Archive: Analytics

Google Analytics is a free web analytics application that is quickly becoming one of the most widely used web analytics tools around. A common misconception that many people have is that GA can only be used to track Google AdWords. That’s simply not true. GA can be used to track any online marketing activity. And not only will Google Analytics track online marketing, it will also identify the conversion events that your online marketing creates.

There are two distinct steps to configure Google Analytics to successfully track online marketing activities:

1. Tag your advertising links
2. Create goals in Google Analytics

Before we can really get into how to track online marketing we must understand what we can track. With Google Analytics we can track 5 attributes of our online marketing campaigns. Each of these attributes provides insight into what is, and what is not, working, and are the foundation for making good decisions when adjusting your online marketing activities.

5 Aspects of Online Marketing

• The Campaign: The campaign is the high level marketing activity that you’re conducting. Think of it as a bucket that holds other activities. For example, you may conduct a big “back to school” marketing campaign. This campaign might involve an email blast to your newsletter subscribers, a special paid search campaign, and some banner ads. All of these activities are part of the “fall-sale” marketing campaign.
• The Medium: The medium is the mechanism that is used to push the message to the customer. Continuing the fall sale example, the campaign has multiple mediums because we’re using multiple mechanisms to reach the consumer. We’re using email, banner ads and paid search. All are different mechanisms for pushing the message out.
• The Source: The source identifies who is delivering the message to the customer and helps us better understand the medium. For example, there might be three sources for the paid search component of our campaign: “Google” for Google AdWords, “Yahoo!” for Yahoo! Search Marketing and “MSN” for Microsoft AdCenter.
• Term: The term is only used for paid search tracking and identifies the keyword that the visitor used in their search. It should be noted that you do not need to use a term. Every search engine will, by default, pass a keyword to your site and Google Analytics will capture and store that keyword. However, not every search engine will pass along the exact term that the visitor entered.
• Content: The content attribute is optional and stores information about the ad that the visitor clicked on. For example, we may want to send out two versions of our email newsletter during the back to school campaign. The emails will be sent at the same time, but will contain different formatting. We say these emails have different content. Using Google Analytics we can identify which ad performed better for us.

So now that we know what attributes of our online marketing we can track, how do we actually do it? We use a process called link tagging. Link tagging involves adding query string parameters to the destination URLs used in online ads. It doesn’t matter where the URL is used, it could be in an email, a banner ad or a paid search ad. If the URL has the appropriate query string parameters then Google Analytics can identify which ad the visitor clicked on. Once Google Analytics knows which ad the visitor responded to it stores the information in a cookie on the visitor’s machine. From that point forward, as long as the cookie exists, Google Analytics can connect the visitor’s actions with the originating ad.

We have one query string parameter for each campaign attribute.

All you need to do is assign a value to each parameter and attach it to the URL used in your online ad. What should you use for values? It doesn’t matter! Whatever you place in your parameters will be extracted by Google Analytics and appear in your reports. With that said, there are some best practices that will make your data easier to use.

1. Avoid white spaces. Separate words with a dash or an underscore.
2. Make sure that whoever is going to use the reports can understand the meaning of each value. For example, a value of ‘back-to-school-2007’ is easier to understand than ‘BTS07’.
3. Be consistent. Create a naming convention for each parameter and stick to it. Don’t use CPC for some paid search mediums and PPC for others.
4. Be aware that case matters. ‘CPC’ is different from ‘cpc’.
5. Track your values from one campaign to another. I suggest using a spreadsheet to keep track of all the parameters you create. I like to use a Google Spreadsheet because it is easy to share with co-workers and clients. Add a column for each of the campaign parameters, a date column and a note column. If you’re savvy with a spreadsheet then use the CONCATENATE function to automatically create tagged URLs. You can find an example on my blog, Anyalytics Talk.

How about some examples? Let’s look at a few links that will be used in our fictional back to school campaign.

The great thing about link tagging is that Google Analytics creates a report based on each parameter. For example, there is a Campaign report that identifies all the values in your utm_campaign parameter. You can then drill into the campaign to see which sources, identified by the utm_source variable, were better at driving traffic. I’ll discuss how to use these reports below.

Here’s another tip. If you’re unsure about your tagged links, run a small test. Send an email to 10 co-workers that includes a tagged link. Ask them all to click on the link. Wait a few hours and then log into Google Analytics. You should see data from the link in the email.

Once the tagged links are published Google Analytics will start collecting data.

I can’t stress how important it is to tag your links. It is the single most important step to tracking your online marketing. If your links are not tagged you won’t be able to track the traffic from your online marketing activities. Un-tagged links is one of the most common problems I see when working with clients.

A Note About Google AdWords

I just spent all that time explaining link tagging and now I’m going to tell you that you do not need to do it … sort of. Google Analytics is integrated with Google AdWords and one of the benefits is a feature called auto-tagging. Auto-tagging automatically adds a unique parameter to all of the destination URLs in your AdWords campaigns. There’s no need to go through the link tagging process, the unique parameter is used by Google to identify the ad that the visitor clicked on. Here’s an example of what an auto-tagged link looks like:

http://www.google.com.com/analytics/?gclid=CLTrqPOc2o4CFSBMGgod7ljIAg

Google Analytics decodes the unique parameter (named gclid) and creates the appropriate values for campaign, medium, source, term and content. The campaign will be the name of the campaign as defined in AdWords. The medium will be ‘cpc’ and the source will be ‘google’. Auto-tagging has a number of implications that you should take into consideration when tagging your non-AdWords links:

1. As I mentioned above, Google will automatically apply a medium of ‘cpc’ to your AdWords campaigns. If you want all of your paid search data to appear together (which you do) then your non-AdWords paid search links must also have a medium of ’cpc’’. This will cause GA to group all paid search traffic together.
2. The value for the content variable will be the name of the ad that you’ve created in AdWords. An ad with the title ‘Buy Widgets Now!’ will have a content value of ‘Buy Widgets Now!’.
3. The campaign value will be the campaign name that you define in AdWords. If this campaign has multiple source or mediums you want to make sure that your manually tagged links have the same value for campaign.

Remember, auto-tagging only works for AdWords. You still need to tag other paid search URLs.

Goals

Another extremely important step in tracking the success of your online marketing is creating goals. Goals are outcomes that we want our site visitors to achieve. Every website has a purpose, it could be to sell a product, provide information to the visitor or generate a sales lead. Measuring these outcomes is vital to web analytics and evaluating the performance of online marketing. To measure an outcome we need to configure goals in Google Analytics.

Goals in Google Analytics are simply pageviews. To set up a goal you need to identify the page on your website that indicates that a visitor has reached the desired outcome. To create a goal simply navigate to the goal setting for a specific profile and paste the URL in the Goal URL field for a profile.

There is more to setting up a goal. You could create a funnel to show the visitor’s path to the goal. But I’m not going to discuss advanced goal configuration here as I’m already pushing my word count limit. You can read more about goals and how they are configured in the Google Analytics help section or on my blog Analytics Talk.

Once you create goals, and once you tag your links, Google Analytics will automatically identify which marketing activities are generating goals. There’s no special configuration necessary to connect goals to marketing activities. GA will do that for you.

Analyzing the Data

You’ve tagged all your advertising links. You’ve created your goals. Now what? It’s time to evaluate your online marketing campaigns. This is the fun part. As I mentioned above Google Analytics creates a report for each of the query parameters that we attach to the URLs in our ads. Each report provides valuable information about the traffic and conversions that the markting generated.

Let’s start with the campaign report. It provides a high level view of how the campaign is performing. Google Analytics provides some standard metrics indicating how much traffic the campaign is generating (visits), how engaged that traffic is (pageviews per visit and average time on site) and how good the campaign is at attracting new visitors (% new visits). Campaigns are usually focused on attracting new customers to the website (which should yield a high % of new visits) or getting existing customers to come back (which should yield a low % of new visits).

Remember, these numbers just tell us about the traffic. We also want to understand if the ad generated any conversions. To view these metrics we use the Goal Conversions tab.

You’ll notice that the columns of the table have changed. We now see conversion rates for the various goals that were configured. But let’s go a bit deeper. Each tagged advertising link has a campaign, a medium and a source. We can drill into each campaign and evaluate how well the various sources and mediums are working. First, click on a campaign in the Campaign column.

We’re now looking at summary information for this campaign. I can use the Segment drop down box to view the sources and mediums associated with the campaign.

You can see how I’m evaluating what drove the success of my campaign. Was it a particular partner (i.e source) or a particular medium (i.e mechanism of communicating with the customer)? Again, I can use the Site Usage tab to measure how well a source or medium does at generating traffic and the Goal Conversion tab to measure the conversions for each ad.

The analysis does not end here. There are other reports that help us compare the effectiveness of our marketing in other ways. One of my favorate reports is the All Traffic Sources reports. This report creates a master list of all of the sources and mediums that drove traffic to the site. This report is great for comparing ongoing marketing activities.

We can dig into each campaign even further using the Segmentation feature in Google Analytics. Let’s say we want to know where, geographically, our campaign visitors are located. I can select a campaign from the Campaigns reports and then use the segment dropdown box located at the top of he report.

If I choose ‘city’ Google Analytics will show me which cities generated the traffic for the campaign. This is particularly useful if you’re doing any geo-targeted advertising.

So there you have it. Remember, you must tag your links and create goals to accurately measure the performance of your online campaigns. If you do you’ll have really valuable data to when evaluating your online marketing activities.

So you are building a web application… good for you! How are you doing? “Lots of people have signed up so we’re doing really well”, that sounds nice in a “you probably have no clue” kind of way. Allow me to explain.

Part of the benefit of doing business online is you can track EVERYTHING. Web services are the pinnacle of such businesses in my eyes because they are eminently trackable. But the questions you will be asking are: what to track, and where to start, and why even bother. In this article I’ll show you how to approach these questions, so you can find out (or at least have a much better idea) how your web application really is doing.

Why Track Anything?

The Eisenberg Brothers at Future Now Inc. have put together a great body of work preaching the message, not for eyeballs and traffic, but rather for conversions. To explain why conversions are so important to your business, the Eisenbergs introduced the concept of the leaky bucket. Very simply stated, if you have a leaky bucket, to keep it full you can keep adding water, or you can patch the hole. If the bucket represents your website, and water represents your sales, you can keep adding traffic to keep your sales numbers high, or you can patch up the holes in your website and increase the number of sales with your existing traffic. Constantly adding more traffic is not sustainable for many small businesses (especially start-ups with a $0 marketing budget), so the only option is to patch up the bucket.

The Conversion Funnel

A good way to start tracking all the different types of conversion for your business is to put them together in a funnel diagram like this:

This is a classic sales funnel for a web application. At each stage of the funnel, you can expect to lose a percentage of your visitors. So, let’s say 10 per cent of the people who visit your website trial your product, and let’s assume 10 per cent of those people decide to pay for your service. Therefore you are in fact losing 90 per cent of your visitors at each step of the process. This is actually not a bad conversion rate for many services and in this scenario your sales funnel would look like this:

To sum up, if you lose people at every stage – and again, it is a fairly common scenario for you to lose 90 per cent at each stage with a web service – then your bucket is leaking.

A More Sophisticated Web Service Funnel

If your bucket is leaking, then you need to identify the largest leaks and plug them fast. Breaking up your funnel into smaller pieces can help. Here is a more precise funnel, useful for services such as FreshBooks, Basecamp or DropSend:

Whoa… how did things get so complicated? They actually aren’t. Comb over that list and you will see these are merely the general steps a user must go through before they pay you for your web service. Once you see this funnel laid out on the page, identifying your weak spots becomes easier.

How to Track Your Progress

Let’s assume you commit to tracking and defining each of the six number of steps I laid out above. Here’s how we do it with FreshBooks:

To track step #1 (visitors), go get yourself a good, remotely hosted JavaScript (not server log) analytics solution. Google Analytics is a free example. We recommend IndexTools. If you can afford enterprise software (or just like data and have the money) you might want to try Omniture. Again, I would avoid server log parsing solutions like AWStats, Webalizer and Urchin 5 because they are not as accurate as you need them to be.

You may have noticed in the chart above that we don’t use our stats to track anything but the first two steps in our conversion funnel: visitors and trials. That is true. I like the accuracy of database tracking – especially when your numbers are low (ie. you are just getting started) and inaccuracies can really throw you off. Tracking does create programming and database overhead, but since you are storing very little information it does not put much strain on your database, and you can always turn the tracking off at some point down the road. Also, and I would say this is much more important, analytics do not give you good active user counts. What does give you good active user counts is tracking the number of times a user logs in.

Stats are also AWFUL at tracking paying user upgrades for a web service, because the transaction is not immediate – it can take weeks and/or months – and sometimes one user will upgrade multiple times. For these reasons I highly advocate tracking these metrics yourself using your database. You will likely want to build some custom reports for yourself as well. Allocating developing resources for internal projects like this is part of a growing application development trend known as shadow application development. It’s an investment in yourself and it will pay off.

How to Decide What to Fix First

So let’s assume you take my advice and you build and track the conversion steps. And let’s assume your bucket is leaking (if it isn’t, email me with the subject “EAT MY SHORTS”). The question is, “what do I fix first?” The answer? Start as high up the funnel as possible.

Most people need to start with visitors to trials. If 5-10 per cent of first time visitors do not trial your service, you have some work to do – fast. If you need more specific guidance, I recommend adding another step to your conversion funnel. For example, if you can’t figure out where you are losing people before they sign up to trial your service, add another step in your stats called “view sign up”. If 30 per cent of your visitors are viewing your sign-up page, but only 2 per cent are actually signing up, you’ll want to redesign your sign-up page.

Here is a chart with some hints as to where to invest your time in an effort to improve each stage of your conversion funnel:

How Much Data Do You Need to Have a Decent Sample?

Ideally, you want 100 or more records so you have a decent sample in any stage of your conversion funnel. But think about that for a second, if you need 100 paying subscribers, and you convert one per cent of all site visitors to paying users, then you need to generate 1,000 trials, and drive 10,000 visitors to your website. That can take months when you are just getting started. This is why it is so important to start focusing on the top of that funnel first (ie. visitors to trials, the trials to successful registration form completion). These metrics are the fastest to track, and if you get them set right, you will get more people into your application who will then give you feedback so you can work on your other metrics. It’s a virtuous circle.

Conclusion

You can’t improve what you can’t measure, so start measuring your conversion funnel ASAP. It’s pretty remarkable when you see the results, and if you take the time to do it, you will know how you are doing in no uncertain terms.

Shout out to those of you who run web services: I’d love to know how your conversion funnel is doing so that I can aggregate some data and share it with entrepreneurs who are trying to get started. Shoot me an email if you would like to participate. Thanks.

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