From Metrics to Mosaic: Digital Marketing & Measurement Model

                                                 
So you are a small business owner and you finally got your website up and you set up your Google Analytics account. However, after a week of collecting data you opened up your GA tools and emerged four hours later feeling overwhelmed and wondering, “Where do I start?!” One of the major pitfalls analyst fall into is that they get lost in all of the metrics. IT does not have to be this way. You too can turn a bunch of metrics into a mosaic. Avinash Kaushik presents a model to help every analyst turn their website into a work of art through his Digital Marketing & Measurement Model.

The Digital Marketing & Measurement Model consists of five basic steps: an analyst needs to identify the business objectives, goals of the objectives, the Key Performance Indicators (KPI), targets, and the valuable segments for analysis. This blog post will focus primarily on the third step, identifying KPIs, as this is where managers start relying on Ninjas and their nunchucks.

Steps 1 & 2: Identify the Business Objectives and Goals for Each Objective

Before you open your GA account, you need to stop and think about where you are going. It does not matter what road you travel if you don’t have a destination. Senior level executives will direct this conversation. Management will also decide what the goals will be to help the site or campaign get meet the business objectives. According to Kaushik this is the one time where it is a good thing to be DUMB, that is your objectives should be Doable Understandable, Manageable, and Beneficial. Your business objectives must reflect why you are doing what you are doing. Once the objectives are outlined then it is time to identify the goals for each objective.

Accomplishing your goals should take you one step closer to your objectives. This too can be tricky. For example, if you want to lose weight there are two strategies to take. One strategy would be just to diet and just make sure you burn more calories than you take in for a relatively short period of time. Minimal calorie intake would be one goal. Another strategy would be to simply start eliminating bad dietary habits one at a time over a lifetime. For example one could set the goal to stop eating carbs late at night or in front of the TV. Both goals will help you to lose weight. However, only one of these goals will most likely result in long term success. By engaging in a discussion with different stakeholders you will be able to determine effective and realistic business objectives and goals.

Step 3: Identify the Key Performance Indicators

This is where you get to bring out your weapon of choice as an action hero or ninja. Your job is to cut out the simple metrics and pull out the right KPI. When it comes to KPIs, you need more than just metrics. Metrics are just numbers – counts or ratios. Don’t get me wrong. Metrics are important. They provide some contextual information and serve as baseline data for your website or blog. In fact, Avinash suggests there are basic primitive metrics every analyst needs to become familiar with first on their website: visits, bounce rate, page views, pages/visits, average time on site % new visits and sources of traffic (Kaushik 2009). However, just knowing these numbers and working to increase them does not necessarily translate into profit or progress.

Key Performance Indictors (KPIs) are metrics. However, these metrics help you understand your business objectives (Kaushik 2009). Thinking of potential KPIs is not so difficult. Here are a few examples:

• Checkout Conversion Rate
• Order Conversion Rate
• Buyer Conversion Rate
• Checkout Initiation Rate
• Product Browse to Cart Add Ratio
• Category Browse to Cart Add Ratio
• Product Browse to Buy Ratios
• Shopping Cart Addition
• Percent of Visitors Using Search
• Search Yield Rate
• Customer Satisfaction Score

The difficult part is actually determining which KPI’s best represent your business objectives. As DA and analysts have matured it has become clear that not all KPI’s measure what we think it measures. For example, During the early stages most analysts obsessed about Conversion Rate Optimization. The idea was increased conversion = increased profit. This however, does not always prove true. In his blog post Case Study: Why you should Stop Optimizing for Conversion Rate Sharma, uses the following table to illustrate this point:

This company saw a 67% increase in conversion while experiencing a 33% decrease in product revenue. How could this happen!?! The average order value decreased. This seems simple enough but many businesses continue to make this mistake. A couple of months ago a guest speaker from a well-known ecommerce company described how they fell for this same exact mistake. They decided their goal was to increase profit by increasing sales. So they designed a promotion to help increase their sales. To do this they released a special BOGO promotion. As a result they increased sales but they also lost revenue over the next quarter because they cannibalized their sales. They ended up “shooting themselves in the foot” because they were using the wrong metric as their KPI.

To help his readers avoid this pitfall, Kaushik has created guidelines for determining the best KPI for a business.

The Eight Avinash Rules for Entering KPI Heaven:

1. Start simple, start direct, and please start with Outcomes! 

2. Leverage metrics that identify success for areas where you spend the largest efforts.
3. Wean your Marketers off the "one night stand" mentality, do pan session analysis. 

4. If you can't segment a Key Performance Indicator, you have picked the wrong one. 

5. Even "brand" and "site usage" can be measured, Loyalty rocks!
6. If your short list of KPI's don't include a couple that report customer voice directly then you will Never be as successful as you should be.
7. Using KPI's that can tie back to the "old world" and "traditional metrics" and help you bring people to the current age.
8. Not using Competitive Intelligence KPI's can be considered a crime against humanity!

Determining which KPIs to monitor and how to relay the information to your team members is where you, the analyst, gets to flex your muscles. 

Steps 4 and 5: Identify the Targets and Identify Segments for Analysis

These next steps also require engaging in discussions with other team members. The people eager to help you set your targets include management, clients, and even your finance guys. How are you going to know whether or not your KPIs measurements are reflecting positive or negative changes? You need to set targets in order to hold the campaign or website accountable.

The market researcher in me gets way excited when I hear the word segmentation. This is where you can learn about different groups within your customer base. However, again, as with many of the GA metrics you can go a million different directions. As it was critical to talk with your executives and other managers about your business objectives, goals, and targets it is also important to talk to them about what are the most important segments to focus on. Once you understand your primary customer you can start tailoring your website or campaign to meet their needs better. This will potentially result in higher customer acquisition and loyalty among other things.

The Mosaic

By following the Digital Marketing & Digital Measurement Model you have developed a structure that will allow you to jump into Google Analytics as an analyst. Because you already know what you are looking for you no longer feel overwhelmed by all the possibilities. Instead you have confidence and know exactly what information you are looking for. AS you continue to learn from your KPIs and make this process iterative you will find that your website that was once pretty good has evolved into a profitable work of art.

Social Psychology, Profiling Social Networks

When detectives begin investigating a crime they often lean on criminal profiling as a means of finding the perpetrator. “[Criminal profiling] is not a blueprint, as [the media] often suggests, against which people can be measured to see how they do or do not fit.  It's a list of suggested behaviors and traits derived from the specific behavior evident at a crime scene or series of crime scenes that helps to narrow down leads and diminish the potential pool of suspects.”1

Profiling has and is being developed in the FBI's Behavioral Science Unit (Investigative Support Unit). It is used by police departments all over the country -- especially those with officers trained at the National Academy -- as a tool in their crime-fighting arsenal.  The basic idea for a profile is to gather a body of data yielding common patterns so that investigators can develop a general description of an UNSUB (unknown suspect).  Profiling involves the psychology-trained expert using his or her knowledge in human behavior, motivation, and patterns of pathology to create a multidimensional report.

With the recent onslaught of Social Networks we are preparing for a scene rich with evidence to begin profiling potential target markets for commerce. This has been attempted using predictive analytics and user generated content from Social Networks but has often missed the mark. What I am referring to is the marriage of Big Data Market Research and Social media profile data. There is a proliferation of data that each of us unknowingly and knowingly share on social network sites. This data is littered with pieces of evidence that tell our story; who we are, what we like, what we dislike, what makes us tick and what turns us on. All pieces to a bigger puzzle that is us. This data can tell companies exactly what they need to know in order to sell their products or services. Highly focused targeting for advertisers, marketers, product development and research and development. This is not to say that the content that social network users are creating is of no value but that the true gold is below the surface.

A new field of social psychology could emerge. Social networks like Facebook sit on data that are the fabric of our lives. This data could be some of the richest information into what each of us really want or even need. If corporations could begin mining this rich data and couple it with the already rich market research data that is out there the social psychologist could begin profiling each of us. Providing valuable insights and directives. Below are just a few suggestions on how this new field may prove profitable.

1.    Keys to purchasing habits and prediction

           A profile is based on the idea that people tend to be guided by their   individual psychology and will inevitably leave idiosyncratic clues. These   clues will better serve advertising directives including but not limited to the best time, format, medium, location and content for these ads. As this       continues to get more accurate in its profiling specific and even custom advertising experiences could become the norm. Ever experience with a down to delivery.

2.    Advancement of new Advertising Methodologies

           For instance, product sponsorships based on individual’s social influence and profile categorization. Imagine getting paid in cash or free shawg because you fit a profile for a company and have an above average influence based on your social network interactions? Teenagers become walking billboards, and cheap ones at that. With far reaching grass roots styled effects in their ability to market, promote and sell products or services. No longer do companies have to lean on Hollywood’s elite to promote their lines. (Hollywood actually released a film not to many years ago all about this very thing. The Joneses)2

 

3.    New Business Models/Opportunities - Digital Grooming

           Surrounded by digital content, profiles, categorizations, social clout and influence new necessities with our digital selves will get put in the spotlight. Consultants will now work with you to build a better digital self. It won’t be enough to shave and shower in the mornings in the privacy of your own bathroom. You will need your digital self to be cleaned, trimmed and groomed in to not lose the promotion, get an interview or even keep your job. All this will bring on new ventures, backed by new technologies to make it easier and efficient to manage.3

These ideas aren’t new, nor are they far from completion. We are already beginning to see products that will begin to merge our interaction of our digital selves and our physical world. How we are viewed, classified and even profiled will continue to become integral. With it come new concerns for privacy, civil rights and even discrimination. All of which will need to be sorted out. Needs for fact checking will long pass by just being needed for politicians or journalists but your next-door neighbor and even child or parent, not to mention employer and employee. With each of these concerns more new opportunities for business models, laws and enforcing agencies with come as well. Proving Hollywood movies like The Joneses or even Minority Report closer to realities than not.

References:

--> http://www.trutv.com/library/crime/criminal_mind/forensics/forensic_psychology/10.html 

http://www.imdb.com/media/rm3528560384/tt1285309?ref_=tt_ov_i

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http://www.web-strategist.com/blog/2012/04/25/how-%E2%80%98social-profiling%E2%80%99-will-work-in-the-real-world/