Web Analytics — The Soul of Digital Accountability

POINT OF view
WEB
ANALYTICS
Web Analytics —
The Soul of Digital Accountability
By: Parmjeet Kaur, Manager Marketing Strategy & Analysis and Deepak Jain,
Manager Marketing Strategy & Analysis
Today, a majority of enterprises are under‐invested in analyzing data flowing from digital
channels. Even when enterprises have invested enough money for measurement technology,
they usually fail to apply commensurate resources and effort to make the tools work for their
business. Instead, most organizations focus too much on generating reports and too little on
producing true insights and recommendations, opting for what is easy, not for what is valuable.
When most people think of analytics, the first thought that often comes to mind is a data-dump of
numbers, overloads of information that add more to confusion than to elucidation.
Ask yourself: Are you measuring your success and improving? Do you know why people leave your
website? Do you know your customer satisfaction scores? Are you targeting the right audience?
Senior management, sales and marketing, and customer service teams all need answers to
these questions — all of which can be answered through Web Analytics.
So what is Web Analytics? In its simplest form, it can be defined as one of the ways to help hone
and transform online experiences to help accomplish organizational goals.
“Web Analytics is the science and adeptness that leads
to drive change for websites to increase their profitability
by cultivating a customer’s online experience. It is science
because it uses statistics, data mining techniques, and
a methodological process. It is an art because the analyst
has to draw from various pallets of data sources to find the
impeccable synthesis that will yield actionable insights.”
Avinash Kaushik
This paper describes an imminent change in the digital world, and how Web Analytics plays a vital
role in successful contributions to an organization. We comprehend this not because we believe
there is anything erroneous with today’s Web Analytics functions, but because we believe Web
Analytics should play a bigger role in business decision making in the future.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
THE CORE OF CROSS-CHANNEL ACTIVITIES
For many organizations, the web is a common element of the marketing mix, and as such,
decision makers cannot afford to miss the opportunity to use Web Analytics to close the gaps
between cross-channel marketing strategies. Web Analytics is one of the most critical sources
of activity because of:
• Widespread espousal. The dispersion of Web Analytics is extremely broad and companies
have Web Analytics abilities in place to gather the requisite baseline data. While Forrester’s data
indicates that 73% of businesses are using Web Analytics tools or are evaluating them in a pilot
program, revenue has been hard to come by. Providers of free tools take up 78% of the market
share, and even when businesses are paying for analytics, 37% of them are only doing so in
addition to a free offering.
• Faster turn-around. Activities on the web are executed in quick time spans; campaigns are
often completed in days or even hours, at the speed of light when compared with traditional
media cycles. The ability to gather real time data and analyze it quickly allows for testing and
iterative improvements that few channels can rival.
• Delivered information to a variety of stakeholders. Web Analytics reports and dashboards
can be distributed to the entire marketing team in numerous formats that are appropriate for
varying types of audiences, creating a consistent view of activity and a foundational set of data
for action.
• Substantial qualitative and quantitative data. Websites deliver granular customer data on a
large scale to support significant samples of specific behavior and outcomes. This data includes
a cross-section of known customers as well as anonymous visitors who can be analyzed
and used to support specific intelligence objectives such as segmentation, re-marketing, and
behavioral targeting.
• Useful links to other channels and activities. Just as a website serves as a hub for
customers’ multi-channel activity, Web Analytics provides the ability to measure and attribute
business results to other cross-channel marketing programs.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
ACTION: BEYOND DATA PRESENTATION
At the heart of every analysis is data. At the same time, no analysis is complete if it does not
have actionable recommendations to improve business performance. Analysis is not magic
and it needs a deep business understanding blended with analytical skills. Most organizations
implement good tools and measurement strategies, but when it comes to reaping business
benefits from analytics, they end up with data reporting or a less-than-insightful presentation.
Often, the data presentation is misinterpreted as an analysis and that is where the real value is
lost. When there is an action based upon data, and that action is supplemented with a potential
business value (related to revenue), that is where actual ROI of analytics is measured. To
understand the impact of analytics in decision-making, take an example of eCommerce KPIs
(Key Performance Indicators) to track conversion rates. Most sites have a 2% conversion, but
what about other 98%? How many potential customers did not convert? Why were they dropping
off? Was the wrong audience targeted? If you get answers to your questions, your conversion will
improve. In addition, decide if those potential customers can be retargeted through emails, future
offers, or a new marketing strategy based on data.
Let us now look at the phases of the Web Analytics lifecycle.
Web Analytics Lifecycle
Analytics is a continuously evolving process where the data and analysis define future strategies
and goals. This does not stop with one cycle.
KEY PERFORMANCE INDICATORS AND THEIR ROLE IN WEB ANALYTICS
Key Performance Indicators are quantifiable measurements, agreed upon beforehand, that
reflect the critical success factors of an organization. For Web Analytics to be carried in the right
direction, the key is to identify and map the right KPIs as per your business objectives. Here are
key steps to identify correct KPIs.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
Business Objectives Mapped To KPIs
Lead
Generation
Website
Commerce
Website
Content/
Media Website
Service
Website
Conversion Rates
Visit Value
Average Selling Price
Sourcewise
% drop offs
Sample KPIs by Industry
These are just a few KPIs, and the challenge is to not get lost in the options available. It’s crucial
to select the right ones. Otherwise, KPIs won’t do any good. For instance, with a lead generation
website, the main goal is to get new leads. In this case, “conversion rates,” “cost per lead,” “single
access ratio,” and “traffic concentration” KPIs may be good options. In comparison, a commerce
website, where the focus is on the purchase, may benefit from “visit value” and “average selling
price” KPIs.
Mapping too many KPIs might give you lots of data with no insights or recommended actions.
On the other hand, a selection of the right KPIs can result in actions that lead to continuous
improvements and met business and organizational objectives.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
A VALUE-DRIVEN APPROACH
Today, little correlation exists between Web Analytics spend and business benefit, a problem
exacerbated by the technology-heavy approach taken towards site measurement. As business
managers are increasingly pressured to optimize the value of their web investments, they will be
forced to adopt more flexible tool sets and sounder analytical methodologies.
A Web Analytics Demystified survey found that 25% of the companies who are tracking ROI from
Web Analytics report a zero or even a negative return on their investment. What’s worse is that
a full 75% of web analysts are working for companies where the return on investment from Web
Analytics is either not being tracked (54%) or is not widely known (21%).
The Value-Driven Approach helps assess the impact of the outcomes of the analysis and findings
driven by Web Analytics. If the outcomes are coupled with potential value in respect to benefits,
this can compel an action. In order to implement this approach, businesses must have a revenue
model in place to compute the potential value of driving change. Below is a proposed approach:
Value-Driven Analytics
Value is a direct function of Cost, Revenue, and Net Promotor Score*, which Web Analytics
focuses on to help
• Increase sales
• Increase campaign effectiveness
• Improve user experience
• Increase self-service and drive down costs
Key benefits of this approach include
• Enforcing action when coupled with monetary value
• Helping justify the investment on the Web Analytics activities and team
• Helping assess the contribution of Web Analytics towards an organization’s financial bottom line
• Enhanced reliability in data:
1. Increased trust in Web Analytics, if implemented value is close to recommended value
2. Confidence in the decision taken, if implemented value is close to targeted value
(target set by business themselves against their decisions)
* Net Promotor Score (NPS) - A gauge of customer satisfaction
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
TRENDS FOR 2012
The business of measuring web activity has come a long way since its modest early stages. It’s now
technologically advanced enough to provide a fine-grain picture of what’s going on at and around the
site. There is more competition in the market of Web Analytics providers, which includes not only large
players but also companies that specialize in custom solutions for online brands. The driving force
behind the development of Web Analytics as a business area has been the rise of online business.
2012 will be an eventful year for the Web Analytics industry. It will continue to try to catch up with an
expanding online ecosystem that endures a growing variety of businesses. Here are key trends to
watch.
1. It’s not just about the website anymore. We now also have mobile, social networks, and tablets
to name a few. While the web is a common thread in the marketing mix, today’s emerging channels
mean that we need to find a way to bridge the gap with this broad technology and be capable of
measuring the success across all these channels.
2. Web acumen is applied beyond site-level. Web Analytics will be spread across different data
sources and campaigns, which will be used to build multi-channel marketing initiatives, including
CRM, the Enterprise Data Warehouse, and customer databases, as well as marketing laboratory
initiatives (including A/B testing, multi-variate testing, and behavioral targeting) — all feeding data in
a forward approach.
3. Real-time data and analysis will require faster adaptation. Online companies want to react more
quickly to what is going on with their web strategy. It will be more important than ever to keep
adjusting to customer needs and improving to stay ahead of competition. More employees will be
dedicated to monitoring the effects of online activities and implementing changes before it’s too late.
That’s why real-time Web Analytics will play an increasingly important role and service providers will
have to develop solutions to make it more useful for users.
4. It’s time to move toward performance-based metrics. Web businesses will continue to put
pressure on Web Analytics providers to deliver not only more actionable metrics, but also metrics
that give a better view of performance. Web Analytics providers will continue to develop models to
deliver more than just response or engagement data.
5. Increased focus on predictive modeling and forecasting. In an era where digital marketing spend
is to the tunes of tens of millions (if not more), for many companies, CMO’s and other digital decision
makers are increasingly curious to understand what the future holds for them from an ROI
perspective. This has spurred an increased flurry of activity and investment around finding the
appropriate models to predict future performance and provide businesses with the ability to forecast
the impact of moving marketing dollars across various channels to achieve the optimum mix. Some
of the leading web analytics vendors are well into the game and on track to launch predictive
modeling tools, which aim to shield users from the statistical complexity that such an approach
would warrant.
When we get out of the “data puking” business and realize that we need to solve business problems, we
can finally embrace business-centric, structured approaches like using the Web Analytics Value-Driven
Approach. We are starting to look forward to testing and optimization as a way of life. Yes, it is not easy
to deal with, but then again, making a huge investment to benefit the bottom line never is.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
KEY CHALLENGES
There are some key themes that limit Web Analytics success.
1. Data is a commodity. Web Analytics is just the tool. The potential benefits of Web Analytics include
improved marketing effectiveness, elevated customer satisfaction, and new revenue opportunities.
The allure of these benefits has not escaped the masses as businesses across the globe increase
their reliance on the web and online channels. But many adopters of Web Analytics technologies
under-use their tools, fail to recognize ROI, or simply don’t apply the data.
2. A deep action abyss renders Web Analytics inert. Four years ago, Forrester research identified
three chasms that organizations must cross to mature their use of Web Analytics: the investment
chasm, the staffing chasm, and the action chasm. While the investment chasm has been minimized
by free Web Analytics tools introduced to the market, the staffing and action chasms have grown.
The human resources required for analyzing data and converting information into necessary
business actions are still severely lacking.
3. Industry growth is inhibited by increasingly complex challenges. The Web Analytics action
chasm is only one part of the story. As marketers gain maturity in their use of Web Analytics tools,
the challenges grow increasingly complex. For instance, many marketers tell us that they struggle
to uncover the insight within their Web Analytics data and keep pace with new measurement
challenges.
4. It’s hard to co-relate implemented value with recommended value. This is true especially when
a lot of changes are made at the same time or when organizations take longer to implement
suggested changes.
5. Privacy issues when using cookies pose a problem. Due to changes in the law concerning
cookies, it is now illegal to set most cookies on websites, which suggests almost all Web Analytics
can’t be used without breaking the law.
CONCLUSION
Web Analytics is all about understanding the current business state and continuously exploring new
avenues with tools, creativity, and best practices, including the use of
• Data and analytics processes to drive future decisions
• Small repetitive steps
• Continuous evolution instead of complete website relaunches
• Constant testing and experimentation
• Strategic KPIs for accountability
• Tactical KPIs as guidelines for single or local approaches
This cycle is one that shouldn’t be implemented once. It needs to be redefined and updated on a regular
basis to make sure the right results are reaped from Web Analytics solutions.
Growth will emerge from unexpected places as the value proposition of Web Analytics technology
wavers for sophisticated users and becomes more welcoming for new entrants. Ultimately, Web
Analytics will become part of a broader array of integrated services supporting marketers.
IDEA ENGINEERS
© Sapient Corporation 2012
POINT OF view
• Existing expertise will not be squandered. The future success of Web Analytics is dependent upon
experts who translate raw data into insight. Despite a necessary evolution toward automated action
based on data like targeting and testing, expert analysts are required to make correlations and bridge
the action chasm with logic.
• Democratization of data is impending. Organizations that succeed with Web Analytics build
data-driven strategies and create a corporate appetite for data. For some, data becomes an addictive
drug because it can demonstrate success, predict outcomes, and establish business cases for
new endeavors.
• Optimization technologies are the next paradigm. As maturity with Web Analytics grows,
sophisticated marketers will use data and customer intelligence to establish ecology for
marketing optimization. With Web Analytics data as the foundation, marketers will formulate
automated presentation methods that deliver relevant content and messaging to consumers in a
dynamic fashion.
REFERENCES:
1. Forrester Research “What Does The Web Analytics Industry Want To Be When It Grows Up?”
2. Forrester Research “The Forrester Wave™: Web Analytics, Q4 2011”
3. eConsultancy Report “Online Measurement and Strategy Report 2011”
4. Web Analytics Demystified / Next Stage Global Measuring the Immeasurable Visitor Engagement
ABOUT THE Authors
Deepak Jain is working as Manager Marketing Strategy & Analysis,
having five years of experience within interactive marketing, Web
Analytics, and campaign measurement. He is currently working for
Vodafone UK as a part of their Web Analytics team. Earlier, he was
part of the Experience Marketing team working with the Miami team
for clients such as Citibank, RBC, and Wal-Mart, and managed the
measurement team out of India.
Deepak Jain
Parmjeet Kaur is working as Manager Marketing Strategy & Analysis with experience in Web Analytics, campaign management, data
mining, and Adobe Omniture governance. She is an Adobe certified
professional with Omniture Implementation as well as Omniture Site
Catalyst. She has successfully defined and implemented processes
for client engagements in GDD model. She is currently leading the
Vodafone UK offshore engagement for their Web Analytics solution.
Parmjeet Kaur
IDEA ENGINEERS
© Sapient Corporation 2012