Internet & TV - the inevitable synergies

As we see more and more user adoption of online videos and increasing TV viewership, I wanted to share some thoughts on possible synergies and trends in online and TV convergence. First let’s consider some facts:

1. Time-shifted TV viewing and online video viewing continued to grow in 2009 (according to Nielsen)
2. TV will become more social
3. Internet enabled devices, including Internet Enable Television sets (IETVs), will double by 2013 (according to Morgan Stanley), implying a more anytime/anywhere content consumption
4. Paid video content will make up 75% of US online video market (rest 25% will be ad supported)
5. Social ad spending approaches 50% of total online ad spend

What does this all mean for TV programming and online content? While internet continues to evolve in technology, engagement, user preferences, etc., TV has almost been stagnant in terms of content delivery and viewership. This is where I predict that online changes will have the greatest impact on TV viewing – something that the cable companies should take note of.

TV programs, while being available online, still are best viewed on TV from user experience perspective. As a result, paid content will be more viable and will see a larger adoption. Users will also start to “demand” more from their Video on Demand (VOD) programming. Because users like to view movies and favorite TV shows on TV for the most part, and not on an internet enabled device. VOD will need to evolve its offerings, interface and user experience to mirror more of what users are now getting used to online. The measurement of success will then closely mirror the success metrics in an online experience. On the other hand, ad supported programming, although a significant market in terms of dollar value, will be steady, and highly dependent on such metrics as, user demographic, click-through rates, completion rates, etc.

In either of the revenue models, common online success metrics such as, site navigation, content programming, time spent on a page, bounce rate, click-through rate on a title/promo, return frequency, etc., will/can be applied in some form to determine the success of a set-top experience.

The functionality offered by TIVO and its integration of streaming content from Amazon, Youtube and Netflix is already pointing to the online and TV synergies. As an example, UK market, with greater adoption of such preferences and willingness of users to pay for content, only helps to corroborate this trend. Cable companies can hence, gain a significant competitive advantage by preparing for the upcoming technological upgrades and investing in portability of online experience to set-top.

One metric to define website performance - Continued!

Some interesting questions were raised based on my last post on one metric to define website performance (http://www.analyticsheaven.com/2010/03/one-metric-to-define-website.html), so I felt like I should expand on the thought a bit more.

This theory of one metric often confuses the readers. It is not meant to replace the other more prominently monitored metrics, such as, bottom-line (which will be revenue). Return frequency is simply an indicative of consumer satisfaction with our product. Don't we all visit the same store, if we like what we see and get what we like? This philosophy extended to a web experience is what I am referring to as a metric that defines your web performance.

A higher return frequency means that our visitors are coming back to consume our content, buy our wares, conduct research, or whatever else we are programming. Looking at it from a mathematical model perspective, the metric is going to drive more revenue through our own unique revenue models (display, CPC, leads, etc.). I view revenue performance as a variable that is dependent on some of the more "upstream" variables (like, visits, return frequency, conversions, etc.) that can more directly be tied to consumer satisfaction which typically leads to higher bottomline.

An example of a parallel will be in call center industry, where Member Satisfaction Index (MSI) is often used as a metric to measure service quality. Similarly, Harvard Business review had published a study on "net promoter" being that "one" metric that everyone should monitor.

Monitoring one metric as an overall indicator of the health of your business does not mean that we ignore; defining corporate/business unit goals, identifying the KPIs and metrics that define success and acting on recommendations to improve upon each collectively - as may have been misunderstood from this post.

One metric to define website performance!

In the recently conducted poll on this blog "what one metric best defines your website's performance" a clear favorite emerged in the RETURN FREQUENCY (42% of votes). In second place was the Bounce Rate (28%), while Page Views and Conversion were not considered primary indicators of performance, although conversion did have some takers.

I would agree with the pattern, although, I also consider Bounce Rate to be a good indicator and more importantly, easily measurable metric to monitor.

Return frequency is interesting, since it indicates that users liked what they saw and are coming back. The greatest challenge I faced when measuring this metric was the accuracy and granularity of tagging to understand what was bringing the users back. The data usually is at site level and does little to offer insights into what did or did not work! (read my earlier post on this .. http://www.analyticsheaven.com/2009/11/are-you-looking-at-your-return_09.html)

Take for example, a content site where users may be coming back to read about a developing story and may stop once there are no new updates (or, the story fades from public memory). For an ecommerce site, certain deals and promotions may prompt repeat visitation, but don't necessarily mean loyalty.

I believe repeat visitation or loyalty is achieved through a combination of factors - navigation, user interface, relevance & timeliness of offering and source of the visit. Hence we need to build a framework, on site usage data and insights, that can be applied across the following 4 criteria.

A - (Product) where are users falling off or bailing from the site - improve our navigation to help users find what they came in looking for quickly (higher number of Page Views may not be a sustainable strategy, given the short attention span of users)
B - (User Interface) are there redundant widgets on the page that are distracting from the main story/promotion (one size fits all not a good strategy)
C - (Relevance/Timeliness) use the keywords trends and industry seasonality to ensure content is in tune with the user needs and interests
D - (Source of the Visit) differentiate the experience for browsing versus targeting. Browsers, ex., SEO visits, tend to consumer more pages, while more targeted referral traffic tends to be focused on the topic and leaves after the first page.

To summarize, if you decide that Return Frequency will a key indicator of the health of your business, ensure that your audience segments are clearly defined and measured; AND product navigation, UI, content and traffic source are designed to fulfill the needs of these segments.

Did I miss a metric(s) that you found to be a better indicator of success - I would love to learn about it, so please drop me a note!

Social media can drive ROI ... NOW!

Even as companies try to understand how to generate revenue out of their social media campaigns, there are other ways to define the ROI. Let us first simplify the dynamics of the social media – a whole lot of people sharing, commenting and blogging about their likes and dislikes. The positive – we are learning a lot about our users. The negative – our users are highly fragmented in every which way possible. So, how do we go about making sense of the feedback through social media and communities? After all, 10,000 visits from Twitter into our site that gets an average 5MM visits a month is not going to move the needle in revenue or traffic terms - for the most part that is the scale of variance we are talking about!

So where and how can we apply the findings for a greater return?

Presence in social media was often promoted as a way to build your brand recognition and image. However, marketers and product managers can utilize the data more robustly to develop new products and targeted campaigns. Consider social media as focus groups that are providing valuable insights into your products and services, albeit on wider and less cohesive manner than traditional focus groups. But herein also lies the advantage – if we can categorize the data into viable and logical buckets that best define our user base, we will have a much more specific knowledge that can be used to develop targeted offerings.

For starters social media findings (demographics, geography, product like/dislikes, interests, etc.) should be categorized into user data and product data. Product managers should work with analysts to define the current and future needs of the consumers, while marketers should think more targeting and localization of their campaigns. Take for example a shopping site – users look for latest offers, research about and seek approval for their next purchase, share the joy and frustrations from their new product, etc. – all the while also seeking for a relevant and targeted experience that caters to their whims and fantasies. If we can take the data from the social media voices of our consumer, we can make appropriate product tweaks, provide targeted offerings, edit our website navigation, make product related recommendations for up-sell/cross-sell, create more localized and focused experience, and so on.

The ROI of social media efforts would then be in-built with the ROI of product and marketing efforts, which will be a much more positive story, than the few hundred clicks it may be generating to our website. And, if positive word-of-mouth was to be factored in, our social media presence will find more internal support and add more to our P&L’s bottom-line.

Making sense of Twitter data

Marketers are trying very hard to make sense of the twitter data, but the range of "emotions" conveyed by the tweets and the lack of quantitative framework, make it extremely difficult to measure and apply the insights into real-life business improvements.

But, there are cool new ways evolving and recently, Harvard Business review had an interesting blog on "four ways of looking at twitter." Here's the link to the full article (http://blogs.hbr.org/research/2010/02/visualizing-twitter.html). The author talks about a couple of new visual aids (ex., Twitter Venn diagrams) being developed that may provide some quantitative feel to the tweets!

I decided to test my theory on "lack of analytics in strategic, operational and ecommerce decision-making" by running the Twitter Venn for the terms strategy, analytics and ecommerce. Below is the Twitter Venn that comes up:



This is a bit surprising even to me - the frequency of analytics and ecommerce tweets is relatively small, but more telling is the lack of overlap in analytics/strategy/ecommerce. I have worked with businesses where double-digit gains are easily achieved by merging the above three concepts. The tweeters, with a stake in strategy, analytics and ecommerce, just need to be thinking more congruence and overlap to realize those benefits.


Incidentally, I have been helping businesses build sustainable growth models by applying analytics to ecommerce strategy and planning (http://www.wsapartners.com for more info).

Planning to succeed with Analytics

Analytics and insights play into the business planning cycle in more ways than most organizations apply. It is a standard practice to use historical data and known events to prepare outlooks for the upcoming year. However, success metrics can be utilized to make business planning more robust and measurable. Businesses should identify a set of metrics that are bound to change during the course of the year, primarily from, shifting consumer, market and corporate needs. It is also imperative to earmark the metrics that cannot be influenced during the year and define appropriate measures to control the impact of these “fixed” variables on overall quarterly/yearly goals.

Pitfalls may come from unknown market forces – shifts in economy and consumer sentiment impacted overall usage patterns for online businesses in 2008 and 2009, thus significantly reducing the bottom line. In such times, it became imperative to focus our efforts on targeting and relevance to drive higher conversion and better average revenue per user (ARPU) to ensure viability. Ignoring the obvious may also lead to a lot of pain – for instance, drops in online shopping impacted not just the number of items sold, but also lower cost per clicks (CPCs) for online retailers and aggregators. The other hurdle, in my experience was, when external partners started to rewrite deals to cut costs, leaving us with no choice but to find innovative ways of managing/achieving our revenue and OIBDA goals.

As part of the annual planning, it is important to keep an eye on the key variables that “we control,” in order to be able to react to unforeseen market conditions and/or revenue dips. We started to listen more to our consumers and reacted appropriately to provide more engaging experience thus driving incremental revenue to offset the losses. The frequent A/B testing and agile project management to incorporate resulting recommendations assumed a whole new meaning. It also highlighted the need for a nimble annual planning process and metrics tracking/monitoring, so we are not caught with our pants down when; market softens, consumers leave, partners bail and corporate goals are “reorg’d.”

Campaign versus Search - User Experience & Metrics

Making your users feel special can happen through several means – providing what the consumers are looking for at the onset should be the most obvious starting point. Users come to our websites primarily through 2 channels, either promotions (pull), or user-driven search (push). Each brings in targeted users interested in your product or service and presents an opportunity to consummate and nurture the relationship.

However, often we fail to achieve the goals of our promotions strategies and/or returns on our marketing dollars because our “store front” did not appeal to the user need/want. Simply stated we probably did not do good job of engaging the user at the onset and then lost a further opportunity to up-sell our products and services. Differentiated experience is a must for the above pull vs. push strategies. However, what’s more important is to identify and measure the right metrics, such that our engagement and conversion goals are adequately represented and achieved.

When planning a PULL campaign, focus on the landing page experience that is clear and direct. For instance; if the users clicked on a story, make sure they see that story front and center on the page; if the users clicked on a 25% off offer, make sure it is prominently displayed on the page. Give the users what they want first, and if we have good knowledge of their behavior and usage pattern, we may show other BUT relevant up-sell opportunities – the idea is to let the user feel in control of the experience and not vice-versa. Omniture click-map can show the engagement with modules on your page – typically only 20% of these drive traffic to other sections of your site and hence are useful, the rest are clutter and annoying – get rid of the non-performers. The page view depth should not be high, since it indicates user was lost, or the offer was buried deep in the experience – not a good thing!

In a PUSH campaign, the dynamic is slightly different, in that, we know the user is searching, but is not 100% sure of what they will find, so they are more open to suggestions and up-sell opportunities. In this case, search page is ok to show plenty of relevant results, yet the focus should be user need. Recommendation engines are great for these pages and up-sell opportunities abound, provided they are relevant. Click-map on these pages usually shows more spread than that on campaign pages, BUT relevance becomes the key in driving conversion. Clicks on Sponsored Links and lead generation from the search pages provide good insight into the user response behavior and need to be monitored closely for optimization. Higher page view depth may actually be a good thing; depending on how specific is the user search term(s).