Would We Be Better Off If We Could Measure Less?

The day is coming where users online will be tracked via their phone’s geo location so that a click on an ad will be tracked all the way to the in store visit. Revenue from the store visit will be attributed to paid search ads and ROAS will plummet. Investment in paid search will go up but only to a point.

I think more surety that every sale is being attributed to sales accurately will give more false confidence that the amount being invested is exactly the right amount. Marketers will be convinced further and will become more entrenched in treating paid search solely as a direct response medium – you put X amount of money in and you get Y out, both online and instore. Budgets will be under an even bigger microscope because there won’t be any question of how many people are being driven in store and online.

The full effect of advertising is unmeasurable. The intention, motivation and inception of attribution for the majority of traffic is is utterly unknowable. More tracking can give a false sense of understanding.

Advertising drives sales but it also has a less appreciated side effect. Bob Hoffman explains in this post that it also buys business insurance. This is the reason why Apple, even with no new offerings and lackluster advertising is still producing incredible returns. He explains, “the prevailing attitude among marketers that everything is immediately measurable completely ignores the insurance value. One of the reasons people continued to spend their money to purchase Apple products was not likely the result of advertising that they ran in that quarter. It was because of the advertising that Apple had run the previous 25 years. It bought them insurance.”

The long term effects from advertising don’t show up in the paid search report that you are running. More data won’t help. In fact, more data might lead some to believe that if it’s not in the data, it doesn’t exist.

“Where is the Life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?” T. S. Eliot

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Four Quadrants For A Fulfilling Life

4 Qudrents For A Fulfilling LIfe

This is my latest strategy for having a balanced and fulfilling life. I think it requires living in all four of the quadrants above. It comes down to how often, why, for whom and how much you create. I believe creation is a fundamental human need. The more you create the happier you are. What is not listed above are those things that are neither inner imperatives nor do they make you money. These are the things that should be avoided – channel surfing, Facebook, relentless entertainment. Some entertainment is inspiring but most isn’t. Unfortunately most people devote a large portion of their lives to being entertained instead of creating.

I espouse to Hugh McLeod’s Sex and Cash Theory where he explains that a person can balance the need to make a good living while still maintaining one’s credibility. You do this by having a day job that allows you to pursue other interests when you’re not at work. Diving head first into a your own start up is not necessary to feeling fulfilled, and might make you less so.

I think maintaining a day job is a great idea. You may not be having the time of your life, but I think that’s okay for four reasons.
First, everyday at work builds your employability equity. Experience is an asset you’ll never regret having.
Second, if you’re living in all four quadrants, your life won’t be solely based on your job.  I think it’s short sighted to assume your life’s purpose can be found solely from a company whose purpose is to make a profit. No matter how great your full time job is, it has proven time and again that financial incentives have a negative effect of performance and fulfillment. In the book Drive by Dan Pink, he says that punishment and reward based systems destroy creativity and that the secret to high performance isn’t rewards and punishments, but intrinsic drive. The drive to do things for their own sake. A place that pays you to be there will always take away that intrinsic drive, so don’t rely on it so much for your well being.
Third, keep in mind what Cal Newport explains in his great book, So Good They Can’t Ignore You – that passion in a career is more likely to happen after you become expert.
Fourth, even though our culture might make you feel otherwise, I think it’s okay to take an undemanding job to afford you more time to pursue other interests and activities in the quadrants three and four.

Hopefully time spent at work can also be devoted to being an intrapreneur – quadrant 3. Doing the things in quadrant 3 will build more employability equity and makes the 40 hours a week more fun and engaging. I think the leading cause of job dissatisfaction is when people devote their whole life to quadrant 1 but can’t get traction with quadrant 3 initiatives. As strange as it sounds, many people want to give more than the company they work for will allow. So instead of feeling burnt out, invest that energy into inner imperatives.

Inner imperatives provide the fuel for everything else. Bill Watterson, creator of Calvin & Hobbes, said in a commencement speech, “We need to do more than find diversions; we need to restore and expand ourselves. Our idea of relaxing is all too often to plop down in front of the television set and let its pandering idiocy liquefy our brains. Shutting off the thought process is not rejuvenating; the mind is like a car battery-it recharges by running.” Social media, nightly news and reality shows all take more than they give. To be fulfilled you need to learn how to relax through creating via quadrants 2 and 4. Ken Robinson, in his book The Element, explains that the most rejuvenated, inspired and excited states of being happen when we are experiencing Flow, or The Zone. It’s the magical place where your intrinsic talent is paired with the explosive power of passion – a much better place to be than rotting in front of the TV.

What I like about this framework is that when you live in all four quadrants you create what Steven Johnson, in his book Where Good Ideas Come From, calles the “personal intellectual environment”. This is where you have lots of different ideas, different backgrounds, different interests, jostling and bouncing off each other to create an environment that leads to innovation. Each quadrant supplies skills, ideas, insight, opportunity and motivation to the other quadrants. You’re balanced and motivated.

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The Day TV And The Internet Are One

Pontificating on what it will be like when TVs and the Internet are one in the same:

  • In the end TVs will just be a higher fidelity outlet for all your existing content. All content will live online and you’ll choose when, where and one which device to watch it. Pick up where you left off on your phone on the way to work where you left off last night on TV.
  • The antiquated way Nielson tracks viewership will finally be called out. Real time viewership stats of shows will be available for all to see. Sort all live content by most viewers.
  • Clickable credits. If you’re going to show me who made the show then make their name a link to other stuff they’ve made for me to discover.
  • Product placement will be a lot bigger source of advertising in shows. A character walks into the scene wearing a leather jacket and a subtle alert invites you to pause and buy that jacket from an online retailer.
  • Algorithmically generated content suggestions based on past shows viewed, what friends are viewing, what’s trending, etc., spread out across all content: YouTube, tv shows past and present, movies, paid content, etc.
  • What starts playing after the show is over? On TV it just keeps going while online the show stops. I think after a show ends it will keep running and you’ll be able to tell it what to show next: something from your queue, what’s trending, ect.
  • TV shows will host forums, ratings, commentary, and discussion around each episode after it airs. You can subscribe to commentary from writers about the shows you watch.
  • Real time RottenTomatoes-like meter of each show’s rating while it’s airing
  • You can sync your calendar with your content so that it can filter for content that fits your time frame. If you’ve got 10 minutes until the bus arrives your phone will automatically suggest all the relevant content that is under 10 minutes
  • TV shows created from data, not from pilots. Instead of studios shelling out tons of money to create a bunch of pilots where only a fraction will make it, shows will be created based on the big data of viewer trends
  • With so much content available individuals will be able to make money selling subscriptions to their curated content. What is a network but a curator of content?
  • More…

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The Curse And Blessing Of Direct Traffic

One reason to analyze traffic sources is to identify which sources have the most value and to generate ideas on how to get those high value sources to perform better. If you were to ask what is the value of $100 on AdWords, your analytics tool can give you an answer. Often paid search and other channels are combined along the path to purchase causing a multi channel funnel, but there is still a significant amount of sales that search is solely responsible for.

Not so with direct traffic because unlike other sources, it doesn’t work alone. Direct traffic is not really direct for two reasons. 1. The way all analytics tools work is that if they can’t identify the source, they will call the visit direct. 2. Even if it all really was direct – people typing the url in the browser bar, direct traffic is hard to analyze on it’s own because something else always has to cause it to happen. You don’t go typing in a URL in your browser without learning about that URL from somewhere else. You can never really know what initiated someone to come to the site directly. So direct isn’t really a source, it’s an action. A better label for direct would be unknown.

Direct being unknown is not necessarily a bad thing. Direct traffic should be used in conjunction with analyzing all other channels. All the work those other channels do will contribute to direct. This forces you to think of your site’s acquisition strategy in terms of an ecosystem rather than channels working in silos, independant of each other.

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How Important Is The Release Date?

Release it all at once or slowly over time? How much effort and money should be invested at the onset? How much buzz a new product needs at the start depends on a combination of how good it is and how long the product will be relevant. The longer you can stretch out the release the better for the customer and the creator.

According to the product adoption curve, the majority of people will wait for the feedback from the innovators and early adopters before deciding it’s worth their time. Money can carry it faster to the early and late majority, but it takes a lot of it. If the product is relevant for long enough, and you’re patient long enough, the product can carry itself into the consciousness of the majority.

It’s tempting to blurt out everything you have to say all at once. For the customer, participating in buzz is fun. Being the one to recommend something to others builds trust – both with their friends and the creator. What your audience wants from you is not just your product, but the ability to be the one to share it with others.

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Treat Different Site Visitors Differently

When I used to do sales I would beat myself up about getting rejected. Then I started to keep track of how many people I talked to who were actual decision makers and realized I was mostly getting rejections from people who weren’t the decision makers and couldn’t buy anyway. This made me feel better because I realized my conversion rate was much higher once I got in front of a decision maker. The same applies to websites.

A less than 2% conversion rate seems bad when you think about it; 98% of people don’t buy. But if you were to whittle down the people who were actually there to buy your conversion rate would be a lot higher.

Take a look at all the different reasons someone would come to your site. There are visitors there to check their order status, contact customer service, browse, compare prices, find a store locator or are not interested in buying at all and leave after one page view.

If you can measure all the actions on the site that infer a certain kind of customer cohort than you can build something like this:

Screen Shot 2013-08-23 at 3.11.46 PM

In this graph I’ve spit up all traffic into five segments:

  • Service – visitors checking order status or contacting customer service.
  • No Shot – visitors that show no interest in buying, visit <=1 Page. Who knows why they showed up we have no information on them to infer anything from.
  • Browsers – visitors reading blog posts, relase calendars, looking at
  • Buyers/Instore – choosing the pick up in store option, visiting the store locator, getting driving directions
  • Buyers/Online – behavior that matches that of the Visits With Conversion segment

With this new view in mind you can measure accurately how well your site is converting those shoppers who actually have an intent to purchase. And you can accurately measure the task completion rate of those other visitors there to go to customer service or shop offline. You can also segment these buckets by marketing channel to see how many qualified leads each channel is providing.

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Diagnosing A Paid Search Strategy

Paid Search strategies can vary widely. There is a different blend of direct response and branding that each company employs. How much does a company value educating new customers as opposed to getting sales from each click? How often are they testing new keywords to reach different and new target segments? How much are they willing to spend for the sale? What is the target ROAS and how willing are they to deviate from it?

These questions can be answered by looking at the amount of money a company invests at the different levels of Return On Ad Spend (or CPA). If you compare time periods you can see how paid search strategies change.

Screen Shot 2013-08-14 at 4.25.30 PM

In this example you can see that a focus on direct response was increased year over year as that sweet spot of ROAS from 1 to 4 was much more heavily invested in – budget was spread much less evenly across higher ROAS levels. There is always a balance between profit and volume the more evenly the cost is spread out the more evenly the company values both metrics

in 2012 there seems to be more experimentation going on as the amount invested that got 0 return was higher.  Interestingly, in 2013 as the amount of money invested on the > 21 ROAS was much higher. Maybe there were a few pet keywords that even though got low return were important from a branding or competitive perspective. Or impression share on those high ROAS keywords was tapped out and additional budget was given to the wrong keywords.

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Paid Search Competitive Analysis Report Template (excel download)

This template is a snapshot for a particular month. It doesn’t show trends or give you the context of growth/decline over time. You can pull the Auction Insights report out of AdWords from a campaign or adgroup and then plug in the top 10 competitors to get these results.

Paid Search Competitive Analysis

Click To Enlarge

Ideally the first bubble chart gives you insight into where you sit in relation to your competitor’s impression share, avg. position and top of page rate. How competitive are you with these other advertisers? If you’re similar size and position expect high costs and aggressive bidding.

The second bubble chart shows the relation of avg. position and top of page rate with the competitors you overlap with the most. The more bubbles of similar size, the more competitive the auction is.

The Top Of Page Rate column chart gives you an idea of how aggressive you are relative to the competition for that data you’re analyzing. Are the competitors that are ranking higher than you also winning out the most when you are in the same auction?

I copied over the colors from the bubble charts to the bar charts so that you can follow one competitor across all comparisons. This way it’s easy to see if a competitor with high overlap rate ranks higher than you when in the same auction.
Is ranking higher than one of your competitors important to you? With the Who Is Ranked Higher chart you can see how often that is happening and with the other column chart you can see how competitive they are overall.

Download the Paid Search Competitive Analysis Template (.xlsx)

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Ecommerce Blog Dashboard (Excel Download)

Many ecommerce sites have blogs as a means to drive traffic, help with SEO, drive new visits, engage with customers, make sales, increase credibility and more. All of the goals can fit into two silos: engagement and driving revenue to the site. The two depend on each other – the better the content the more potential people will click through to the site and purchase.<

I built a dashboard for measuring the success of these two silos on a monthly basis. Check it out:

Click to embiggen

Click to embiggen

Measuring engagement has multiple facets. How well does your content attract new visitors, get people to come back, bring in others via social sharing and just be all around worth reading? The top left column pulls in those metrics of measuring how engaging the content is by using comments, shares and likes as a proxy for quality. Likewise the first row of bar charts shows the count of visits, days since last visit and page depth – pulled from Google analytics, over the last 4 months. Seeing these trended out gives you an idea if your content is getting better or worse over time – same with the line social graphs in the bottom row.

Next, how well does the blog get people to buy from your site? The first step to driving a sale is to get people from the blog to the site, so the Visits to Website line graph and the Blog to Site CTR shows how many, and with what frequency people are clicking through. The middle chart on the middle row shows overall revenue and per visit value.

A dashboard is only as good as the actionable insights one can glean from it. This dashboard shows (the numbers are all made up mind you) that last month the content got better – people commented more, shared more and Liked more. The next step here would be to pull the All Pages report for the month and see what kind of content resonated so much, and then make more of it.
Despite less traffic overall the quality of traffic to the site increased as Per Visit Value increased – too bad not more people aren’t clicking through to the site, maybe more links to the site could help that. Were the links to the site product pages, category pages, the homepage?
More questions: Did the new visits this month convert? The count of visits from last month were higher, was there a theme of content that you stopped using this month? Anyway you can add onto the content that drove the spikes in visits from previous months? How does your cadence of posting affect the volume of traffic?

Download the Ecommerce Blog Dashboard in Excel.

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Making the Vaguest Marketing Objectives Measurable

Almost every marketing proposal and brief include one or more of the following meaningless goals: drive awareness and increase engagement.

Of course we want to drive awareness and/or increase engagement. What is marketing if not one or both of those things? The point of marketing proposals are to allow the thinkers on the team to collaborate and then give those ideas outlined to the doers on the team. Proposals, like most endeavors, are garbage in – garbage out. The more vague the objectives and strategy the more vague the results will be. So let’s how we can boil down “awareness” and “engagement” into unique actions that we can measure and get better results.

Objective #1 Drive Awareness
Awareness to who? Certainly not everyone. Moms with kids? Traveling businessmen? Baby Boomers? Teenager jocks? Go one step further and say “Drive Awareness to ________.” Then the doers can measure themselves against how well they are reaching that desired audience. Age and gender reporting are easily accessible in AdWords from the Google Display Network.
Also by using the myriad ways to overlapping contextual, interests one can measure the CPM and CTR of getting in front of the coveted demographic.Targeting new customers or return customers is also a consideration – how well can you reach past purchasers of product x who might have an affinity for the new product y? Remarketing lists can also be a useful tool to measure awareness. Getting the message in front of visitors who browsed certain categories or similar products can be counted as success. All of these tactics drive awareness and give you ways to measure how well that awareness was achieved.

Objective #2 Increase Engagement
Engagement is subjective and web analytics tools are inherently unable to measure the kind, positive or negative, of engagement and are left to only measure the degree of engagement. Measuring the degree of engagement is going to be unique to the experience of the site. Maybe it’s the amount of contest submissions, tweets, comments, video plays, likes, it all depends. There are a few standbys however: loyalty, recency, length of visit and depth of visit (all located under Audience > Behavior in Google Analytics. With all of these metrics see what the site average is and then use that as a baseline to achieve against.

So instead of being meaningless, an example objective on a marketing proposal could say:
“Drive awareness to our target 25 – 35 mothers with children who are trying to save time and increase the value of quality time spent with their families.”
Or
“Increase engagement by reaching more than X contest submissions while driving X new visits through user generated social shares.”

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