As an example, one of my projects was to understand the contribution value of traffic from each of our traffic sources. The biggest hurdle to achieving this objective was the fact that we did not have any tracking to follow the user from the time it entered the experience to the time it left the experience. Depending on the size and scope of your web traffic, it could be a daunting task to collect that kind of data. However, if we tag each campaign appropriately, we can come fairly close to isolating the path. Of course the analytics software we employ will be crucial to achieving the goal (we were using Omniture and an in-house tracking solution to marry traffic and revenue data and build the user path).
Once we are able to follow the user through our site, we measured the revenue points in the path and aggregated to arrive at composite revenue/visit from a particular traffic source. Consumer centric tracking is one approach that may be useful (http://www.analyticsheaven.com/2010/04/tracking-make-it-customer-centric.html).
For instance; revenue/visit from content promotion was more dependent on user navigation and hence advertising revenue. However, search driven revenue/visit was driven more by user clicks to purchase and hence CPC revenue and/or Lead Gen revenue. We found wide variation, more than 100% between the low and high contribution values, among all our promotion vehicles. But, now we were able to employ targeting and relevant cross-sell/up-sell to grow revenue and contribution from each traffic source. Imagine the possibilities for your marketing ROI, if you were equipped with traffic source level contributions as you make decisions about where to promote, how much to spend, etc., on your campaigns. Listening to our customers and utilizing continuous feedback to update our content and products should help drive a favorable trend in traffic source contribution: http://www.analyticsheaven.com/2010/01/customer-is-always-right.html). This can be a competitive differentiator and a valuable tool in marketing portfolio planning.
2 comments:
This is a great article - thanks for posting it. It is essential to do some form of what you are suggesting, as one really does need to concentrate on what is working, and stop doing what isn't (i.e. to improve one's ROI).
We use an Inbound Marketing Automation solution to track our visitors and to feed the ones who have explored enough of our site to reach a "sales ready" score which gets them fed into our CRM system. We then track them through the CRM, assigning them their projected opportunity values, and when we do close the sale, our software automatically assigns the value of that sale back to the campaign which brought this visitor to our site. In other words, we really can arrive at the ROI of each campaign by doing this.
If you would like to know about about how it all works, we have described using ROI in 3 posts on our blog:
1) How to measure the ROI of your website as a whole
2) The 10 best free ROI calculators on the Web and
3), How to build your own ROI calculator so that you can measure the ROI of your SMM.
Here's the link: http://bit.ly/cEc0ln
Eric - thanks for your post and the link. Yes, I have been fond of ROI by traffic source for a while now and push for that in every forum. Very informative posts in your blog as well - relevant to my B2B clients, I might add!
In my previous B2C environments, I used to take this methodology a step further for true OIBDA margin assessment on a web page, category or the entire site; by capturing CPM/CPC, revenue share components on income side and accounting for personnel costs (from the time invested in developing the campaign to consummating a sale).
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