It’s been a while since I last published an installment of Analytics in Action, so today I thoughts I’d share an infographic I found from Unmetric on crafting a digital analytics plan. Yeah, I know, it’s too small to read, but click on the image and you can enlarge it.
Ok, so I know fitting digital analytics into a periodic table is a little of a stretch, but the infographic still has some value. Let’s take a look at the things I find valuable. At the end of today’s post, I hope you’ll learn the following:
- The importance of digital analytics for making your digital marketing successful.
- Some key metrics in monitoring your digital marketing efforts.
- Why vanity metrics don’t provide much value in monitoring digital marketing.
- Why you need to monitor metrics across the entire conversion funnel as part of your digital analytics plan.
The importance of a digital analytics plan
We’ve all heard the stories of businesses that never measure anything and become hugely successful. Well, that’s an outlier. Yet, far too many businesses fail to use metrics to guide decision-making. Even businesses that measure lots of things fail to understand how those metrics impact decision-making. Maybe they have too many metrics or maybe they don’t have the right ones. Maybe their metrics don’t reach decision-makers quickly. Or, maybe metrics measure where you’ve been without providing guidance to where you’re going.
George Forrest of iSix Sigma has this to say about metrics:
Metrics are used to drive improvements and help businesses focus their people and resources on what’s important. The range of metrics that companies can employ vary from those that are mandatory – for legal, safety or contractual purposes – to those that track increases in efficiency, reductions in complaints, greater profits and better savings. Overall, metrics should reflect and support the various strategies for all aspects of the organization, including finance, marketing, competition, standards, or customer requirements and expectations. Metrics indicate the priorities of the company and provide a window on performance, ethos and ambition.
Of course, his words apply equally well in the realm of digital analytics.
Key metrics
Crafting your digital analytics plan starts with understanding the key metrics of success and determining how to capture data on these metrics.
Everyone seems to have an opinion on what you should measure for digital marketing success. I’m a big fan of using KPIs and you can see my list of KPIs here. Occam’s Razor, by Avinash Kaushik, also agrees with the KPI notion and they’ve crafted a great image to convey the process of determining which KPIs are important for your organization.
Forbes provides a list of 10 key digital marketing metrics, however, it basically refers to websites and leaves out other digital marketing efforts like social networks and email marketing. Their list includes (most are available on Google Analytics, especially if you’re using conversion funnels):
- Total visits
- New sessions
- Acquisition source — ie. organic, paid, social, etc
- Bounce rate — the percentage of visitors who leave after only 1 page
- Total conversions
- Lead to close ratio (you’ll need internal data for this, Google won’t give it to you)
- Customer retention rate — the percentage of customers who stay over time (again, you’ll need internal tracking)
- Customer value — often called CLV (customer lifetime value). This number reflects how much customers spend, how much you spend to acquire and keep them, and how long they stay. CLV makes the most sense when you segregate customers by source or some other variable that makes it more useful. The key decision here is to determine how much to spend to acquire or keep customers with similar characteristics based on the CLV of the group.
- Cost per lead
- ROI – return on investment
Marketing Tech Blog has an interesting take on grouping it’s 14 key metrics into the following categories:
- Generation
- Conversion
- Revenue
One thing all the authors agree on is the low value of vanity metrics. If you look at Unmetric’s list of vanity metrics, you’ll find Fans and Followers, which have to be the lowest value of the metrics despite the bragging rights they confer. Other metrics, like mentions, retweets, and likes have a small value, as each acts to amplify your message to other social circles (friends of friends, for instance). They also act as a subtle endorsement of your brand and can act as a little proxy for your influence within a community, but, by and large, they don’t matter for much.
I’m not sure Marketing Tech hit on the most relevant groupings, but it brings up the next subject — metrics from the entire customer journey.
Measuring the customer journey
Ah, the customer journey.
That process from first awareness to purchase and beyond — repurchase, recommend, defend.
The holy grail at the end of the customer journey (from your perspective) is rabid fans who not only stand in line to buy your newest products but defend your brand when others talk trash and answer questions to help new users get the most from your products.
But, I digress.
First, we need to develop metrics to see how we’re doing with the basics: Awareness, Interest, Decision, Action.
Awareness
How do folks learn about your brand?
Where are folks talking about your brand? What are they saying?
And, how do you get a bigger piece of the conversation?
Here we talk about owned, earned, and paid media. Owned media is your website, your social networks, your email list and metrics like visits, open rates, and reach are the ones you’ll care about. Earned media comes through organic search (content marketing metrics such as keywords, ranking factors, etc), shares (on social networks and from your own blog), influencers (including traditional or online media) re-purposing your content through quotes, interviews, and other forms of media coverage. Paid media comes through online advertising (paid ad metrics such as CPC (cost per click), CTR (click-through rate), quality score, reach).
Interest
Interest is hard to determine, especially since customers might choose your brick and mortar stores to learn more about you or query friends or look for your brand through 3rd parties, like review sites. You won’t always know customers are interested unless they show up on your website.
Indications of interest on your website include bounce rate (which should go down if more visitors are interested in learning more about your brand). You can also look at return visits, which is a sign of loyalty. Google even provides some information on frequency and recency of visits for repeat visitors, which bear some thought.
Decision
A decision is internal, but there are indicators of buying decisions. Accessing a coupon or a page listing delivery options is a pretty good indication your buyer reached a decision. But then, so is shopping cart abandonment, which calls for a systematic investigation of why consumers abandoned items.
Action
If you’re like most firms, this is the one metric you DO measure — conversion.
What you might be missing is attribution for conversion. Many firms use a “last touch” approach to measuring conversion that only considers where the consumer was immediately before they converted rather than spreading attribution across the customer journey. You’ll make far better decisions empowered with analysis from the entire journey.
Periodic table of digital analytics
The periodic table of digital analytics includes a vast array of terms and potential metrics for monitoring your digital performance. Not all terms or metrics are valid in all contexts, although some are pretty universal.
So, what do I find valuable in the table of digital analytics?
- The breadth and depth of coverage suggest metrics you might not have considered.
- A recognition of the importance of content marketing to overall digital analytics performance. Content marketing is the new SEO, so it’s prominence is warranted.
- Integration of advertising metrics. After all, digital marketing is still advertising to a certain extent, so digital analytics should include consideration of these metrics.
- Placing vanity metrics and social networks at the bottom of the table. These are secondary considerations and don’t really deserve a place in the body of the table. Don’t plan around networks, use them to meet plan objectives.
- Incorporating the concept of benchmarking. Benchmarking is a key element of any analytics plan, but you don’t often hear it discussed in digital analytics.
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