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Saturday, March 31, 2007

Google Search Terms

I was talking with a Google Account Manager when he asked me: "If you had a web site that sold shoes, which search key word would be more or Nike Pegasus?" Interesting question, isn't it? While shoes is a more general term, Nike Pegasus focuses on a specific product a seasoned Googler (Yahoo'er, MSN'er) would enter. While Internet shoppers become more sophisticated and technology continues to evolve...the answer will most always depend on the ROI of each Ad word across a specified period of time, e.g. December 2006.

For our fictitious web site, let's assume we averaged 850,000 unique visitors per month. Out of those 850,000 visitors, 3% convert by buying purchasing shoes for at least $50 per pair, $1,275,000. Now let's apply the statistics for the key word "Shoes" during December 2006:

  • Drove 1,000,000 unique visitors to the site during 12/2006.
  • 45% of those visitors where 1st time visitors = 450,000
  • 5% purchase conversion rate at $75 each = $3,750,000
  • Cost per click = $.60 > $3,750,000 - $600,000 = $3,150,000 profit.
  • 30% conversion rate for registering new accounts = 300,000

Results for "Nike Pegasus:"

  • Drove 200,000 unique visitors to the site during 12/2006
  • 55% of those visitors where new to the site = 110,000
  • 8% purchase conversion rate at $120 each = $1,920,000
  • Cost per click = $.50 > $1,920,000 - $100,000 = $1,820,000
  • 40% converted by registering for new accounts = 80,000

Although "shoes" is a more generic keyword that "Nike Pegasus," its PPC is 20% greater due to its popular demand by the marketplace. "Shoes" drove more monthly unique visitors to our site than any other month for all of 2006 and earned $1,330,000 more in profit than "Nike Pegasus." Not bad, right? But check this out...The overall KPI conversion rates for Nike Pegasus is actually greater than the conversion rates for shoes. In other words, while "Nike Pegasus" drove less traffic and profit to our site than "shoes," its conversion rates as a percentage were actually higher! A greater amount of visitors per keyword spent more money per purchase and registered for new accounts.

I'd appreciate your feedback. What action can we take with this data? What should we tell our fictitious client to do next? Spend more on specific terms or generic terms? I know this depends on the business goals. I'm actually dealing with this in my real life job...generic terms driving more traffic but generating less conversion rates as a percentage. When I brought this up with my client, they mentioned that driving a visitor to the site was considered a KPI, not just converting. I hope I inspired creative thought.

Monday, March 26, 2007

Web Analytics Solutions

For my 1st official post (woo-hoo!), I thought I would discuss what I have learned from working with some of the analytics solutions out there. I've implemented and worked with WebTrends, Omniture, Google Analytics and IBM's SurfAid, (now owned by Coremetrics)...log file analysis tools as well as JavaScript driven ASP solutions. I have built great relationships with these firms and had to disappoint them when it was time to move on. OK, enough of my rambling on. What's my point? Never, and I mean NEVER, fall in love with a particular solution or firm. No need to wave a flag or become emotionally attached to what is just a business solution. Take all of your emotions out of the equation and make decisions that will help you best achieve the results you demand. Partner with a vendor that understands your business goals and can demonstrate how to bend their technology to your business requirements over time. I imagine I am not the first to fall into this irrational pit-fall. If you begin to experience any of the symptoms below, seek help immediately:

  • Wearing only vendor labeled clothing at work and on Saturday nights
  • Clouded judgement and tunnel vision
  • Vendor specific bigotry
  • Encouraging your sales rep to run for president
  • Rage attacks on the Web Analytics Forum

The first step to recovery is to conduct group therapy sessions with your stakeholders/clients where you openly discuss the limitations of your current/perspective solution. There isn't an Analytics provider out there that can deliver 100% against your requirements. Over the past few years, Analytics software has become much faster, powerful and cheaper. The "commoditization" of this technology has driven our beloved vendors to merge and grow by acquisition at break-neck speed. It's a great time to be in the analytics industry! We have access to very powerful tools that can provide insight into our businesses like never before. By understanding your business goals and documenting their continual evolution, you will be able to mak sound business decisions.