Every CMO’s monthly schedule now includes the requisite meeting with the digital team to review last month’s brand Web site dashboard. Indeed, it would be a short-lived tenure for any CMO who doesn’t know what is going on with their own Web site. But let’s be honest, how informative are these meetings and what are we really learning? All too often, marketers seem to be swimming in data but often come up short on insights. Yet, it doesn’t have to be that way.
Death by a thousand paper cuts
Everyone understands the importance of performance reporting for their Web site–it is the center of many brands’ marketing efforts and is allocated an ever-increasing budget. But, the metrics tracked are often one-dimensional and provide very little insight into the future success of the enterprise.
For non-ecommerce Web sites, we often see the same uninformative metrics reported on again and again:
* Unique visitors
* Page views
* Bounce rates
* Time on site
* Source of traffic
* High value activities (lead submission, store locator, product configuration)
* And, occasionally an engagement score (simple to complex)
And, we often see these measures compared week over week, month over month and year over year–not very exiting or insightful. While these measures do have some importance they don’t, by themselves, tell us much that is helpful. Do these measures tell us if we will hit our sales objectives next quarter? Do they tell us if we are on track to successfully deliver our next product launch? Can they tell us if our media plan is delivering effective reach and frequency?
If your monthly scorecard can’t answer these questions then something critical is missing. Perhaps it is time to get a new scorecard populated with more complex measures.
The value of complex measures such as a predictive ROI
At a recent trip to the doctor I was told that my HDL was 62. My first question was “Is that good?” Metrics without context provide no real value. In order for your scorecard to provide impactful measures, it needs to provide two yardsticks:
1. A relationship to success
2. Specific goals or expectations.
1. Relationship to Success
You need to start by determining what activities on your site are highly correlated with offline sales. This is another instance where the ROI modeling discussed in previous posts continues to pay dividends (//www.fastcompany.com/1608700/the-time-is-now-for-brand-building-and-upper-funnel-roi). A modern ROI model should value individual Web activities that are closely tied with sales and attribute a success value for each activity. Even though your ROI model is a measurement model and, therefore, based on historic data, it uses the historic relationships it uncovers to provide real-time reports on site and media performance. The integration of ROI-generated values into reporting ties current performance with your overall goals.
Now let’s say you are succeeding in driving more traffic. Is more traffic good? Are you driving the right consumers to your site? Another function of your ROI values is to move away from such general measures. The inclusion of advanced metrics helps ground your progress report in sales, showcase the quality of traffic and determine spots in the funnel where consumers are “lost.”
2. Specific Goals or Expectations
Perhaps the most important yardstick is where you are compared to expectations. After all, don’t company stocks rise and fall based on performance against expectations? Likewise, your Web site performance should be judged against expectations. And not arbitrary Web site centric expectations like a 5% improvement in visits against last quarter, but concrete sales based expectations. Once you implement ROI-based high value activity tracking, it is simple algebra to utilize the activity’s relationship with sales to determine benchmarks.
From these two additions to your scorecard (ROI-based tracking and benchmarking), you can begin to transform your scorecard from a set of numbers to a set of insights that include:
* What effect do your marketing activities have on key site activities?
* How far into the future does your Web site predict sales activity or changes in upper funnel brand measures?
* How can you facilitate optimization of current and future marketing activities utilizing your brand site scorecard?
Adding performance benchmarks also fosters a common interpretation of your brand site metrics–either we hit our objectives or we didn’t. When relying too heavily on simple measures – such as unique visitors or bounce rates – the same set of metrics can be viewed as a success by one group and failure by another. Needless to say this isn’t productive or helpful.
It quickly becomes clear that in order to get the most out of your brand Web site metrics, you need to have an ROI model in place that includes Web site activity. I have outlined the predictive modeling process many other posts (//www.fastcompany.com/topic/Steve+Kerho) and many of the same tools are used in measurement and ROI calculations.
Generally, predictive modeling utilizes some form of regression modeling. Depending on what you are trying to measure, it may take a linear or nonlinear form. We are going to touch on a couple of the tools that will help you develop a best-in-class ROI model.
The first step in the ROI modeling process is to always determine what data you have, what data you want, and what data you need:
Data You Need: (The is cost of entry)
*Sales – Ensure that the sales data provided is discrete enough for your needs (often weekly DMA level or finer)
*Media – Media data at the finest level available, at least DMA. We can always aggregate to a higher level if need be
*Web site Data – Interactive data can provide great measures of what to expect for your brand in the future
*Pricing – Pricing information specific to the level at which you are modeling (brand / model)
*Promotion – Data that includes in store and price cut information specific to the level at which you are modeling (brand / model)
*Industry – Industry sales levels or macro economic factors that may impact the baseline level of sales for your brand
Data You Want: (Nice to have but not necessary)
*External Interest Data – Measures of overall interest or brand perception that shape the outlook for your brand
*Social Media Data – Measures of level and tone of the conversation in the social space
*Industry / Economic – The overall state of the economy has an undeniable impact on most brands’ sales
Once you have the appropriate data in place, you can begin building your ROI model. It all starts with the basic form of the model:
Sales = Industry / Econ + Media + Pricing + External Interest + Web site Data
While this basic form seems overly simplistic, the actual incarnation will be rather complex. Issues we have previously discussed like lagged effects, decays, diminishing returns and saturation points all come into play. The key aspect for our discussion is the inclusion of Web data. With the influx of Web data we can transform static historic measurement models into responsive ongoing measurement models and this is key!
Since we know what activities site visitors are performing, we can use our modeled relationships to understand how this impacts sales (both short term and long term). Rather than relying only on passive econometric trends and company instituted factors like media spend and pricing, we are able to include what consumers are actually doing. This provides much tighter measures that are able to adapt to changing levels of consumer behavior.
It is also useful to develop a predictive model that will estimate your levels of Web site visits based upon external trends and media levels. A full discussion of predictive modeling can be found in earlier posts. This helps everyone to understand and quantify the causal relationships between offline media tactics and high-value brand Web site actions.
The combination of an activity Web based ROI model and a visit predictive model provide the most value to your business and transform your weekly Web site metric scorecard into a discussion of media success, campaign performance and future sales success.
Putting insights into action
My team developed a system of models that included an ROI model, a Web site conversion model and a Web traffic forecasting model that we utilized for a new product launch brand site scorecard. During the pre-launch period, our weekly scorecards included not only a discussion of the levels of Web activity but goals and targets that should be achieved for a successful launch, the media plans and the overall success of the prelaunch strategy in driving interest.
By widely distributing and frequently discussing our scorecard of predictive measures the organization was well prepared to make quick changes to the campaign while it was still live to improve performance. The hallmark of a good scorecard is how often it is the driver for a meaningful changes in the campaign for items like creative messages, SEM keyword bid strategy and dropping poor performing display media placements.
The updated monthly scorecard
Many of the measures that were mentioned before are key ingredients to answering these questions–but we need go further. Some examples of the additional measures that should be added to the monthly scorecard include:
* ROI Valued Activities
o Discussed Above
o Discussed Above
o There may be a user path that we never considered that could become a starting point of site optimization
o Being careful to truly definine what constitutes a user being engaged prior to site launch is key
o Time spent on site and average number of page views is not enough. This definition could mean that the user couldn’t find what they were looking for, not that they were engaged
* Competitive Site Performance Data
o Not only do you need to understand where your site stands on its own, but also where your site stands relative to your competitors in the category
Beyond these measures, every scorecard should have a summary page of insights. A short and insightful description of what the numbers mean. This is by far the most important aspect of the scorecard. Some examples of key insights:
“The incremental broadcast plan did not have the desired short-term impact. Even though 600 incremental TRPs were run in the previous two months, there was no relevant change in qualified site traffic. Need to study what went wrong.”
“We are tracking well against our future product launch. Looking at our lead and handraiser volume as an indication of future demand, we are on track for our sales goal during the first quarter after launch and we should consider building extra inventory.”
“Our new geo-targeted online campaign is successful in increasing brand opinion. Those exposed to the campaign increased “excellent opinion” by 20%. This campaign should be rolled out to other markets as soon as possible.”
“We should pull back media spending. It looks like overall demand for products in our segment will decline significantly in the next months.”
These insights are key because this is your chance to tell the story as well to answer the “why’s” as opposed to simply pointing out the spikes and declines in performance. These brief comments also provide the opportunity to provide recommendations to improve performance and outlook based on the results.
How to make the monthly scorecard meeting more productive
The first step to make this meeting more productive is to incorporate the complex, predictive measures we spoke of above. The next step is to integrate this meeting into a broader review of last month’s marketing performance. The meeting should include key stakeholders from Sales, PR, Strategy, Media, Digital, Promotions, etc.
The discussion should focus more on what your Web site can tell you about your business and its future success and less about page views or bounce rates. There should be disagreements, heated discussions and the occasional Ode to Joy about what it all means and, more importantly, what are we going to do about. Your Web site scorecard should be a treasure trove of insights that drive critical business decisions. If your scorecard and this meeting only serve to provide a rearview mirror of one dimensional measures, then it is time to stop these activities all together, simply because they are accomplishing little of value.
Steve Kerho is the SVP, Analytics, Marketing Optimization at Organic (www.organic.com).