911.817,00 € 12.344 3.167 205.846,55 € 4.322.777,55 € 12.645 3.468 225.416,10 € 4.733.738,10 € 12.946 3.769 244.985,65 € 5.144.698,65 € End year impact (Sept Launch) - € 178.323,60 € 295.740,90 € 413.158,20 € 530.575,50 € 647.992,80 € 765.410,10 € 882.827,40 € 1.000.244,70 € 1.117.662,00 € 1.235.079,30 € 1.352.496,60 € 1.469.913,90 € Impact of three months delay - € -445.809,00 € -739.352,25 € -1.032.895,50 € -1.326.438,75 € -1.619.982,00 € -1.913.525,25 € -2.207.068,50 € -2.500.611,75 € -2.794.155,00 € -3.087.698,25 € -3.381.241,50 € -3.674.784,75 €
  23. 23. Monetize to prioritize         Lead generation monetization Visit-to-lead conversion Monthly Site Visits Monthly leads from site Current visit-to-lead conversion rate Value of lead Future Conversion Rate: 2,381% 2,50% 2,75% 3,00% 3,25% 3,50% 3,75% 4,00% 4,25% 4,50% 4,75% 5,00% 5,25% 5,50% 5,75% 6,00% 6,25% Inquiries 500 525 578 630 683 735 788 840 893 945 998 1.050 1.103 1.155 1.208 1.260 1.313 21.000 500 (Contact, brochure, webinar, ...) 2,381% € 238,00 (adjust € value to see the impact) Incremental Inquiries 25 78 130 183 235 288 340 393 445 498 550 603 655 708 760 813 Lost Opportunity Lost Opportunity Monthly Annual Delaying Optimizaiton 3 Delaying Optimizaiton Incremental Value Incremental Value Months 6 Months - € - € - € - € 5.950,00 € 71.400,00 € -17.850,00 € -35.700,00 € 18.445,00 € 221.340,00 € -55.335,00 € -110.670,00 € 30.940,00 € 371.280,00 € -92.820,00 € -185.640,00 € 43.435,00 € 521.220,00 € -130.305,00 € -260.610,00 € 55.930,00 € 671.160,00 € -167.790,00 € -335.580,00 € 68.425,00 € 821.100,00 € -205.275,00 € -410.550,00 € 80.920,00 € 971.040,00 € -242.760,00 € -485.520,00 € 93.415,00 € 1.120.980,00 € -280.245,00 € -560.490,00 € 105.910,00 € 1.270.920,00 € -317.730,00 € -635.460,00 € 118.405,00 € 1.420.860,00 € -355.215,00 € -710.430,00 € 130.900,00 € 1.570.800,00 € -392.700,00 € -785.400,00 € 143.395,00 € 1.720.740,00 € -430.185,00 € -860.370,00 € 155.890,00 € 1.870.680,00 € -467.670,00 € -935.340,00 € 168.385,00 € 2.020.620,00 € -505.155,00 € -1.010.310,00 € 180.880,00 € 2.170.560,00 € -542.640,00 € -1.085.280,00 € 193.375,00 € 2.320.500,00 € -580.125,00 € -1.160.250,00 €
  24. 24. Monetize to prioritize         Understand impact of lift Ad revenue supported site Impact of increasing visits per person & page views per visit         Assumptions  5.234.000      14.132.000      26.144.200      2,70      1,85      174.688.000      5,25  €     Current Monthly Uniques Current Monthly Visits Current Monthly Page Views Current Monthly Visits per Person Current Page Views per Visit Current Ad Impressions Current Average CPM         10%   5%   10%   Lift in Uniques Lift in Visits per Person Lift in Page Views Per Person         Impact on Page Views Current Page Views Forecasted Page Views  26.144.200      33.216.206     27%   % Change Additional Page Views Impact on Ad Revenue Based on Current CPM Current Impressions Forecasted Impressions based on Increased PVs Additional Impressions Generated/Available Current CPM Addl Potential Monthly Rev. Based on Avg CPM Addl Potential Annual Rev. Based on Avg CPM 7.072.006          174.688.000      221.941.104      47.253.104      5,25  €     248.078,80 € 2.976.945,55 €
  25. 25. Monetize to prioritize         Prioritize opportunities Potential lift through optimization Effort (int + Ext) 12 months revenue impact 12 months ROI Opportunity 1 45.000,00 € 3.570.693,75 € 23,80 Opportunity 2 150.000,00 € 10.002.447,00 € 20,00 Opportunity 3 40.000,00 € 1.177.605,00 € 8,83 Opportunity 4 65.000,00 € 3.131.183,25 € 14,45 300.000,00 € 17.881.929,00 € 17,88 Total potential impact
  26. 26. Monetize to prioritize         Prioritize opportunities Average forecast future conversion estimate Opportunity Current conversion rate Current estimated incremental sales Future estimated incremental sales Opportunity 1 0,28% 137 0,33% 160 23 156.400,00 € 1.876.800,00 € 50.000,00 € 37,54 Opportunity 2 1,12% 87 1,64% 127 40 272.000,00 € 3.264.000,00 € 75.000,00 € 43,52 Opportunity 3 1,35% 898 1,54% 1.024 126 856.560,64 € 10.278.727,68 € 200.000,00 € 51,39 Opportunity 4 0,29% 135 0,35% 162 27 183.600,00 € 2.203.200,00 € 100.000,00 € 22,03 Opportunity 5 0,29% 225 0,33% 255 30 204.000,00 € 2.448.000,00 € 50.000,00 € 48,96 Additional sales Estimated monthly potential Estimated annual Estimated cost 12 months potential to optimize ROI
  27. 27. Monetize to prioritize         Dynamic prioritization Why prioritize at all? Can you do it now?
  28. 28. Monetize to prioritize         Optimización y testing Endless testing possibilities… Limited time - 20% New l arriva ! Buy Now Free shipping Submit …pricing, promotional offers, headline copy, visual design, customer segments, content copy, colors, calls-to-action, buttons styles, fonts, navigation, featured products, registration, ad placement...
  29. 29. Monetize to prioritize         A/B Testing
  30. 30. Monetize to prioritize         Evaluate the impact ofchanges Launch date Estimated impact (12months) Iachieved impact (12months) Delta (%) Cost ROI Opportunity*X October ** 1.876.800,00*€ ***1.554.000,00*€ 917% **** 50.000,00*€ *31,08 Opportunity*Y October ** 3.264.000,00*€ ***3.549.000,00*€ 9% **** 75.000,00*€ *47,32 Total ** 5.140.800,00*€ ***5.103.000,00*€ 91% *125.000,00*€ *40,82
  31. 31. Monetize to prioritize         Common roadblocks to monetizing behaviors Uncertainty where to start Lack of executive support Full team buy in Concern over being 100% perfect
  32. 32. Monetize to prioritize         Why monetization works? Helps focus efforts on key areas rather than the entire site. Helps translate ideas/opportunities into real euro values. Can de used when looking at all visitors as well as segmented. Once you put numbers in front of people in euro terms, they don’t want (can’t) to be the one to hold up or ignore a 1M€opportunity.
  33. 33. Monetize to prioritize         Last tip It is imperative you look at not only the behaviors that benefit your company near term, but also how it impacts you clients and prospects long-term. Don’t risk alienating 80% of your site visitors for only a nominal gain in conversion, it usually isn’t worth it… Eg: emailing
  34. 34. Monetize to prioritize        
  35. 35. Gracias         “The future belongs to those that really ask good questions!” Gracias   René  Dechamps  Otamendi   TwiUer:  @rdo  //  Email:  rene@MindYourGroup.com    

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