To start of let’s be clear about what we mean by conversion optimisation. To be more precise what do we mean by conversion? To optimise effectively you need to optimise some defined outcome and it’s important to clear about what the desired outcome is. For example, if you have a site where people can either complete the transaction online or pick up the phone and call the call centre, which one of those outcomes do you want to optimise? It may not be possible to optimise both. If you optimise the site to increase the online bookings you may find that the process doesn’t work for those people who prefer to research online but transact over the phone. If you optimise the site to generate call centre volume, it may mean that you have to incur extra costs in the call centre to deal with the extra demand. So, clarity of purpose is an important ingredient in the conversion optimisation process.

The conversion process is not one process; it’s a series of mini-conversion processes. Each of these processes needs to be optimised. You need to chunk the problem into bits. What is right for you will depend on your site and what you are trying to achieve. Fairly generically, the main micro-processes are: Land, Browse/Search, Engage/Transact. Part of the analytical approach to conversion optimisation is to identify where it hurts most. Which part of the conversion process seems to be causing the most problems? However, this also has to be balanced against the “ability to execute”. Which parts of the website can you change or impact in which timescales? It may be that the checkout process is identified as requiring optimisation and tuning but it may be that it will take 3 months before you can get the development resource to make the changes. In the meantime you be able to change some other parts of the site more tactically.

In an ideal world it would be great it is was possible to make changes to all parts of the site with relative ease and to measure the changes to get to the optimal result. There are technologies and platforms out there that are making this easier to do but in many cases the reality is that real choices need to be made in terms of impact versus time to effect. In these cases my instinct is usually to start at the beginning and look at landing page optimisation. Landing page optimisation is something that increasingly is becoming easier to do and it’s an area where there is always the potential of a high impact.

For me one of the biggest challenges in digital marketing is getting someone to do something twice. A lot of people who visit a website only visit it once, they only look at one page, and they stay for less than a minute. If they buy or transact, they only do it once. So how do you get them to do it twice? Look at that second page? Stay for that second minute? Make that second visit? A lot of subsequent behaviour is determined by the user experience on the first page of the first visit. The first page of the first visit needs to generate the momentum that ultimately leads to a successful outcome.

The growth of testing and experiment systems such as those provided by brands such as Optimost and Offermatica have made page optimisation processes a lot easier. They enable some of the hurdles associated with enacting change to be overcome and provide a systematic way to understand how to improve con version. They are not the only tool in the toolbox and conversion optimisation is an area where a wide array of data and services can be used in a holistic way to understand and optimise the user experience. Good site analytics gives an insight into the effectiveness of the micro-conversion processes, surveys help you understand the level of satisfaction with the user experience and usability testing tells you (warts and all) what processes works, which ones don’t and why.

Having gone through the process of acquiring prospects and converting them into customers, do you want to go through the pain and cost of doing it all again? I thought not. Next time we’ll take a look at the process of managing your investments in acquisition and conversion through optimising your retention marketing processes.

Till then…

Having given it a bit of thought, there are certain, somewhat random, things that have struck me about the last year. First of all there is the vendor consolidation that everyone has been talking about for some while. For us in Europe the year started with Omniture acquiring Instadia, followed closely by Touch Clarity. Some commentators have started to refer to Omniture as Omnivore as their acquisition appetite stretched to Offermatica and then onto Visual Sciences. On the one hand I think that consolidation is a good thing as it can lead to the best technologies being brought together. I was able to meet some of the senior team at Omniture at their Summit in London this year and I was impressed by their vision for the future. Not just the fact that they had one but also what is was. The potential downside of acquisition and integration, particularly of similar but competing systems, can be disruption. I hope that customers don’t lose momentum at a time when many are being to really drive value from their historical investments in data.

Another thing that struck me was the growth in non-transactional analytics. As the majority of websites don’t sell things, it seemed like an area that needed some attention. I kicked off the year giving it some thought and then followed up with some further columns. The conclusion I came to was that you can’t successfully measure the effectiveness of non-transactional websites just by staring at reports from a web analytics system. You need a broader set of tools than that. Since then WebTrends have made some contribution to the challenge by launching Score which enables value to be assigned to particular events or behaviours. Perhaps 2007 has also been the year when “engagement” has become all the rage. For me it’s still probably a term looking for a definition but no doubt that debate will continue.

Looking back at the article I wrote this time last year, I see I was foolish to make a couple of predictions for 2007 about the market in the UK. I said that we would see greater use of targeting and optimisation technologies and that we would see a greater focus on retention marketing and as a result “the need to have various marketing technologies speak to one another and for data on customer activity to be shared”.

I think there has been a greater adoption of targeting and optimisation technologies here in the UK. Both Optimost and Offermatica established offices here before their acquisitions. But I don’t think there has been quite the growth and adoption that I might have expected. No doubt there is a lot of activity and organisations are started to develop and implement systematic testing programmes but many organisations I know see it as something perhaps for 2008.

However, I think that my second prediction was a bit better. From the work that we have been doing this year I have seen organisations trying to get their head around how they make sense out of all their data and how do they get to the position of having a single view of the effectiveness of their marketing activity. We are at least in the planning stages with organisations beginning to ask the right types of questions like “How do attribute sales to different channels in a more sophisticated way than I do at the moment?” or “How do I understand the impact of my offline marketing activity on my online performance and vice-versa?” This type of joined up thinking requires joined up data and if I am to make any predictions for 2008, one would be that we will see more organisations planning and implementing data integration strategies.

The last think that struck me about the year was how the market has continued to diversify and grow. It feels difficult sometimes to keep on top of all the different aspects of online marketing performance measurement and optimisation, There’s now a huge range of disciplines in this industry from testing and optimisation to social media measurement to customer experience feedback and so on. This diversification is a trend that I will think will continue as well in 2008 and the challenges for practitioners, agencies, consultancies and indeed the industry itself in the form of the WAA will be to keep pace with the rate of change. If I am to make one prediction for the year 2008, it would be that I don’t think it’s going to be a dull one!

Before I went I was already picking up the vibes that it was going to be bigger and broader than anything I had been to before and that certainly proved the case. I think that there were over 600 people there over the course of the conference. OK, that may not be huge compared to some of the other US internet conferences you might attend but for the ugly duckling of online marketing I think it shows just how far the web analytics industry has come.

One of the challenges at these conferences now is deciding what to see. I probably spent as much time looking at the programme, trying to work out which session to see as I did wondering round the hotel trying to find the actual session. At various times during the conference there were six tracks running simultaneously ranging from topics such as behavioural targeting and testing through to public sector success, from search analytics to email metrics and from web 2.0 measurement to statistical analysis. A very eclectic mix of subject matter!

As I suspected, this industry is not only growing but diversifying. Some of the more interesting conversations I had over in DC were not with web analytics vendors talking about the latest features of their particular software but were with smaller companies tackling a particular problem in a different way. For example, new approaches to gathering and analysing customer feedback data through text mining or a methodology for media planning optimisation using predictive analytics.

Time and space doesn’t allow me to give a blow by blow account of what I saw and learnt at this conference and it’s already been documented in other columns and blogs. What I wanted to do is just share some of the key things I took out from the event. So for me, here are some of my highlights:

• Jim Sterne’s key note speech. I’ve heard Jim speak many times and I’m always impressed. This time round he challenged us to “think differently”. Getting us to “think” full stop I think is often enough of a challenge but Jim’s presentation also reminded me that as an analyst you can’t realise strategic value unless you also deliver tactical benefit.
• Ronny Kohavi from Microsoft’s presentation on controlled experiments on the web. Everyone’s getting excited about multi-variate testing but Ronny showed what immense benefit you can get from running simple tests on a continuous basis. Also when evaluating those tests don’t look just at the short term gain but also look to understand the longer term value that you will gain
• Meeting a bunch of people for the first time. You read people’s blogs, you see their posts on the email groups but there’s no substitute for meeting them in flesh and discussing their ideas face to face.

So what next? As you read this I’m probably on my way back from the first Emetrics Summit in Sweden. This is continued sign of the growth and development of this industry, in particular outside of the US. Sure, the size and scope will be different to what I experienced in Washington DC but I expect the enthusiasm, inertest and lobby bar conversations to be very similar!

Growth in the web analytics industry in Europe manifests itself in many ways. Web Analytics Wednesdays are being held across Europe with strong levels of attendances. At the last event in Scandinavia, I’m told that they had to turn people away because the room couldn’t hold enough people. For the second year there is an Emetrics Summit in Germany and it moves to a 2 day format. There is also talk of other locations in the future. The spread of interest and expertise across Europe was also demonstrated at the London EMetrics Summit. I met delegates from Belgium, Holland, Finland, Sweden, Germany and Estonia all coming together to learn, share and network.

I also met delegates for whom this was their second or third attendance at the event. Some of them are consultants and agencies but there were also some practitioners for on a repeat visit. I think this also is evidence of some maturity of the market with people who are developing a career in the industry.

So what were people talking about?

Well, I think this year there was a greater variety of content than before, which I know was intentional. There were a number of presentations where organisations were describing the journey they had been on, the challenges they had encountered, the mistakes they had made and the learnings they had taken from them. These are useful sessions for people who are early on in the experience with the field of web analytics as it gives them a roadmap for their own development.

It was good to see examples of more advanced applications of web analytics being presented as well. Last year in my round up of the 2006 summit I said:

“One frustration is a lack of any evidence that companies are engaging in systematic testing. The challenge here in Europe is one of scale. Internal or external costs of running testing programs are probably too high, except for the very largest organizations. Hopefully, the technology costs will come down enough to enable more companies to use this type of analytics as part of the way they do business in the future.”

This year there were two contrasting presentations from client organisations based on the theme of testing. Skype presented their experience of running A/B tests on key pages on their site using Offermatica and Boden, a clothing retailer, presented their experiences of testing which was using in-house methods, splitting the traffic themselves and measuring the effects using their web analytics tool. Two different operational approaches but the encouraging thing was that both companies were able to report significant increases in conversions through their testing programmes which helps with the business case for testing going forward. I’m sure this year that we will see a much greater adoption of systematic testing programmes.

Another theme that came through was behavioural targeting. There’s been some noise about this in the UK this year with Omniture’s acquisition of Touch Clarity and one of the UK’s leading banks, Lloyds TSB, presented a case study based on their deployment of that technology. Again, Lloyds TSB reported that the additional revenue they are generating from behavioural targeting is several times the investment in the programme. The more the message gets out there that the investments in web analytics and associated technologies can generate positive and significant returns, the better!

I always say to people that building an online marketing analysis and measurement capability is a journey and not an event. You don’t, one day, suddenly start “doing web analytics”, you build up a capability that develops over time. I describe that journey in three stages.

1. Building a performance tracking capability
This is the process of getting the right numbers right, counting the things that count, developing KPIs, distributing key reports that tell you how you doing and whether you are meeting your goals or not.

2. Process analysis and optimisation
At this stage, organisations are using their measurement systems to understand and optimise key business processes, such as acquisition and conversion. They are using additional tools such as A/B and multivariate testing. They are thinking more strategically about site design, developing key customer journeys and segmenting their visitor base.

3. User centricity
In the final stage the focus of the organisation shifts from the site to the user or customer. Retention as a process becomes more important and as a result site behavioural data needs to be integrated with other data sources and other marketing technologies. Metrics for customer loyalty and lifetime value become KPIs. The online channel is an integrated part of the multi-channel customer strategy.

Here in the UK, a lot of companies are still in the first stage. Many organisations that we speak to and work with are in the process of more clearly defining online goals and objectives and putting in place the metrics and systems to measure them. For large, complex and global organisations this is a process that can take months. Many companies are upgrading their web analytics systems to give them the sound tracking capabilities that they need to and to give them a foundation for the next stage of growth.

That growth will come from ironing out the inefficiencies in their marketing processes and working smarter. This is the second stage of the journey and my perspective is that this is where the US market is at the moment. Investments have been made in systems and people and those resources are being put to work. It’s been a strong year in the US for marketing technologies such as behavioural targeting and multi-variate testing.

My view is that in 2007 we will start to see adoption of these types of capabilities by more forward thinking companies in the UK. Obviously there are already many European companies who are already pushing the envelope when it comes to using data, insights and technology to make significant improvements to their online marketing processes but they are relatively small in number. I think that in the UK in 2007 we will see more evidence of more companies looking to do the same. US vendors in that space are already looking to these shores.

I think that in 2007 we will also see more focus on retention as a marketing process with organisations looking to understand and manage concepts like customer loyalty and what that means in today’s multi-channel world. This will result in more focus on “data interoperability” i.e. the need to have various marketing technologies speak to one another and for data on customer activity to be shared. 2007 could be the year for many organisations when the world of online marketing emerges from its silo and takes up its role as a vital component of the total customer marketing mix.

Here’s what he had to say…

Brian, how would you assess the impact that Google Analytics has had on the market here in the UK and the rest of Europe as well?

The biggest change has been the huge growth in adoption. Web analytics has gone from a relatively small niche industry to something that is now almost integral with online marketing. The analytics industry is now at least 10 times bigger today than it was a year ago. What’s encouraging for my team is that the growth in adoption matches that seen in North America. Having been in the industry for many years, it really is fantastic to see how much benefit companies are getting from understanding more about web analytics.

Do you see any differences between the various markets in Europe that you operate in?

Measuring success is a key part of search engine marketing and search in general and this is the case in all European markets. As you can imagine there are always differences between markets but what is exciting is that across the board growth is strong. It shows there is great demand for such products and we will continue to work hard to analyse individual market requirements.

How do you address the data privacy issues that have been raised about Google Analytics? Do you find that it is a barrier to adoption by some potential users or in particular markets?

As you know, Google takes user privacy extremely seriously and it’s worth setting out how we approach the issue. At Google we build privacy protections into our products from the ground up, and none of our products use any personal data unless that use is fully disclosed in a privacy policy.

We always ask people to actively opt-in to services that use sensitive data, we allow people to use most of our services anonymously, and we even tell them how they can disable our cookies that they have been sent. Moreover, we think it’s important to be clear about what our position is, so we write our privacy policies in clear, simple language so that users can easily understand them – they are not the usual legal jargon.

Of course, for advertisers we also wish to provide accountability and transparency for our advertiser solutions (Adwords, Adsense etc). Hence Google Analytics is a trust building tool. Google will never do anything to harm that trust relationship as that would severely damage our business.

One of the latest announcements has been the entry of Google into the testing market through the launch of Google Website Optimizer. What was the rationale for that development?

Google Analytics is a great tool for web site owners to understand how visitors interact with their web site. It tells you what has happened, but it cannot tell you what to do next. That requires intelligent people to analyse and interpret the data then test for improvements. The WSO tool is the testing platform to do this - completing the loop of Measure, Analyse, Act.

How do you see the web analytics landscape developing over the next couple of years? What are some of the big issues that need to be addressed?

Although analytics is becoming mainstream for pro-active online marketers, there are still companies that have not yet really touched the potential online medium for marketing and how it can radically improve their return on investment. Part of our work is to show the opportunities that online marketing can offer. It wouldn’t be right to pick out one sector or another as there are opportunities for companies across them all to better reach their customers. Analytics is a crucial part of this equation and it’s a fantastic moment for the industry as we are seeing companies understanding better how their customers interact with them, which is good for us all.

With such huge adoption numbers, I feel training and education is the next opportunity for development. The Web Analytics Association is making great progress in that regard and I look forward to more education and training initiatives in the future. I also believe the industry’s terminology will simplify along with the products in terms of setup and User Interface. Once this happens we will see the integration of web analytics data into the heart of organisations. No longer a separate tool for the web, web analytics data will be a part of every day business intelligence metrics.

How will Google be addressing those issues?

We are always keen to do what we can to work with marketers to make tools useful to them – that’s why we value feedback from our users. We will continue to develop innovative ways to help people and we’re currently working on adding a GA course in addition to the regular Google University series that runs at conferences and exhibitions, such as Search Engine Strategies. And that’s not all - as you know, we just announced the new Website Optimizer multivariate testing platform and that Google Checkout now works with Google Analytics.

Without giving specifics, I think there are other integrations that make sense for Google Analytics, but you’ll have to stay tuned to hear what those are. We have hired some of the best minds in the industry and have partnered with many of the top analysis companies to provide professional services.

Finally, what keeps you busy in your spare time – assuming that Google lets you have any?

Well I still get chance to go down to the gym, though my judo black belt seems to be a long way away. Golf is what I am currently using to relax me, though it is strangely addictive!

Thanks Brian.

Having done my bit, I was able to take in the rest of the conference for a couple of days. It was difficult to decide which session to attend given the breadth of choice. Since I’m more into analysis than the technicalities of SEO, I headed over to sessions on the Stats and Research Track to see what the state of play is in the search market and what the latest thinking is on the way that people actually use search engines.

After listening to presentations from companies such as Comscore, Nielsen NetRatings and Hitwise, the dominance of Google in the search market was evident. Various statistics were thrown about in the session but they all pointed to the clear position Google has as market leader. Not only do more people use Google but they also use it more often, something we used to call the “double whammy” effect in consumer packaged goods marketing.

However, the Hitwise data also showed that there are some demographic differences between users of the various search engines:

• Yahoo! Users tend to be slightly younger
• MSN users tend to be slightly older
• Google users tend to be slightly more affluent

These differences also can lead to different types of sites being searched for on each of the main engines. MSN sends relatively more of its traffic to Business and Finance sites than the other two, whereas Google sends more of its traffic to Education sites than the others. So, there are differences between the users of these different engines and where there are differences, there are opportunities.

The presentations also highlighted the complexity of user behaviour, particularly looking beyond the initial visit. A lot of search campaign response evaluation is based upon a direct response model, ie a click-through resulting in a conversion. A case study from Comscore on the US travel market showed that 80% of all transactions occur after the first clickthrough visit. In other words, only 20% of people convert on the initial search visit and they are likely to come back later to complete the transaction, predominantly using a direct entry approach like typing in the URL or using a bookmark. So, the argument is that in some markets like travel and other high-consideration products, analysis based purely on a direct response model is underestimating the true effect of search campaigns.

A great session I attended was on landing page optimisation. This deal with subjects such as A/B and multivariate testing. This is a huge growth area in the US at the moment and given some of the case study results; it’s easy to see why. Speakers from vendors and their clients were pointing to increases in conversions of 60% based upon the optimisation of a single landing page, such as the home page. Obviously these sorts of gains are not sustainable over the longer term but it does show that there is a lot of low hanging fruit to be picked from engaging in a systematic program of landing page optimisation.

One of the interesting things to emerge from the presentations was that in some cases the best landing page might be different depending where the searcher came from. The best type of copy, graphics or call to action could be different depending on whether it was a referral from Google or from MSN. For me, this tied in with the point about different search engines having different user profiles and this is obviously impacts on their behaviour when they reach a site. So, it’s important to differentiate between where the searchers are coming from and possibly treat them differently.

So, what were my key aways from the sessions I attended at the conference?

• Search is maturing and Google is dominant, but that doesn’t mean that you don’t need to pay attention to the other engines.
• The different engines have different profiles and this will result in different user behaviour on your site.
• So, it’s important to treat the visitors from the different engines as different segments. Understand their behaviour and develop your campaigns appropriately.
• Different landing pages for traffic from different search engines may be the way to go.
• Landing page optimisation and testing is definitely the way to go.
• Campaign analysis based on direct response may be underestimating the true value of your search marketing activity. A longer term perspective might be needed. Easy to say but harder to do. One way is to think about where someone came from the first time they visited your site before they converted rather than the last which is often the case.

Till next time…