Wednesday, February 13, 2013

“Show me the Money!” - Making Your ROI on Analytics

"Right now, the [Web analytics] industry places far too much value on the measurement side of our work, especially compared to the output side," says Evan LaPointe in an intriguing post at the Atlanta Analytics blog. Measurement, he argues, "probably accounts for just 5-10% of the total value of analytics."

Evan then goes on to explain what Web analytics really is. Essentially, web analytics is the answering of these basic questions, “not individually, but holistically:”[1]
    1.    Who is coming to my web site?
    2.    What are they doing (or better, what are they trying to do)?
    3.    What is the gap between what they are doing and the ideal? (and do we mean ideal for the business or the customer? good question!)
    4.    What are some concrete ways we can close the gaps?
    5.    How can we get more of these people?
Not a far cry from questions any business finance department is asking; what is the company worth? Are they going to grow?, What does the market think? and How does that compare with its worth?. The point Evan is trying to make is that Web Analytics is about making the company as a whole better and that the Web Analyst is positioned to most effectively do that by being the analyst and not the specialist.

If you ask the question “what’s the best next step?” IT will give you and IT answer, marketing a Marketing answer and so on. The web analysts answer should be subjective. Evan even goes as far to suggest that good analytics when done correctly doesn’t mean that the website is better. You can't be afraid to embarrass your management. The really great web analyst makes the company better by making recommendations through “un-tinted glasses”  on the overall process efficiency and how well the company delivers on its goals. A true contribution to profitability, or ROI.

Web analytics must “generate added value through the losses that it identifies and the opportunities that it creates...Online measurements should allow companies to update how and to what extent online investments form part of the company’s overall development.”[2]

Here is where context can make a difference. It isn’t good enough to simply collect data with your web analytics tools[3]. You need to understand that data in context to the business questions, goals, outside influences etc. It is only when you slice and dice the data that context of other data matters. The ROI of getting the right story is monumental.

So don’t simply collect data. Get an ROI from your efforts, empower your web analyst to be hated by all but loved by all. Your web analyst needs to use the data as the hard evidence for decisions in the right context. Telling the right story and positioning the company in the right direction. That’s where the money is and that is where the ROI is played out. Now go out and “Show me the MONEY!"



  1. I think in IT we are provided with a lot of different ways of analyzing data. Analyzing
    the analysis is the challenge.
    I enjoyed your post.

  2. Very true! Web analysts play a crucial role and their role is vital to inform the marketing management which direction they need to "steer the ship" and enable businesses to develop their competitive strategy.

    1. Thanks Luke!I agree with you and think there are a lot of departments that WA's need to be communicating with to ensure the ship is directed in the right direction!

  3. That is definitely true, Joel. Collecting data for the sake of collecting it is not being productive. It is when you can relate it to your current situation and use it to further better the services or strategies that you draw out its worth.

    Darryl Tay