Web Analytics - Murder by Numbers - Part 1
by Jason OConnor
Want to know a methodology to learn the exact effectiveness
of every e-marketing initiative you conduct? ItŐs a method that
every company online should implement. ItŐs a must-have if youŐre
actively trying to leverage your web presence to increase your
One of the great aspects of the Internet and e-marketing is
its ability to give immediate results and feedback regarding all
kinds of online activities. This of course requires tracking.
Let us delve into the world of tracking. Part 1 of this two
part series will explain the basics of e-marketing tracking. Part
2 will provide a fool-proof method for website statistical acquisition.
If you rent some banner ad space at a website whose audience
is your target market, you can learn exactly how many people saw
your banner ad and how many clicked through to your site. You
can also determine how many people actually became a lead from
the banner ad and even see how many were converted into a sale.
If the numbers were low the first time around, you can create
a new banner ad and submit it again, then track those results.
You can keep tweaking ad infinitum until you discover the perfect
combination of design, copy and presentation that yields the best
results. This is one of the wonders of the Net. But youŐll need
a way to make sense of all the numbers. And there will be a lot
of numbers. Enter Web Analytics.
Here are the most important data points for an e-marketer:
- Cost for campaign
- Reach or total visits (in Netspeak, ÔeyeballsŐ)
- Unique visits
- Click-thru number
- Click-thru percentage
- Number of leads generated
- Cost per lead
- Lead conversion rate
- Lead to sales ratio
- Number of sales generated
In the banner ad example above, letŐs say the statistics for
a day are:
- The banner adŐs cost for the day = $500
- Total visits = 1000
- Unique visits = 800
- Click-thru number = 50
- Click-thru percentage = 5%
- Leads generated = 20
- Cost per lead = $25
- Lead conversion rate = 40%
- Lead to sales ratio = 10%
- Sales generated = 2
The daily, weekly or monthly visits to the site that houses
your banner ad will be the reach or visits to the site. This number
can be broken down to both total and unique visits. If there were
a 1000 visits to that web page in a day but 200 of those visits
were from the same people visiting twice in that day (and all
the rest came only once), then total visits is 1000 and unique
visits is 800. This is because if 200 people came to the site
twice that day, then 200 of the total visits for the day were
repeats which leaves 800 unique visitors (1000 Đ 200 = 800).
Continuing with the example, the number of people who view the
banner ad and actually click on it over to your site is the click-thru
number. The click-thru percentage is ascertained by dividing the
number of click-thrus by the number of page visits. For example,
if 50 people clicked-thru to your site from the banner, and there
were a total of 1000 banner views (because there were 1000 views
to that page that had the banner ad on it), then the equation
would be 50 divided by 1000, or 5%. (You could also use the unique
visits to calculate this percentage: 50/800 = 6.25%.)
Leads acquired is how many people actually filled out a form
on your site or called as a result of the banner ad. In other
words, the user saw the banner ad on another site, clicked the
banner thru to your site, and then actually gave you their information
via a web form or phone call.
Cost per lead is very important. The lower this is the better.
You calculate this by dividing the total cost by the number of
leads, in this case $500 divided by 20 leads, or $25 per lead.
The lead conversion rate is the percentage of new leads you
obtained from the visitors driven to your web page as a direct
result of the banner ad. Of course this page needs a call to action
in order to convert a visitor to a lead. A call to action is a
statement on the page that says ŇCall todayÓ and gives a phone
number or is a link that points someone to a web form.
If your banner ad cost $500 and you got 20 leads (leads acquired),
then your cost per lead for this banner ad campaign was $25.
If 2 people out of the 20 new leads actually bought your product
or service, then your lead to sales ratio is 1/10 or 10%.
Obviously, the whole point of all this is to increase the last
number, our final sales. By monitoring all these numbers continuously
and systematically, we can gain an almost omnipotent view of our
various e-marketing campaigns. We can then leverage that knowledge
to improve each initiative to yield the best results.
Part 2 of this two-part
series explains how to get all the initial web statistics
to plug into these formulas. It also describes a great method
for obtaining accurate click-thru numbers.
Good luck number crunching! The better you get at it, the more
sales youŐll create.
About the author: Jason OConnor is President of Oak Web Works
The synthesis of Web marketing, design, and technology Jason is
a Web development expert, e-strategist, and e-marketer who is
trying to affect the future of the Internet in a highly positive
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