Marketing Analytics A Comprehensive Guide Version 1.0 - Inge - 2022 - FlatWorld - 9781453398937

Marketing Analytics
A Comprehensive Guide
Version 1.0
Christina J. Inge
aT vn
Marketing Analytics: A Comprehensive Guide
Version 1.0
Christina J. Inge
Published by:
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© 2022 by Boston Academic Publishing, Inc. d.b.a. Flat World

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Gen: 202201311556
Brief Contents
About the Author

Acknowledgments
Preface
Chapter 1 What Is Marketing Analytics?
Chapter 2 Internal Data: Many Sources, One Goal
Chapter 3 From Direct Mail to Ad Platforms: Supplementing Internal Data with External
Databases and Research
Chapter 4 The Data Engine of Search
Chapter 5 Understanding Your Landscape
Chapter 6 Measuring the Social Web
Chapter 7 Over 100 Billion Emails a Day?
Chapter 8 Measuring the Web’s Data
Chapter 9 Going Beyond the Basics
Chapter10 Offline Research Matters, Even in an Online World
Chapter11 The Engagement Economy
Chapter 12 Predictive Analytics, Data Visualizations, and Dashboards
Index
Marketing
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Contents
About the Author
Acknowledgments
Preface

1.1. Marketing Analytics: More Than Just Crunching Numbers
From Campaign Measurement to Marketing Measurement
A Brief History of Analytics
Quantitative and Qualitative Data
1.2 A Closer Look: LuxeUnique
1.3. Analytics and the 4Ps
Uses of Analytics
Who Does Analytics?
Analytics Across the Organization
From Data to Decisions
1.4 How to Use This Book
Channel-by-Channel
A Closer Look and Case Studies
Do the Math
Questions and Activities
1.5 Core Concepts in Marketing Analytics
Return on Investment
Key Performance Indicators
Return on Ad Spend (ROAS)
Conversion
Marketing Funnels
Marketing Optimization
Click-Through Rate (CTR)
1.6 ACloser Look: Optimizing for Our Top Customers
1.7. From Data to Strategy: Using Data Sources
Integrated and Data-Drive Marketing
Creating Actionable Data ;
1.8 Case Study: Impact Hub Boston
1.9 Do the Math: ROAS—An Example of How Marketing Metrics Works
1.10 Conclusion
1.11 Questions for Further Study
1.12 Endnotes
39
Zell Types of Internal Data 40
Marketing Data 40
Non-Marketing Data 45
2:2 A Closer Look: Hannah’s Hardware 48
2.3 Conducting an Internal Data Audit 49

Organizing an Audit 50
Evangelizing Data Within Organizations 53
2.4 Marketing Attribution, Customer Lifetime Value, and Average Order Value 53
Attribution Metrics 54
Multitouch Attribution 55
2.5 Do the Math: Web Analytics —Acquisition Data and Conversion Rate by 5h
Channel
2.6 Case Study: Credit Union Association 58
aT Conclusion 59
AO Questions for Further Study 59

2.9 Endnotes 60
Chapter 3 From Direct Mail to Ad Platforms: Supplementing Internal Data with 61

External Databases and Research
3.1 External Data and Marketing 62
Big Data 63
Usage of External Data 63
3.2 A Closer Look: Finding the Right Markets 64
3.3 Types of External Data 66
Data from Data Brokerages 67
“Second-Party Data” 69
B2B Lead Databases 70
Search Data 70
Market Information 73
Advertising and Search-Derived Big Data Sources 76
3.4 Integrating External and Internal Data 78
Pairing Search and Web Analytics Data 78
Using External Data on Consumers with Internal Data 79
3.5 A Closer Look: Entering a New Market 19
3.6 Do the Math: Estimating Market Size 80
3.7 Conclusion 82
3.8 Questions for Further Study 82
3.9 Endnotes 84
Chapter 4 The Data Engine of Search 85
4.1 The Data Engine of Search 86

SEO and PPC: Know the Difference 86
The Importance of Search Data in Understanding the Customer Journey 87
4,2 A Closer Look: AccountCo 87
4.3 Core Types of Search Data 89
Average Position 89
Acquisition Keywords 90
Search Visibility/Search Impressions 91
Inbound Links 91
Technical SEO Reports 93
4.4 Strategic Paid Search Data 94
Search Volume 95
Estimated and Actual Cost per Click 95
Cost per Mille (CPM) 96
Quality Score 96
Visibility and Competitive Metrics 98
Cost per Conversion, per Lead, and per Sale 98
4.5 Using Search Data to Optimize Search Marketing 99
Competitive Analysis and Benchmarking 100
Inbound Link Analysis 100
Keyword Analysis 104
Technical Analysis 106
4.6 Using Search Data for Marketing Strategy 107
Integrated Marketing Campaigns 108
Content Marketing Strategy 114
Keyword Conversion Analysis 112
4.7 A Closer Look: Keywords and Product Optimization 112
4.8 Do the Math: The SEO Audit 113
4.9 Case Study: Winning the Local Search Rankings 114
4.10 Conclusion 116
4.12 Endnotes 118
Chapter 5 Understanding Your Landscape 119
5.1 Traditional Sources of Competitive Data 120

Data Brokers 120
Patent Filings 121
Securities and Exchange Commission and Related Filings 121
Primary Data Sources 124
Market Research 125
5.2 A Closer Look: Building a Brand 126
5.3 Digital Sources of Competitive Data 127

Social Media Tools 127
Web Analytic Tools 129
Search Engine Optimization and Cost per Click Tools 130
5.4 A Closer Look: Launching a New Product 131
5.5 Industry Data 132
Analyst Reports 133

Government and Non-Governmental Organization Reports 133
Conducting a Competitive Analysis 134
5.6 Benchmarking 135
Using Benchmarking Data 135

Benchmarking Across the 4Ps 136
5.7 Do the Math: Conjoint Analysis 137
5.8 Conclusion 139
5.10 Endnotes 140
141
6.1 Basic Metrics 141
Audience Size: Followers and Likes 143
Engagement 144
Profile and Page Views 148
Mentions 148
Follower Demographics 149
6.2 A Closer Look: Post or Profile Metrics? 150
6.3 Social Listening 150
6.4 Paid Social Media Metrics 153
Quality Score/Quality Ranking 153
Engagements and Actions 154
6.5 Advanced Social Media Metrics 155
Reach, Unique Reach, and Frequency 155
Share of Voice 156
6.6 Growth and Conversion Metrics 157
Growth 158
Most Popular Posts 159
Impressions 160
Conversions and Assisted Conversions 160
6.0 Sentiment Analysis 161
Machine Learning 162
Natural Language Processing 163
6.8 A Closer Look: Turning Sentiment Analysis into Consumer Insights 164
6.9 Do the Math: Sentiment by Reach 166
6.10 Case Study: Tweets for Seats 167
6.11 Conclusion 168
62 Questions for Further Study 169
6.13 Endnotes 170
Chapter 7 Over 100 Billion Emails a Day? 171
ree Basic Email and Marketing Automation Techniques 171

Opens by Campaign 173
Click Rate and Click-to-Open Rate 174
Forwards 176
List Growth 176
(6? A Closer Look: Building a Loyal Base 177
7.3 List Health Metrics 178
Bounce Rate 178
Complaint (Spam) Rate 179
Unsubscribe Rate 180
Churn Rate 182
Reconversion and Re-Engagment Rate 182
7.4 ACloser Look: Shopping Cart Abandonment Campaign 183
7.5 Advanced Email Metrics 184
Subscriber Metrics 185
Revenue per Subscriber and Revenue by Segment 187
7.6 Marketing Automation Data 189
Individual Contact and Segment Data 190
Lead Conversions 190
Marketing Automation Trigger Metrics 191
7.7 Message Testing and Optimization 192
AVB Testing 193
Multivariate Testing 195
Testing by Segment 196
7.8 Dothe Math: Revenue by Subscriber 196
7.9 Conclusion 197
7.11 Endnotes 200
Chapter 8 Measuring the Web’s Data 201

8.1. What Is Web Analytics? 201
Google Analytics 202
8.2 ACloser Look: Hats Off to a Great Launch 202
8.3. Basic Web Metrics 204
Traffic Data 205
8.4. User Behavior and Marketing Effectiveness Data 208
Engagement 208
Bounce Rate 209
Acquisition Channels 210
Session Duration aA
Pageviews and Time on Page 214
Pages per Session 214
8.5 Conversion Data 215
Goals 216
Funnel Visualizations 216
8.6 Content Data 218
Top Pages by Pageviews 218
Top Landing and Exit Pages 219

221
8.7. ACloser Look: What Do They Want to See?
223
8.8 Do the Math: Page Conversions
294
8.9 Conclusion
Sault Endnotes 226
227
911 A Closer Look: Is Our Site Really Optimized? 228
9.2 Advanced Conversion Metrics 228

Goal Flows 229
Conversion Paths 230
Conversion Against Other Metrics 232
9.3 E-Commerce Data 237
Revenue 237
Product Revenue by Category 238
Top-Selling Products 239
Average Order Value 240
Shopping Behavior 244
9.4 Technology Information 242
Device: Mobile Desktop, Tablets 243
Cross-Device Tracking 244
Other Technology Data 246
9.5 Behavior Data 246
Individual Behavior Reports 246
Behavior Flow 249
Measurement Using Advanced Tagging 249
o.6 Demographic and Psychographic Data 252
Demographic Data 252
In-Market and Affinity Categories 252
g:7 A Closer Look: Bounce Rate and Event Tracking 254
eee. Conclusion 256
oR) Questions for Further Study 257
9.10 Endnotes 258
Chapter 10 Offline Research Matters, Even in an Online World 259
1034 Surveying Consumers to Learn Their Preferences 260

A Century-Old Data-Gathering Method, Relevant Today 260
Creating a Full Picture 260
102 A Closer Look: Finding Our Market 261
10.3 Types of Research 262
Market Measurement 262
Market Research for Marketing 264
10.4 Survey Design and Deployment 269
Setting Goals 270
Respondent Selection and Sampling Methods 271
Reducing Sampling and Non-Sampling Error 272
10.5 Questionnaire Design 274
Types of Questionnaire Questions 275
10.6 Qualitative, In-Depth Research 283
Focus Groups 283
Interviews 284
Customer Communities 285
Field Observation 285
Sample Sizes in Qualitative Methods 286
10.7 Analyzing Market Research Data 286
Collating Survey Data 287
Collating and Coding Qualitative Data 287
Basic Statistical Methods in Quantitative Survey Analysis 288
10.8 A Closer Look: Creating the Right Interface 291
10.9 Do the Math: Standard Deviation 292
10.10 Conclusion 294
10.12 Endnotes 296
Chapter11 The Engagement Economy 297
tha Understanding Video Metrics 298

Video Content Versus Video Advertising Measurement 298
Live, Social, and Recorded Video Measurement 298
Video Content Metrics 299
Content Marketing and Video 299
Play Rate and Impressions Click-Through Rate 300
Engagement 301
Conversion Rate 304
YouTube Channel Metrics 304
Video Ad Metrics 308
Views and View Rate 308
Impressions 309
Viewability Rate 309
Click-Through Rate 310
Conversion Rate 310
Earned Actions 310
Cost per View 311
11.4 A Closer Look: Forget the Stage Fright—Go Live 311
11.5 Mobile App Metrics 312

Mobile App KPIs in Context 313
Basic Mobile App Metrics 314
Conversion Rate Data 316
Advanced App Metrics
11.6 A Closer Look: Do We Want to Keep Them Entertained or Loyal?
ele Do the Math: Measuring Net Engagement Growth
ies: Conclusion
(aS Questions for Further Study
11.10 Endnotes
Predictive Analytics, Data Visualizations, and Dashboards 327
Chapter 12
12.1 Data Mining in Marketing Analytics 328
1252 A Closer Look: The Next Must-Have Product? 328
12.3 Data Mining and Predictive Analytics in Marketing 331

Data Mining Versus Predictive Analytics Versus Artificial Intelligence 332
Machine Learning 332
12.4 How Does Data Mining and Predictive Analytics Work? 333
12.5 Basic Concepts of Predictive Analytics: A Primer for Marketers 333
Cleaning Data 333
Supervised Versus Unsupervised Learning 335
Statistical Methods 337
Neural Networks 341
12.6 Natural Language Processing for Data Mining 342
Methods of Natural Language Processing 343
Sentiment Analysis 345
Selecting the Right Models 346
12a Using Predictive Analytics 347
12.8 Data Visiualization 348
Types of Visualizations 348
12,9 Making Data Actionable: Creating Dashboards 355
Strategic Versus Tactical Dashboards 356
Performance Dashboards 358
Executive Dashboards 358
12.10 Tools of Dashboard Management and Data Visualization 359
Integrated Tools 360
Data Analytics and Visualization Tools 361
12.11 A Closer Look: Can We Trust the Numbers? 363
12.12 Do the Math: Bag-of-Words 364
12.13 Conclusion 365
12.15 Endnotes 367
Index 369
About the Author
Christina Inge has two decades of experience leading digital strategy and manag-
ing complex marketing technology projects. She specializes in articulating
effective, efficient digital strategies for organizations using the latest channels to
drive results. She is the founder of Sleek Marketing, which offers hands-on edu-
cation on digital marketing in the Boston area.
She teaches digital marketing at the Master's level at the Harvard University
Division of Continuing Education and the Northeastern University College of
Professional Studies, where she is a faculty advisor to and the founding Creative
Director of Husky Communications, the University's student-run marketing
agency. She has won the Joanne Fussa Distinguished Teaching Award at Harvard
University.
Christina served on the board of the American Marketing Association as vice
president of social media throughout much of the 2000s. She is a frequent and
sought-after speaker on web analytics, content strategy, and SEO. She has
worked with well established brands such as Nissan, Smithsonian, Pega Systems,
as well as a range of startups and nonprofits. Christina has won numerous
awards for her work, including the Social Media Society Social Media Stars award,
as well as the Future of Marketing award. She has been a Masschallenge and Source: Tiffany Hu
Techstars mentor and has served on the board of IEEE Entrepreneur's Network.
Christina holds a BA in English from University of Maryland University College and a MS in
Instructional Technology from University of Wyoming. She is currently working on her EdD at
Northeastern University, proving you are never too old to keep on learning.
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Acknowledgments
I dont know where to start thanking people for their roles in this book. Most importantly, this book
is dedicated to my mother, Susan Inge. During the last months of her life, as she battled ovarian
cancer, I spent every minute I could with her, even my writing time. Several chapters of this book
were written by her bedside. “Shh,” she would say to the hospice nurses as they came in to check
her vitals, “Christina is working on her book!” This one’s for you, Mom. You are proof people change
and grow.
To my grandfather Joe for leaving me all the books in which I got lost and from which I taught
myself as a child. To Professors Nora Mark and Carolyn Reynolds, who told me I should be a writer
when I was twenty-one. It took me another twenty years to listen to you. I hope you, Grandpa Joe,
and Mom are sitting somewhere in heaven's library, relieved.
A huge thank you to my Harvard research fellow, Alphonse Le. You are a sympathetic yet
sharp-eyed editor, which is precious and rare. Thank you to my friends and colleagues Geoff Mam-
let, and Myles Bristowe for sharing their successes in the case studies. My stellar intern, Dhriti
Hampapur, for her precise ability to turn concepts into charts that sing. To Jean, Mary, Warnie, Peg,
Carolyn C,, Kris, Dick, Anita, Hilary, Heidi, Andrea, and Jackie, for cheering me on in my darkest
hours. You have no idea how much I needed it and you were there for me. To Rebecca Menapace,
for being the voice of reason, and to Fern Shamis, for saving me from covfefe.
To Mary Higgins, Laura Wilcox, Anne Dwojeski, Karen Flood, and Mark Lax at Harvard, for
their ongoing support of my interdisciplinary work.
To Ed Powers at Northeastern University for being the mentor | always needed. To Carl Zangerl
at Northeastern University, for being our steady guide and leader.
To Chris Weir at Cambridge College for believing in me, and Tina Callaway, the first person to
call me “doctor.”
To Bob Cargill, Beth Drysdale, Pat Lee, and John Cass, for their support of Thoughtlight and
my growth as a marketer. To Jeff Cutler for his unfailing support of me (and countless others) as a
marketer and human.
To Impact Hub Boston, for being my work home where it was always a fun, supportive place to
be productive.
To my therapist, Denise, for being an insightful counselor who has helped me stay as sane as
writers generally can be.
To the fur family: Modie, Tilly, and Iris for shoving my arm for pets when I needed a break. And
Eddie for sleeping on my feet while I worked. There will never be another dog like you, and I miss
you every day.
Most of all though, I wrote this for my students. This is for you. My dearest wish is that you
far exceed what I have laid down here, and make the world a more rational, ethical, and prosperous
place with data.
The author would like to thank the following colleagues who have reviewed the text and pro-
vided comprehensive feedback and suggestions for improving the material.
+ Julia Cronin-Gilmore, PhD, Bellevue University
¢ Shawn P. Daly, Niagara University
¢ Rakesh Niraj, Case Western Reserve University
- Donald P. Roy, Middle Tennessee State University
- Alex D. Stein, PhD, The Fox School of Business at Temple University
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Preface
I'll never forget the day I learned about web analytics. For years, like most communications
profes-
sionals, I had struggled to put hard numbers against the results that creative work, such as content
marketing, created. Seeing the first version of Urchin, and then Google Analytics, opened my eyes
to what data was available beyond the survey-driven market research I was then conducting. Mar-
keting analytics has been my passion since almost the day it was born, so to speak, as its own
discipline. I started speaking at marketing events on the other digital marketing topics in which
I had knowledge, such as content marketing, and often urged marketers to use analytics to better
understand what they were doing, prove its worth, and make it better. I have been in the marketing
business for 20 years, starting out as a copywriter and moving through market research to heading
up digital marketing for tech companies I started my own agency, Thoughtlight, in 2014. Through-
out the past 15 years, I have also been a passionate marketing educator. This long and winding road
eventually led me to propose a graduate course on marketing analytics at the Harvard Division of
Continuing Education, where I was teaching a course on mobile strategy. The course was a hit. In
fact, Northeastern University called a few years later, asking me to develop a specialized curricu-
lum on analytics for their communications Master's program. To date, I have developed curricula
focused on or including marketing analytics for seven colleges and universities. At no point, how-
ever, could I find a textbook for my classes. Cobbling together readings from free online sources
kept the class materials affordable, but left major gaps that I filled in with materials I created
myself. Available books were either too focused on numbers or addressed only part of what my stu-
dents needed to really feel the topic was relevant. Finally, I decided to write the textbook working
professionals and traditional undergraduates alike needed. You are holding the results of that labor
of love. I wrote this book in my office, on trains, and by my mother’s bedside as she lay dying. “Shh,”
she would say to the amazing nurses who cared for her, “my daughter is writing a textbook!” She
never tired of telling people, and came to understand the topic well - it was a respite from the end-
less hours of HGTV that stretch before so many patients.
I have been in the marketing business for twenty years, starting out as a copywriter and mov-
ing through market research to heading up digital marketing for tech companies I started my own
agency, Thoughtlight, in 2014. Throughout the past fifteen years, I have also been a passionate
marketing educator. This long and winding road eventually led me to propose a graduate course
on marketing analytics at the Harvard Division of Continuing Education, where I was teaching a
course on mobile strategy. The course was a hit. In fact, Northeastern University called a few years
later, asking me to develop a specialized curriculum on analytics for their communications Master's
program. To date, I have developed curricula focused on or including marketing analytics for seven
colleges and universities.
At no point, however, could I find a textbook for my classes. Cobbling together readings from
free online sources kept the class materials affordable, but left major gaps that I filled in with mate-
rials I created myself. Available books were either too focused on numbers or addressed only part
of what my students needed to really feel the topic was relevant. Finally, I decided to write the
textbook working professionals and traditional undergraduates alike needed. You are holding the
results of that labor of love. I wrote this book in my office, on trains, and by my mother's bedside as
she lay dying. “Shh,” she would say to the amazing nurses who cared for her, “my daughter is writ-
ing a textbook!” She never tired of telling people, and came to understand the topic well—it was a
respite from the endless hours of HGTV that stretch before so many patients.
I wrote this book for you, instructors who need to make a potentially dry subject engaging. If
you use it in order, it's a complete introduction to marketing analytics as it’s practiced today. You
can also use it as a supplemental text to add data in an accessible way to many marketing and com-
course
munications courses. It’s broken down into topics relevant to specific modules in a survey
Marketing Analytics
on marketing communications. This also makes the book useful when teaching adult profession-
als, since you can tailor it to the types of marketing they do, or want to learn. It's also perfect for
a communications course—students can work on a communications piece, such as a social media
campaign, then immediately understand how they could measure results. The book presumes no
prior knowledge of marketing. Yet, it has ample practical knowledge for those with experience, too.
Using what's in this book, I have taught first-year students without losing them and vice presidents
of marketing without boring them.
Cutting-edge topics covered in the book include data-driven targeted advertising (Chapters 3,
4, and 6), marketing optimization (Chapters 1 and 7), CRM systems and data (Chapter 2), sentiment
analysis (Chapter 12), CRO (Conversion Rate Optimization) (Chapter 1), personalization (Chapter 7),
ROI analysis (integrated within all chapters), video analytics (Chapter 11), paid search (Chapter 4),
predictive analytics (Chapter 12), SEO (Chapter 4), machine learning and artificial intelligence (Chap-
ter 12), measurement of mobile apps (Chapter 11), social media analytics (Chapters 6 and 11), data
brokers (Chapter 3), privacy regulations (Chapter ), dashboards (Chapter 12), eCommerce analytics
(Chapter 9), data audits (Chapter 2), conversion funnel data (Chapters 4, 6, and 8), influencer market-
ing measurement (Chapter 6), email data (Chapter 7), multivariate testing (Chapters 7 and 8), data
visualization (Chapter 12), and many more.
« “Learning Objectives” detail the key things students will learn in each chapter. The objectives
are written to show their relevance to real-life marketing. Students can see the relevance of
what they will learn to their career goals.
« “Key Terms” provide definitions for marketing analytics terminology. A unique feature of this
book is that it also provides definitions of standard marketing concepts, so that the book can
be used by students with little prior marketing knowledge.
¢ Infographics throughout bring concepts to life through visuals.
« Embedded videos bring some of the marketing world's brightest luminaries into the classroom.
They provide further learning on key concepts, engage students with additional case studies,
and show worked examples of math concepts.
¢ Embedded multimedia resources link to demos of key marketing analytics tools, such as a sam-
ple set of data in a real, working Google Analytics account. Some resources are simulations,
while others are live data using actual toolsets. Allowing students to gain hands-on experi-
ence with the tools most commonly used by working marketing analysts, these resources lend
themselves to lab assignments, as well as provide practical experience.
End-of-chapter discussion questions, both short and detailed, provide a way to consolidate
learning by prompting students to make connections. They are tailor-made for inspiring class-
room discussion. They can be used as mini-assignments, breakout room discussion topics in
online classes, or small-group challenges in the classroom.
A Closer Look
Analytics has a reputation as a complex topic. It's especially daunting sometimes for students with-
out experience in digital marketing, or those who don't like math. That's why I use storytelling in
my classes. Based on my two decades of experience in the trenches as a marketing professional,
these segments tell the stories of businesses making sense of data with fun, but detailed stories
that tell the real scoop on how data is used in the real world. These stories bring together the con-
cepts in stories to which students can relate, from working on a side hustle to managing a retail
store. They tie new concepts to what students know in their daily lives. Featuring relatable charac-
ters who are not experts but develop expertise, A Closer Look makes data come alive in the context
of today’s culture.
FTelaCe
Do the Math
Each chapter ends with Do the Math. It's a math-phobe friendly, gentle introduction to basic math
concepts. Each Do the Math (DTM) is built around a relatable story, continuing the narratives used
as examples throughout the book. By this point in the chapter, students understand the context
for the numbers. They care about the characters using the numbers in real-life situations. In plain
English, DTM walks students through concepts such as mean and median conceptually, putting
numbers into a practical context.
I hope that this book will prove to be a valuable resource, no matter what you teach. If you are
using this book, or are a student reading it, Iwelcome your feedback, questions, or if you just want
to chat about marketing analytics. You can reach me at christina@marketinganalyticsbook.com.
Supplements
Several supplements can help instructors get the most out of this book.
Test Item Files
A robust test bank for each chapter allows you to assign easily self-scoring quizzes, midterms, and
final exams. The questions span the full range of topics covered in each chapter, so that you can
test for comprehension. Questions are in a range of formats, too, from term matching to multiple-
choice to short-essay, allowing for engaging variety no matter what the test.
Test Generator— Powered by Cognero
FlatWorld is pleased to provide a computer-generated test program powered by the leading assess-
ment provider, Cognero, to assist instructors with selecting, randomizing, formatting, loading
online, or printing exams. Please contact your local FlatWorld representative or FlatWorld support
(support@flatworld.com) for more information or to request the program.
PowerPoint Slides
Present concepts easily to your students using the attractive, modern slide decks for each chapter.
Decks include all of the topics and key concepts on separate slides, so that you can customize to the
topics youre teaching. Visuals are matched with the text graphics, allowing for concept reinforce-
ment. You can mix and match these slide decks with your own or use them as is in your lectures.
8 Marketing Analytics
Marketing News Resources
The world of digital marketing is constantly changing, and no book can cover all the breaking news
in the world of communications. To keep your class timely, the Marketing News Resources guide
lists highly credible news sources in all the major topics covered by the book. These include not
only analytics, but also SEO, social media, PR, and communications. This resource can be used a
number of ways, some of which are outlined below.
1. Select a breaking news story in digital analytics for a classroom or online discussion prompt.
. Add news items to slides to add a fresh perspective.
. Expose students to professional resources in the digital marketing field.
. Keep up to date on the latest developments in marketing as professional development.
. Obtain additional materials for case studies or assignments.
Oe
.&
OF
O
N . Give students a head start on assignments that require them to do their own research.
This resource guide will help keep your course content fresh in this ever-changing world of
digital marketing.
Instructor’s Manual
The instructor's manual (IM) includes learning objectives, an outline, key takeaways, interactive
activities, and key terms with definitions for each chapter.
FlatWorld Homework
Accompanying FlatWorld Homework for this text is provided in an easy-to-use interface. Multiple
choice, fill-in-the-blank, matching, and other question types are available for use and are all auto-
gradable. Students who utilize the homework questions should see their performance improve on
examinations that are given using the Test Item File questions provided to adopters via Word doc-
uments or LMS packages.
Sample Syllabi
Sample syllabi based on either 16-week or 10-week terms provide useful templates that help new
adopters transition from their current course textbook to Marketing Analytics: A Comprehensive
Guide. Faculty can download the syllabi from the Flat World website or they can be obtained by con-
tacting your local FlatWorld representative or FlatWorld support (support@flatworld.com).
CHAPTER 1
What Is Marketing Analytics?
Learning Objectives
By the end of this chapter, you will be able to:

1. Describe what is meant by marketing analytics.
Describe what is meant by analytics in a digital marketing context.
Apply basic principles of marketing analytics to a business problem.
. Distinguish between internal and external data.
oN
ak
. Describe the importance of Key Performance Indicators (KPIs) in marketing analytics.
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” So
goes the traditional marketing adage, attributed to retail pioneer John Wannamaker. He's believed
to have made his witty statement in the 1800s, when advertising was coming into its own as an
art form and driver of revenue. What he said, though, held true since the birth of advertising in
ancient times, all the way into the Madison Avenue era of the mid- to late-20th century. Marketers
have worked hard for years creating promotions designed to inform and engage consumers. And
successful results have always meant increased sales. However, we know that not every ad is suc-
cessful at driving customers to buy. Neither is every blog post, Instagram photo, or YouTube video.
For companies, marketing represents a substantial investment. In the United States alone, com-
panies spend hundreds of billions of dollars on advertisements, as well as on maintaining their
websites, creating brochures, and sending emails. Wouldnt it be ideal if every company could see
which of these efforts led to sales, and which did not? Knowing the results of each marketing cam-
paign allows companies to invest in their most successful programs, while avoiding wasted money
on less-successful endeavors.
1.1 Marketing Analytics: More Than

Just Crunching Numbers
“Half the money I spend on advertising is wasted; the trouble is I don't know which half.” So
goes the traditional marketing adage, attributed to retail pioneer John Wannamaker. He's believed
to have made his witty statement in the 1800s, when advertising was coming into its own as an
art form and driver of revenue. What he said, though, held true since the birth of advertising in ,
ancient times, all the way into the Madison Avenue era of the mid- to late-2oth century. Marketers
have worked hard for years creating promotions designed to inform and engage consumers. And
successful results have always meant increased sales. However, we know that not every ad is suc-
cessful at driving customers to buy. Neither is every blog post, Instagram photo, or YouTube video.
For companies, marketing represents a substantial investment. In the US alone, companies spend
hundreds of billions of dollars on advertisements, as well as on maintaining their websites, creat-
ing brochures, and sending emails. Wouldnt it be ideal if every company could see which of these
efforts led to sales, and which did not? Knowing the results of each marketing campaign allows
companies to invest in their most successful programs, while avoiding wasted money on less-suc-
cessful endeavors.
From Campaign Measurement to Marketing

Measurement
Measuring which campaigns are worth the investment is one benefit of marketing analytics. But
what if companies could do even more with data? What if they could predict which consumers
are more likely to buy any given product? What if they could use data to set fair prices that make
those products affordable to target consumers while providing sustainable company profits? What
if they could determine whether a website is easy to navigate before it's launched to the world?
Although they don't fall under the topic of advertising, these data goals are part of marketing
analytics. Marketing analytics is the study of data that affects the 4Ps of marketing: Product, Pro-
motion, Place, and Price. It's a key driver of creating powerful messages, better products, and a
healthier economy. It's fair to say that the promise of data is one of the greatest economic success
stories of the 21st century.
The study of marketing analytics has exploded in recent years. As noted previously, courses on
marketing analytics are in high demand across graduate, undergraduate, and continuing education
programs. The U.S. Department of Labor Bureau of Labor Statistics estimates that there will be 2.7
million jobs in business analytics by 2020, with 40% of those being outside finance and information
technology (IT), i.e., in marketing and related creative fields. The Digital Analytics Association, the
leading industry group for marketing analysts, boasts 8,600 LinkedIn followers as of February 2019.
Their conference, Marketing Analytics Summit, garners 1800+ attendees each year on average.
Across the globe, in companies large and small, marketers are trying to catch up with the trend.
Having some knowledge of how to use data is now a prerequisite for many marketing jobs. We now
have a phrase for the type of professional who combines creativity with business acumen, while
making promotion, price, product, and distribution decisions based on well-researched data. We call
such a professional a data-driven marketer. With this book, you, too, will gain the knowledge you
need to be a data-driven marketer.
A Brief History of Analytics

The World Wide Web dates to 1989, when Tim Berners-Lee, a researcher at the prominent research
center, CERN, developed a decentralized network for sharing information online. At first, the inter-
net was available mostly to researchers, the government, and the military. It became widely avail-
able to the public in 1991."' Companies began to post basic information about themselves aimed at
consumers shortly thereafter, at first aiming at technical and hobbyist communities. Online portals
helped organize information, directing consumers to useful sites organized by topic. Starting in the
early 1990s, e-commerce sites began offering online shopping; Amazon was founded in 1995. By the
early 2000s, social media emerged, as companies such as Friendster allowed people to connect with
each other online.
hits With all of this online commercial activity, companies sought ways to measure consumer activ-
Requests for files that ity online. At first, web teams examined log files, which are records of files served from company
occur whenever an item is servers as consumers access the website. At first, websites were very simple: an HTML file of a few
served from a web server.
text pages with limited images embedded. As a result, log files were simple, recording hits, or
requests for files that occur whenever an item is served from a web server. A simple webpage at the
time might require only one hit, or request from a consumer's web browser to the company’s server,
to access the entire page. For this reason, many businesspeople began to call a recorded website
11
visit a “hit.” Over the past two decades, websites have become much more
detailed, with interactive
elements, videos, reviews, multiple images, and complex code running in
the background, doing
everything from managing e-commerce experiences to measuring consumer
behavior. As a result,
the term “hit” is now irrelevant as a measure of web traffic, as your computer now communic
ates
with web servers multiple times even to access today’s simplest sites. To this day, many
outside of
marketing refer to website visits as hits, much to the chagrin of analytics practitione
rs. You may
hear this term; now you know why not to use it!
As the web grew more sophisticated, so, too, did tools to measure consumer behaviors online.
The first web analytics tools debuted in 1995, providing aggregated data on how many visits a site
received, what pages were most popular, and how users behaved on a site. These tools grew in
sophistication over the years. In November 2005, Google launched a free tool, Google Analytics,
which made it possible for website owners to track their traffic without purchasing any software.
From that point onward, analytics quickly became a key part of digital marketing activities, grow-
ing along with the development of digital marketing itself.
Quantitative and Qualitative Data
There are two major kinds of business data: quantitative and qualitative. Both are important in
marketing analytics.
Quantitative data is data based on numbers. It can be weekly sales figures, the number of cus- quantitative data
tomers to walk into a store each morning, or the number of visits to a website each year. Any Data based on numbers.
measure of success, consumer interest, or other information that can be stated as a number is
quantitative data. This includes percentages, such as the percentage of market share for each com-
petitor in an industry.
Qualitative data is data in the form of text, images, videos, other creative materials, or inter- qualitative data
personal interaction. It can be something a person said in a focus group, social media posts about a Data in the form of text,
brand by influencers, or email notes from satisfied customers. Qualitative data adds depth and images, videos, other
nuance to the information available for business decisions. Not everything in marketing can be pe dace
explained with numbers only. It’s important for brands to listen to what customers say, understand
their competition in detail, and gain a full picture.
Traditionally, marketers have depended on qualitative data, such as focus FIGURE 1.1 Differences Between
group feedback, customer surveys, and the field observations of their sales teams. Quantitative and Qualitative Data
These data were the bedrock of understanding customers. Since the arrival of the
World Wide Web, and the large amounts of data generated by digital channels, ee
qualitative data has been eclipsed by the power of quantitative data. In this book,
we will address both qualitative and quantitative data. The main focus is on mar-
: 1 > Numbers
keting data from digital channels, such as email and web traffic. By its very * Sales Figures, Website Visits
nature, most of this data is quantitative. For example, every time an organization
sends out a newsletter, if they use any popular email service provider, they can Qualitative Data
see how many people opened the email, how many clicked on links contained in
> Creative Materials
the email, and how many people forwarded the email to their friends. All of these
e Social Media Posts, Customer Reviews
numbers are quantitative data. Quantitative data also forms the basis of predic- '
tive modeling, which is becoming an increasingly important tool for many companies. Using
predictive modeling, analysts can look at past behaviors of consumers and entire markets and pre-
dict what they might do in the future. Quantitative and qualitative can also go hand in hand. In
many companies, quantitative data is seen as the gold standard, often because it's easier to mea-
sure. However, qualitative data often offers a critical perspective that numbers alone cannot.
can shed
Information that can be gleaned from qualitative reports, such as customer interviews,
further light on data from quantitative sources, such as email response rates. Taken together, quan-
titative and qualitative data are often needed to understand the best way to market a company.
Let's take a look at how that works.
In this book, we will address both qualitative and quantitative data. The main focus is on mar-
keting data from digital channels, such as email and web traffic. By its very nature, most of this
data is quantitative. For example, every time organizations send out newsletters, if they use any
popular email service provider, they can see how many people opened the email, how many clicked
on links contained in the email, and how many people forwarded the email to their friends. All of
these numbers are quantitative data.
Quantitative data also forms the basis of predictive modeling, which is becoming an increas-
ingly important tool for many companies. Using predictive modeling, analysts can look at past
behaviors of consumers and entire markets and predict what they might do in the future.
Quantitative and qualitative can also go hand in hand. In many companies, quantitative data
is seen as the gold standard, often because it's easier to measure. However, qualitative data often
offers a critical perspective that numbers alone cannot. Information that can be gleaned from
qualitative reports, such as customer interviews, can shed further light on data from quantitative
sources, such as email response rates. Taken together, quantitative and qualitative data are often
needed to understand the best way to market a company. Let's take a look at how that works.
1.2 A Closer Look: LuxeUnique
Phil started his menswear store in 2000, long before the mainstream acceptance of marketing ana-
lytics. His well-tailored suits are popular around the world, with consumers ordering them from
right around the corner and abroad. Celebrities have worn his unique tuxedos on the red car-
pet—in fact, every time a famous artist appears in his clothes, orders skyrocket.
Like many entrepreneurs, Phil has followed his own vision. He designs his suits, tuxedos, and
accessories for people like himself. “I never rely on focus groups or any of that,” Phil said in a recent
interview with a fashion magazine. “I listen to my customers, and I follow my vision.”
June Reilly, his new vice president of marketing, would like to be more systematic in the use of
analytics to increase Phil's market share. “We have a strong, loyal customer base: people who have
been buying your suits for years, who would never think to buy a special outfit anywhere else. But
sales have been flat for the past two years. We need to attract new customers. To do that, we need to
find out what every consumer of menswear wants, including those who are not buying from you
now,’ says June. “In addition, we need to measure the health of the business. How loyal are our cus-
tomers? How engaged is our social media following? Are online sales the way to go, or do people
prefer to shop in our stores? Knowing all of this will help us know how to grow our business.” “Go
for it,” said Phil. “But how can you be sure youre getting the full story? A survey can only tell you
so much. And focus groups are just the opinions of a few people willing to get together and share
their views. I'm not convinced that data will help us solve the problem of flat sales.”
June understands that Phil is skeptical. Data needs to be skillfully collected and interpreted
wisely in order to be useful. If it's collected carelessly, or interpreted without close analysis, it can
mislead a business into making the wrong decisions. The key to using data for an initiative as com-
prehensive as growing Phil's sales is to collect data that Phil and the team can trust. This means
using a variety of data sources.
“We'll look at a wide range of sources,” says June. “We won't rely on just one. Collecting both
qualitative data, like focus group feedback, and quantitative data, like projected sales trends in
menswear, will give us a pretty full picture of what consumers want. We'll be able to feel confident
that the data we collect is thorough enough that we can base business decisions on it.” June crafts
a program to collect a wide range of data, to guide LuxeUnique into a new era of sales growth:
- The social media manager, Eddie, collects all the comments on the last two years of Facebook
and Instagram posts. He uses a text analytics tool to measure the tone of the tweets on ascale
13
from positive to neutral to negative. This is called sentiment analysis. It's a form of qualitative
data that shows how happy customers really are with a brand. He also hand codes this quali-
tative data to show trends, such as preferences for certain fabrics and colors.
He also uses a social media management and analytics tool to look at the reach of Phil's social
media messaging. He gathers data on the geographical areas where their social media posts get
the most engagement. The tool also provides data on what posts get the most likes, retweets,
and shares, and whether direct messages to Phil's social media accounts are mostly positive in
sentiment.
The e-commerce manager, Julie, looks at LuxeUnique’ website metrics. She looks at data on
how many total visitors come to Phil's website, how many visitors make a purchase, how they
find the site online, and how long they spend browsing products online. June is very impressed
that all of this data is available about the website.
The team further looks at metrics related to their cash register sales, online orders, and cus-
tomer database. They determine how often a typical customer buys from Phil's and the average
value of orders received online versus the average sale in the store.
The team doesn't stop, however, with digital marketing metrics alone. Though an important
part of marketing analytics, the data generated by digital platforms are only part of a brand's vital
measures of success. The team also gathers critical qualitative data:
June sets up a focus group with area people who wear menswear suits and accessories. The
participants are people who have never bought from the company before. She asks for their
candid opinions on fabrics, styles, and prices. She asks what would encourage them to shop at
Phil's.
Her team conducts a survey of Phil's current customers. In the customer survey, she asks the
same questions as she does in the focus group, to compare customers’ answers with those of
people who don't currently shop at the stores. In addition, she includes Net Promoter Score
(NPS) questions—a special type of customer survey question that asks whether customers
would recommend a vendor to a friend. Well learn more about NPS in a later chapter. It's
important to June to ask NPS questions because high NPS scores are associated with company
longevity. June wants to know about the overall health of the business, and since NPS is one
metric of goodwill on the part of current customers, she considers it a critical metric for any
business that seeks to grow.
The business operations team purchases an analyst report on sales growth and key trends in
the men’s fashion industry. Analyst firms are companies that do independent research on spe-
cific industries. They gather both quantitative data, such as economic forecasts on the demand
for a given product, and qualitative data, such as expert opinions on an industry. These reports
are often valuable for their comprehensive scope and objectivity.
FIGURE 1.2 Analytics Activities in a Typical Week for a Business Marketer
Set up focus group
Conduct customer survey
Conduct industry analysis
Conduct sentiment analysis
Analyze the reach of social media messaging
Evaluate website metrics
Analyze sales, consumer, and other related

metrics
“This data is really compelling,” says Julie. The data shows that Phil's customers are loyal,
recommending the brand enthusiastically to their friends. They care about trends, commenting
actively on social media about their favorite fabrics, styles, and colors. The team can even see what
types of suits get the most attention on social media.
When it comes to e-commerce, they learn from the data that customers find LuxeUnique by
searching online, or via social media posts. But, they find, these online customers do not spend as
much as shoppers in their stores. There is good news, however: in the past six months, though over-
all sales have been flat, online sales have grown by 30%. And most of these online sales come from
new customers who found the brand on social media.
This data gives Julie many ideas for how to grow Phil's sales. Maybe Eddie, the social media
manager, should post more often to Instagram, given that social media posts have driven a lot of
new sales. Asking loyal customers to share the company’s content with friends might help too. After
all, almost all of the existing customers said they would recommend Phil's to a friend. The ana-
lyst report says that practical fashions will see strong sales next year. Maybe it's time to expand to
a more practical fashion line, attracting new customers. And we know that customers are search-
ing via Google and other search engines for such fashions, so it's important for the company to be
seen online. That means new ads, improvements to the website, and other ways of increasing the
company’s online visibility. Collecting all of this data took time, but it has paid off in new ideas for
business growth.
June presents all of this data to Phil. “Wow, this is truly useful data on what our customers like,
what they do, how they feel about us, and their shopping behaviors. It will really help us keep their
business. It's also so good to see ideas for getting new customers that are based on credible data.
Let's try the strategies you developed. Because you based them on all this well-researched data, I
feel confident in the ideas.”
June and the marketing team are excited to try their data-driven ideas. They will start creating
more social media posts to drive sales, develop a new practical fashion line, and start a customer
loyalty program that also incentivizes customers to recommend Phils to their friends, rewarding
customers with $25 coupons for every referral they make. “I can't wait to see the results of these ini-
15
tiatives,” says June. Thanks to her team's new ability to use data, they will be able to measure these
results more accurately than ever. “It's a new, data-driven era for LuxeUnique. Here's to using data
to drive business growth.”
1.3 Analytics and the 4Ps

Data is so critical to marketing today that its use is essential for all of the classical 4Ps of marketing.
4Ps of marketing
Every aspect of marketing is fast becoming data-driven. In this book, you will learn about all the
ways in which numbers measure, guide, and structure marketing activities. When it comes to the The four core aspects of
marketing, according to
4Ps, here is a brief list of some of the ways metrics guide success: traditional models:
product, pricing, place,
Product: Marketing analytics helps product managers determine what new products to and promotion.
develop, what product lines to extend, and which products may be nearing the end of their lifecy-
cle. In addition, user experience and other allied occupations use extensive data from consumer
testing to optimize products to ensure a strong reception in the marketplace. New product devel-
opment is highly dependent on both qualitative and quantitative research. Optimizing product
launches is built on research on the size of potential markets, the types of consumers to whom
products appeal, and other marketing metrics.
Place: Distribution channels are based on numbers. Companies determine their products’ dis-
tribution based on costs, revenues, and consumer acceptance of different channels. For instance, a
company may find that it makes higher gross margins when it sells directly to the consumer via
their e-commerce site. However, after factoring in the cost of advertising to drive consumers to that
site, the company finds that distributing its product to stores via wholesalers, though it may pro-
duce lower gross margins, saves them 50% of its advertising cost, which is now borne by the retailer.
Such calculations are critical to determining the most effective distribution channels for any prod-
uct. Marketing analytics again plays a crucial role.
Pricing: Pricing models are perhaps among the oldest applications of math to marketing.
Indeed, the development of such models predates the use of the term “marketing analytics.” Opti-
mizing pricing to both secure market share while ensuring profits requires a range of calculations,
skilled application of standard models, and, often, consumer research. Many companies get started
using analytics by calculating a product's ideal price.
Promotion: Nowhere is analytics seeing more extensive applications than in promotions. After
all, when most people think of marketing, what they are really thinking about is promotion: adver-
tising, websites, emails, billboards, and other promotional activities that initially attract customers
to a firm and then keep them loyal. Return on advertising spend is just one of the many statistics
that help determine how much a company spends on advertising and other promotions, on what
channels they do their spending, and to what set of targeted consumers.
FIGURE 1.3 The 4Ps
Product
Pricing Promotion
Most of this book will focus on the promotions aspect of marketing analytics. It is where most
companies are focusing new initiatives, and what most employers mean when they seek candidates
versed in marketing analytics. It's the area of most interest to the majority of marketers and where
we will spend most of our time. We will learn the tools, activities, and goals of analytics as they
apply to promotions. We will also briefly discuss the application of analytics to the other three Ps,
in particular pricing and product development.
Uses of Analytics
With data becoming the cornerstone of many business operations, marketing analytics specifically
are increasingly used throughout organizations. Data on sales may lead to new product devel-
opment. Data on customer service can lead to reduced customer wait times and improved store
service. Data from web traffic can lead to an entirely new website design. Importantly, measuring
marketing results determines the budget for future marketing programs. Throughout the market-
ing organization, data is used to do the following:
¢ Set and optimize budgets
« Identify the best channels for reaching target customers
Determine who those target customers are
Design webpages and creative materials
Estimate the potential market for new products
« Determine new product features
e Incentivize sales teams
Create better marketing results
Marketing analytics are needed throughout the organization. Most activities in sales and mar-
keting benefit from clear measurement of results and desired outcomes. In this way, being a
17
marketing analyst is among the most critical jobs in marketing today,

contributing greatly to com-
pany revenue.
Who Does Analytics?
Marketing analytics jobs are as diverse as the sources of business data. Many creative marketers
are now also using metrics to measure the impact of the advertisements, videos, websites, marketing manager
and
other creative materials they design. Often, the marketing manager or director of marketing (a Mid-level leader of
marketing in many
senior or lead marketer) is responsible for metrics alongside their work in managing actual market-
organizations.
ing efforts. Today's metrics tools often include easy-to-use interfaces that require no special
technology skills or mathematical aptitude—just training in how to set up measurement systems director of marketing
and analyze results. Marketing analytics is as much a business strategy discipline as it is a technical Senior-level leader of
or mathematical one. Indeed, many of the same tools that marketers use to perform everyday mar- marketing in many
keting tasks have metrics dashboards built into the tool, so the person doing the marketing work is organizations.
also the person measuring the results.

On the other hand, some large organizations have dedicated marketing analytics teams that
employ groups of data scientists. These scientists mine complex datasets to discover market trends,
predict consumer behavior using sophisticated algorithms, and even design machine learning
systems that allow computers to respond to consumer actions automatically. Even smaller organi-
zations can access such services by contracting with vendors that offer complex data science tools
and services.
Most marketers today need to understand data. As the volume of data available to companies
keeps growing, it’s being used throughout organizations. Jobs involving marketing data are becom-
ing more specialized. While marketers will commonly need to master the concepts in this book,
students interested in data science will find many applications for the most sophisticated data
analysis and application in marketing-related roles, as well. Everyone in a modern business orga-
nization uses data, while, at the same time, the number of highly specialized data jobs involving
complex tasks is also growing.
Analytics Across the Organization

Just as most marketers use data in their jobs, organizations are also becoming more comprehensive
in using data across the organization. One challenge that we will discuss in depth in Chapter 2 is
the phenomenon of data silos. Traditionally, departments in an organization collected data based
on their own needs. A sales team may have logged quarterly sales, while accounts payable tracked
outlays on various company expenses. This departmental data remained within the group that cre-
ated it, creating what we call data silos: data that is collected in isolation, and not shared with other
groups, much the way grain is contained in a farm's silo. This siloed data has been the norm within
companies for decades.
Today, as businesses discover the value of data in making business decisions, they are also real-
izing that the best decisions come about when decision-makers have access to all important data.
A marketing team may need to know the cost of store furniture, for instance, when factoring in
whether to build a store in an attractive new shopping center. In the past, a marketing team may
have recommended expanding to new store locations based only on potential sales in that location.
Now, thanks to a deeper understanding on the value of interdisciplinary data collection, they may
ben-
also factor in costs in a more sophisticated way, to make a more meaningful decision. Another
a
efit of sharing data across the organization is that it gives employees in different job functions
of
better understanding of each other's jobs. Marketing teams come to appreciate the hard work
accounting teams, while finance starts to see marketing for what it is, a driver of revenue, rather
than simply another cost. In this way, data offers the secondary benefit of increasing organizations’
cooperation. By encouraging workers to collaborate on data, it can also allow fresh perspectives on
every department's work, which can lead to more creative innovation.
Breaking down silos is the term used to describe the process by which siloed, departmental
data becomes available across an organization. In large organizations that have been collecting data
the traditional way for decades, breaking down these data silos to share data can be a major effort.
In this new data-driven economy, small, nimble organizations that have never siloed their data can
have an advantage.
From Data to Decisions
Breaking down silos is one thing. What organizations do with all the un-siloed data is how they
truly gain competitive advantages.
analysis paralysis Another challenge with the complexity of today’s data is “analysis paralysis.” This is the phe-
The phenomenon when nomenon when companies have so much data that they become overwhelmed by it. This is often a
companies have so much result of disorganization. Data collection may be poorly organized, or data may be presented with-
data that they become out structuring it properly. For example, a retail store may have years of sales data, amounting to
overwhelmed by it.
millions of data points. Presenting this data as a simple spreadsheet of millions of lines is not likely
to be useful to the typical user. However, organizing the data into a line graph showing seasonal
growth in sales makes this complex data useful by making it easy to understand. Sometimes, all
that is needed to make data actionable is to organize it for clarity.
At other times, analysis paralysis sets in because of competing interpretations of data. There
may be a lot of data but insufficient differences between one dataset and another, making it
unclear what course of action to pursue. For instance, let’s say that Store A had 1% more sales in
January compared to Store B. In February, Store B is the winner, with 3% more sales than Store A.
How should a business interpret these results? Should they close Store A? Expand Store B? Is the
difference in sales really significant between the two stores enough to make a decision based solely
on this data? Often, companies collect data as part of their operations, then try to use it to make
decisions. Such data may not point clearly to decisions, making it difficult to act. It is often this type
of unclear data that leads to analysis paralysis.
In addition, sometimes data is not truly analyzed at all before being presented. At such times,
companies examine raw data and strive to see patterns in complex information. The first step in
analyzing information is to describe it. An analyst may present charts to an executive team saying
that sales have grown 10% over the last three quarters. That information is useful in itself. However,
it doesn't tell us what is leading to increased sales. The company would like to know what activities
have led to this success so that they can replicate the successful efforts for even more sales growth.
This is why it’s important to analyze data for insight. Looking beyond mere description, analysts
should look for the “why” behind phenomena. They should look to provide answers rather than
simply describing facts.
In this book, you will learn how to collect data with a clear purpose, analyze the data that
already exists, and capture insights from many datasets. When data is collected purposefully, ana-
lyzed with goals in mind, and presented clearly, analysis paralysis often subsides.
1.4 How to Use This Book
This book is designed for undergraduate students, graduate and professional studies participants,
and marketers working on their own who wish to gain a deeper understanding of how to create
effective analytics programs, or use analytics effectively, in their own work. The book is designed
to provide both comprehensive views of specific ways of using marketing analytics within a busi-
ness organization and of the many different common types of channel analytics. It's designed for
marketers at all levels, from individual contributors to managers. In addition, it's meant to provide
guidance for those working in specific areas of marketing, such as social media, search, or email
marketing.
With this guide, you can learn both the tactics and the strategies that will help you become an
effective data-driven marketer.
Channel-by-Channel
The heart of this book contains chapters on the most common marketing channels in use today.
You will find a chapter on how to use metrics in social media marketing, how to optimize your web-
site using web analytics, a key topic for all companies, and how to use email marketing metrics to
drive results. Whether you are new to these channels, or an advanced user from the creative or
strategy side, these channel-specific chapters will give you the guidance you need on how to lever-
age the data generated by the tools you use.
FIGURE 1.4 Marketing Channels

Marketing channels today work together, and thus should be analyzed together.
Social
Media
Web
internal & External
Data Analytics Analytics
In addition, these chapters will show how the metrics from one channel can be used in con-
junction with those from other channels to drive even greater business results. For the marketing
generalist, working through all of the chapters will help you understand deeply how metrics can be
used to optimize all of the channels for which you are responsible. For those who specialize in one
or more of the channels, the chapter on your area of expertise will provide you with a deep dive on
the metrics you will want to use every day. The chapters on other channels will give you ideas on
how to use cross-functional metrics to drive more results, put your own work into deeper context,
and collaborate more effectively across your organization.
What if you are new to marketing? Youre taking a marketing analytics course as part of your
undergraduate education and are just getting to know the field. Marketing is more data-driven
than ever. Learning to see all marketing efforts through the lens of data will empower you to be
more creative, more systemic in your thinking, and more effective as you emerge in this exciting
field. Becoming a data-driven marketer from the beginning will give you an edge as a practitioner.
This is a time of significant change in marketing, and those who are knowledgeable about data will
be at an advantage in hiring and at work.
If you are an experienced practitioner, you will find the case studies will both validate what
you already know and provide fresh ideas for your own work. The citations at the end of each chap-
ter will provide you with additional reading, and the questions will allow you to reflect both on the
text and on ways you can optimize your own work with data. Visualizations and the Do the Math
feature will give you useful materials to inspire presentations to management, shortcuts to making
critical calculations, and a focus for discussions with your team. Use the chapters on channels out-
side your main area of interest to be able to ask better questions of colleagues who are responsible
for other marketing channels in your organization.
If you are new to marketing, pay close attention to the main text in each chapter. These contain
all the key concepts, terms, and information you need to understand the subject. Read each case
study a couple of times and discuss it with classmates. They bring the concepts to life and provide
a “sneak peek” at what the day-to-day of a data-driven marketer is all about. Remember to reflect
on the questions, so that you solidify the concepts. They may come up as interview questions for
your next job—companies increasingly want to see that any marketer, even those in creative roles,
are able to think effectively with data. The channel-by-channel chapters will also help you better
understand the roles within a marketing organization. You'll get a sense not just of analytics, but of
the whole workflow of an effective modern digital marketing program.
A Closer Look and Case Studies
Each chapter includes several fictionalized vignettes based on common analytics activities, called A
Closer Look. Throughout the book, you will also find case studies that look at how one organization
drove impressive results using analytics in their marketing. The case studies are in-depth stories of
real-world marketers. They are designed to be as inclusive as possible, showing the range of orga-
nizations that are doing digital marketing. You will find case studies from Fortune 1000 companies
and cutting-edge startups, nonprofits, and small businesses. You'll learn about analytics from the
perspective of the solo marketing practitioner wearing multiple hats in a “department of one,” as
well as the work of dedicated marketing analytics departments that span hundreds of locations in
a global enterprise.
Look at these stories as both an inspiration and a look at the practicalities of work in an emerg-
ing field. There is currently no one right way to deploy marketing analytics. Instead, companies
are adapting best practices to the norms of their industries, their growth goals, and the resources
they have available. The pathfinding marketers featured in the cases are creating new best prac-
tices from which other professionals can learn. But by no means are theirs the only perspectives.
As you read them, think about how your own experiences align with what is said—and how you
approach similar activities. If you're new to marketing, understand that taking a critical approach
21
to case studies is key to learning. Each chapter concludes with a list of questions, including
some
on the case studies. Classes can use each case as a starting point for debate and further exploratio
n
of how to solve marketing challenges with data. The cases present an opportunity to apply the
concepts from the chapter to real-world scenarios. They also present a resource of approaches to
common data analytics needs faced by many organizations, providing practical, inspiring advice.
Do the Math
Within each chapter, you'll find one or more Do the Math sections. These quick introductions to
basic formulas used in marketing analytics will guide you step-by-step through the most common
calculations marketers need to know, such as how to determine the return on advertising spend.
You do not need to be an expert in statistics to do marketing analytics, and you do not need a sta-
tistics background to do any of the exercises in this book.
The Do the Math sections simplify business math for marketers, breaking down the details of
all the major statistics discussed in the book. In clear, simple terms, illustrated by examples, they
show you how to figure fundamental numbers that will show you the results of your promotional
campaigns and demonstrate the value of marketing to your organization. A comprehensive list of
formulas is also provided as an appendix to the book.
Questions and Activities
Questions for discussion at the end of every book provide you, your classmates, and your instructor
an opportunity to go deeper in exploring all the key concepts in a chapter. Questions may be
assigned as discussion questions in class. Going through the questions provides you with the
opportunity to solidify what you have learned, taking the applications further into real-world, mod-
ern uses of marketing analytics. You can use the questions as study aides, to help you apply the
concepts to your work, and as a path to conducting your own readings on the subject. Activities
provide an opportunity to analyze specific issues in depth. They allow you to apply your learning
to real-world scenarios.
Activities are all based on real activities and challenges in marketing today and provide you
with insights on how the concepts from each chapter apply in today’s business world.
1.5 Core Concepts in Marketing

Analytics
to
As you start your journey of learning marketing analytics, several core concepts are important
know. These are foundational ideas that make up our understanding of how to measure marketing.
Here are the
You will see these terms come up a lot in this book. Let's learn their definitions now.
core concepts that you need to know as you start learning marketing analytics.
FIGURE 1.5 Three Core Concepts in Marketing Analytics
Key
Performance
indicator
Return on Return on Ad
Investment Spend
Core Concepts
in Marketing
Analytics
Return on Investment
When companies start to think seriously about their marketing analytics programs, it’s often
return on investment
(ROI) because they have invested considerable resources in promotional campaigns without a clear sense
of the investment's ultimate impact on revenue. Calculating the return on investment (ROI), of
The percentage of return
an organization sees from marketing is the focus of many companies’ efforts at measurement. As we have discussed, metrics
its investment in an can have a positive impact on all of the 4Ps, from pricing strategy to product development. Calcu-
activity, such as lating marketing ROI, however, is seen by many companies as having the clearest impact on
marketing.
company revenues. United States companies alone spent $240.7 billion on advertising,” so deter-
mining this large investment’s impact on income is vital. Marketers are seeking ever more
sophisticated ways to determine the impact on their organizations’ bottom line of every dollar
spent on advertising.
In this book, we will look at marketing analytics for all types of organizations. While the main
focus is on for-profit companies, nonprofits in the U.S. account for more than a trillion dollars in
economic activity annually.” This means that nonprofits are a linchpin of the global economy, and
as their importance remains steady, the sophistication of their marketing has grown. We will be
looking at marketing for nonprofits as well in this book, examining how they measure success.
Metrification of ROI for nonprofit marketing is no less critical than it is for for-profit companies.
Indeed, it can be much more important, as charitable donors examine carefully the amounts spent
on overhead activities such as fundraising promotions in contrast to funding provided directly to a
charity's beneficiaries. Measuring ROI for nonprofits often has the same goals as it does in the pri-
vate sector: ensuring that every dollar spent on marketing drives impact. However, how “impact” is
defined will, of course, vary, depending on an organization's outcomes. Where the for-profit sector
aims at profits, nonprofits aim for awareness of specific issues, aid to those in need, or addressing
global challenges, and they often spend money on marketing to address those goals. Thus, while
23
the goal of measuring results is often the same, the types of

results measured vary. In this book, we
will cover both for-profit and nonprofit measures of perform
ance.
It can be said that all of marketing analytics is the measurement of
marketing’s ROI. It is the
foundational concept that you need to know to get started
with marketing analytics.
FIGURE 1.6 Core Concepts in Marketing Analytics
Key Performance
Indicators (KPis)
Return on Return on Ad
Investment (ROI) Spend (ROAS)
Core Concepts
Marketing in Marketing Conversions and
Funnels Analytics Micro-conversions
Clickthrough Marketing
Rate (CTR) Optimization
Key Performance Indicators

Key performance indicators (KPIs) are among the most critical tools in the marketing analyst's
key performance
toolbox. A KPI is any value that indicates the performance of an organization or activity. For indicators (KPIs)
instance, for most companies, sales are an important KPI. The volume of sales indicates the poten-
Any value that indicates
tial revenue of the business, the speed of its growth, and the size of its market. A KPI is not a the performance of an.
number: it is the thing that the numbers will measure. Think about your height. It’s the key indica- organization or activity. For
instance, for most
tor of how tall you are. You could be 5 feet tall, 6 feet tall, or any height. That would be the measure
companies, sales are an
of your height. But the indicator of how much vertical space you take up is called your “height.” It important KPI. The volume
is the item that is being measured by a number, such as “5 feet.” of sales indicates the
potential revenue of the
People often confuse the term KPI with the metrics that measure KPIs. Sales are a KPI—they business, the speed of its
are a performance indicator. For a nonprofit, the amount of donations or the number of volunteers growth, and the size of its
market. A KPI is not a
attracted by a campaign may be the key performance indicators. They are activities that are impor- number; it is the thing that
tant for the organization to measure, in order to gain information on how well the organization is the numbers will measure.
doing. Those are key performance indicators.
Establishing KPIs is the first activity of a well-designed marketing analytics program. Compa-
nies need to agree on what types of things need to be measured. Some activities, though important,
do not need to be measured as closely as more critical ones. For example, a team may decide they
need to closely measure the volume of sales generated by marketing each quarter. That value, vol-
ume of sales created by marketing, becomes a KPI. On the other hand, they may decide it's not that
important to measure how much paper the sales department uses each week, or amount of time
it takes to proofread the company newsletter. Those are not critical metrics right now. They do not
become KPIs. Often, marketing works in close collaboration with executive management to deter-
mine the right KPIs to measure.
It's also common for different functions within an organization to measure different KPIs. A
social media team may measure a range of KPIs related to social media's performance, such as likes
per post and the number of retweets. However, the CEO may not need to know this information.
The KPIs used at different levels of the organization will be related to which employee or team
needs to know what information.
Return on Ad Spend (ROAS)

Another key metric important to the majority of marketers is return on ad spend (ROAS). This is
return on ad spend
(ROAS) just what you might expect it to be: a calculation of the amount of revenue generated by sales that
are attributable to advertising, divided by the cost of the advertising.
A calculation of the
amount of revenue Return on ad spend is calculated as a multiplier, obtained with this formula:
generated by sales that
are attributable to
advertising, divided by the
(Revenue from ads — cost of ads) / cost of ads
cost of the advertising.
For example, let's say LuxeUnique spends $8,000 a month on shoppable Instagram ads. Purchases
made from those ads total $56,000 in that same month. The ROAS can be calculated as follows:
(56, 000-8, 000) /8, 000 = 48, 000/8, 000 = 6,

meaning that the brand earned back their $8,000 shoppable ad investment sixfold.”
View in the online reader
Where return on ad spend (ROAS) gets complicated is in attributing sales to advertising cam-
paigns. As we will see in Chapter 2, it is often difficult for brands to connect any given sale to
a specific ad. Think about your own exposure to advertising throughout the day. You may see a
poster for an upcoming movie at the bus stop during your morning commute, then later, hear about
the same movie on the radio. A friend might mention seeing an ad on Facebook for the film. Eventu-
ally, you decide to go check it out. Which ad can be given the credit for inspiring your purchase of a
movie ticket? All of them? The last ad you saw? The one mentioned by a trusted friend? You can see
that attribution of sales to ads can be complex. For this reason, ROAS doesn't focus on the ROI ofa
specific ad or even a campaign. Instead, it broadly calculates a company’s spending on advertising
over a given time period in comparison to revenue over that same time. Even so, it can be an inex-
25
act measure. Whatever time period marketers choose for calculating ROAS, sales occurring
in that
time period may have been at least partially inspired by advertisements seen by consumers before
that period. Despite these limitations, ROAS is an extremely valuable metric. In fact, its value lies
precisely in how general it is. It gives a big-picture overview of how effective advertising is, over-
all, in driving revenue growth. It's meant to measure the value of a company’s total investment in
advertising.
Conversion
Companies are in business to create revenue; nonprofits are in business to further a mission. In
both cases, to make profits or effectively support a mission, organizations have a target audience
whom they must engage in performing critical activities. Companies need customers to buy from
them in sufficient numbers to stay in business. Nonprofits need sufficient numbers of donors, vol-
unteers, and supporters.
A conversion is any desired action by which a member of an organization's target audience conversion
helps further the ultimate goal of the organization. For a company, a conversion is a sale. On an e- Any desired action by
commerce site, for instance, when a customer completes a purchase, that is called a conversion in which a member of an
organization’s target
the language of marketing analytics. On a nonprofit's site, a conversion may be a donation, a
audience helps further the
request for aid by an intended recipient of the nonprofit's services, or a signature on a critical peti- ultimate goal of the
tion. A conversion is when a company makes a sale or when a nonprofit receives a desired organization.
important action.
Many organizations also refer to important steps on the way to a sale as conversions. For
instance, a software company may consider it a conversion when a prospective customer signs up
to try the software free for a month. Customers may not have purchased at the time they sign up
for their free month; however, they have clearly entered into a business relationship with the firm.
That means that a sales opportunity is likely. This type of action, too, can be a conversion.
Let's take a deeper look. Wingco is a seller of software for retail-store cash registers, also known
as point-of-sale (POS) systems. Margery Smith, their CEO, recently spoke at a business conference.
Her talk was on the importance of having up-to-date software for retail stores. After her speech,
several retail store owners gave Margery their business cards, asking for her to come to their offices
and demonstrate her software. Margery demonstrates her software to more than twenty retail
store owners over the next month. Half of them sign up to try out the software in their stores.
Wingco's vice president of marketing, Chad Wynn, considers these trials to be conversions from
Margery’s effort to market Wingco by promoting it at major business conferences. It takes some
time to set up new POS software, so signing up for the free trial represents a significant commit-
ment to consider Wingco. This qualifies these trials as conversions.
oO
Micro-Conversions
A micro-conversion is any desirable action that is not a true conversion, in other words, not a sale
micro-conversion
or other definitive act of doing business with an organization. It can, however, be a leading indica-
Any desirable action that is
not a true conversion, in
tor that a sale or other conversion will happen.®!
other words, not a sale or
other definitive act of doing
business with an Examples of Micro-Conversions
organization. It can,
however, be a leading
indicator that a sale or For instance, let's look at a fashion retailer that has an extensive following on social media. It posts
other conversion will each season's looks on its Instagram, as well as working with influencers to convince consumers to
happen. try its newest styles. Every once in a while, it provides an offer to influencers to share with their
followers: click through on a special link exclusively for an influencer's followers, sign up for the
fashion brand's newsletters, and receive a coupon for 20% off your first purchase. A consumer may
sign up for the newsletter in response to the offer, yet not buy anything right then. However, the
fact that customers took the time to sign up for the offer is a strong indicator of their interest in
the brand. This is a micro-conversion. A consumer takes some action that shows a preference for a
brand, while not yet doing business with the firm. It is then up to the firm's marketing team to keep
micro-converting consumer engaged, ultimately convincing them to convert.
Micro-conversions can take many forms. Many consider following a brand on social media to
be a micro-conversion—after all, it indicates some loyalty to the brand. Other micro-conversions
include signing up for a company’s newsletter, downloading an ebook or other premium, watching
a long livecast, or sharing a company's content. All indicate an interest on the part of a consumer.
They are all part of the marketing funnel.
Marketing Funnels
The marketing funnel is the series of steps by which a member of the public becomes a brand's
marketing funnel
customer. Consumers may start with micro-conversions, such as following a brand on Instagram.
The series of steps by
which a member of the The brand then proceeds to nurture the relationship: providing interesting content, special offers,
public becomes a brand’s or personal outreach. Consumers then are said to move through the funnel, becoming increasingly
customer. engaged with the brand until they ultimately make a purchase.
oO
The
Marketing
Funnel
Explained
A typical marketing funnel can look like the following.

1. Awareness: Potential customers becomes aware of a brand, through promotions or word of
mouth.
2. Interest/Engagement: Potential customers indicate interest by engaging with the brand. They
may follow the brand on social media, subscribe to an email newsletter, or visit a store. The
brand becomes aware of this consumer interest and engages the consumers further.
3. Consideration: Now, prospective customers start thinking about making a purchase of the
brand's products. They may read other customers’ reviews, enjoy a free sample of a consum-
able product, or try out products in the brick-and-mortar store.
4. Intent: At this stage, customers make up their minds. They determine whether they will pur-
chase a product or not. If shopping online, this is the stage at which they put a product in their
shopping cart. If shopping in a store, this may be when they are trying on a garment or testing
a new electronic item and feel satisfied that the product meets their needs. It fits well, if it's
clothing, for instance, or it has the right features, if it is a tech product. The customer has made
their decision to buy. If they don't want to buy, this is often the stage at which they decide that
too. The intent stage is often referred to as the “moment of truth.”
5. Evaluation: As customers complete their purchases, they take a last moment to decide
whether the product is truly right for them. At this stage in the funnel, customers may still
decide not to buy, which is why it’s an important part of the funnel to analyze with data. In
fact, as we will learn later, in many buying situations, it's typical for most purchases to be
abandoned before money changes hands. Close scrutiny of consumer actions throughout the
funnel can minimize drop-off at different stages, thereby maximizing the ROI of advertising
money invested in attracting consumers into the funnel in the first place.
FIGURE 1.7 The Sales Funnel
Awareness
Interest/Engagement
Consideration
Intent
Let's go back to LuxeUnique. The company’s current marketing funnel is fairly straightfor-
ward. Marketing analytics provide data on every step of the funnel, as well:
1. Awareness: Customers become aware of Phil's company. They may do so through social media
posts by or about his famous customers. Or they search using a search engine for “men's suits,”
“menswear” or similar items. The web search shows them LuxeUnique as one of the results,
and they click on the link, taking them to the site. Or they hear about the quality of his suits
from a friend who is already a loyal client. Knowing all of the different ways in which a cus-
tomer becomes aware of a brand are important because they indicate the most productive
marketing channels for a brand. Marketing analytics tools provide data on how customers find
out about a brand.
. Interest/Engagement: They see web search results related to the brand, social media posts, or
other online materials. They find these search results or other information interesting enough
to think about buying products from the brand. At this stage, they may also go to LuxeUnique’
website and learn more about the product. Tools specific to each marketing channel show how
much interest is being generated on each channel. For instance, an advertising tool will show
how many clicks a specific ad receives.
. Consideration: At this stage, customers are actively shopping on the brand's website, or trying
on clothes in one of its stores, looking to make a purchase. Web analytics tools, a kind of mar-
keting analytics tool that measures website activity, provide data on what visitors browse once
they are on a website. In-store behavior is more challenging to measure but can be monitored
via customer surveys, sales teams’ observations, or data tied to consumers’ mobile phones as
they move around the store.
. Intent: Customers decide to make a purchase. They like the fit, style, and fabric. At this stage,
they may still change their minds before buying. The same tools used to measure consumer
activity at the consideration stage can measure consumer behavior at the intent stage.
. Evaluation: Customers make their final decision to buy or to abandon their shopping cart, not
buying. Web analytics tools again provide extensive data on e-commerce transactions, as do
other marketing data tools explored in this text. Point-of-sale systems provide data on in-store
sales.
29
Measuring the marketing funnel is a key activity for marketing analysts.

It's important for a
firm to know how many consumers appear at the top of the funnel, in other
words, expressing ini-
tial interest. How consumers are acquired into the funnel, and what they do once
in the funnel,
must be precisely measured if a firm is to remain profitable.
It's natural for consumers to drop off at every stage of the funnel from initial interest. Not
every person who walks into a store will stay to buy. Similarly, not every consumer who goes online
to shop will make a purchase. Indeed, research shows that 74% of all online shopping carts are
abandoned before the consumer checks out. Brands thus also need to measure how many con-
sumers are dropping out before they buy at every stage of the funnel. Measurement of different
efforts to keep consumers in the funnel, comparing, for instance, discounts versus loyalty pro-
grams, is another key benefit of using analytics.
Marketing Optimization
Marketing optimization is the science of making marketing activities as effective as possible at
marketing
driving conversions. It relies on metrics to measure the effectiveness of different, closely related
optimization
marketing efforts in order to determine which effort is most successful. Marketing optimization
The science of making
puts data to work in the short term to increase results from campaigns, digital media, and websites. marketing activities as
It is typically used in conjunction with testing different creative treatments or offers." For instance, effective as possible at
let's say a barber shop wants to see whether it gets more web traffic if its social media ads have driving conversions.
images of models with the latest styles, photos of the shop's barbers at work, or a mix of both. It can
optimize
test different images to determine which types get more clicks, deliver more traffic to the site, or get
In marketing, producing
more interactions. It can even track which style of graphics leads to more signups on its email list
more of the marketing that
or to their loyalty program. Using these metrics, it can thus optimize, or produce more of the mar- delivers results, often by
keting that delivers results. using data.
For example, website optimization tests different website layouts, designs, or creative options,
measuring which options encourage the most conversions. A web team may test different navi-
gation on a website, different text, even different images. They will then look at the data on how
many consumers clicked on one variation versus another. These tests are called A/B testing when
a single variable, such as changing one picture, is tested. More complex tests that examine multiple
variables, such as both colors and pictures, are called multivariate testing. Any optimization that
aims specifically at increasing conversion rates is called—not surprisingly—conversion rate opti-
mization. Typically, companies with e-commerce sites run many A/B and multivariate tests per year,
testing factors they consider to be important in appealing to consumers. Any aspect of a website,
ad, or other digital media can be tested. Companies often test content. They may test different lay-
out options, such as using larger or smaller buttons for making a purchase. Often, they test offers.
They may provide some web visitors with a “Buy One, Get One Free’ offer, while others may get
a 50% off coupon. The goal is always to see which factors, or combination of factors, lead to bet-
ter sales. Many very large retailers test continuously. If you regularly visit major e-commerce sites,
chances are that you sometimes see special versions of the pages you visit and your clicks, pur-
chases, and other actions are compared to other consumers’ who were shown different designs,
discounts, or products on the same page.
Any optimization that aims specifically at increasing conversion rates is called—not surpris-
ingly—conversion rate optimization. Typically, companies with e-commerce sites run many A/B
and multivariate tests per year, testing factors they consider to be important in appealing to con-
sumers. Any aspect of a website, ad, or other digital media can be tested. Companies often test
content. They may test different layout options, such as using larger or smaller buttons for making
Get One
a purchase. Often, they test offers. They may provide some web visitors with a “Buy One,
Free’ offer, while others may get a 50% off coupon. The goal is always to see which factors, or com-
bination of factors, leads to better sales.
Many very large retailers test continuously. If you regularly visit major e-commerce sites,
chances are that you sometimes see special versions of the pages you visit, and your clicks, pur-
chases, and other actions are compared to other consumers’ who were shown different designs,
discounts, or products on the same page.
Not all optimization is aimed at conversions. Micro-conversions, such as email opens, can also
be optimized. Think back to our discussion of the marketing funnel. Customers engage with com-
panies several times and in many ways before converting. They may click on an ad, see a blog
post by the company, or scroll through their Instagram feed. At all these touchpoints, companies
have opportunities to retain a customer's initial interest. They need to keep that customer interest
through the most effective images, text, offers, and experiences, all the way up until the customer
buys. All of the micro-conversion opportunities presented to customers, to sign up for an email list
or download an app, must be optimal if they are to lead to an ultimate sale. For this reason, success-
ful companies use optimization for all digital activities, not just the point of conversion.
Click-Through Rate (CTR)

One metric you will see over and over in marketing is click-through rate (sometimes spelled click-
click-through rate
(CTR) through rate) or CTR. The click-through rate is an important leading indicator of consumer
behavior. Often, it’s the primary metric for determining whether a marketing effort is a success.
The percentage of users
exposed to a message
who then choose to click
oO
on a message.
The CTR simply measures the percentage of users exposed to a message who then choose to
click on a message. It can be applied to any digital materials where users have the option to click on
a button, text, image, or interactive feature. For instance, let's say our team at Wingco publishes an
ad on LinkedIn, targeting the technology managers of retail stores. The ad emphasizes the benefits
of Wingco software, offering retail store tech managers a sixty-day free trial of the software to see
for themselves. Imagine that more than 1,000 people in the ad's target audience of tech managers
sees the ad. Of those 1,000 managers, 100 choose to click on the ad. This makes the CTR of the ad
10%. Ten percent of people who saw the ad opted to click on it.
CTR can measure clicks on an ad, on links in an email, or even on a website itself. Anywhere
someone can click, marketers can measure it. CTR is a good metric of consumers initial interest in
the materials on which they clicked. It tells us what ads they found appealing, for instance. How-
ever, it does not indicate whether materials were successful in creating sales. Many ads may have
high CTR because they are funny or feature cute animals, for instance. They may result in poor
sales, ultimately, because consumers attracted by a picture of a cute puppy sitting on a car may
31
not be interested in purchasing the car itself. Amusing or dramatic ads often have high
CTRs, yet
result in average or below-average sales. That is because relevancy, attracting customers
who find
the product or service relevant to their needs, is more important than driving traffic.
For this reason, CTR alone is a limited measure of marketing success. It can tell marketers what
images, text, videos, or offers consumers find appealing. That is important. It's vital to place CTR in
perspective by comparing it to KPIs. If a company’s KPI is sales growth, did the marketing effort
with high CTR also lead to higher sales? Looking at CTR in context with KPIs makes it a valuable
metric.
CTR is valuable, taken in context, because it measures immediate consumer reactions, It shows
what promotions attract consumers to the top of the marketing funnel. It can help drive sales
when used wisely. It is an often misunderstood metric. It is easy to measure, popular, and typically
available to marketers on every digital channel. Understanding the effective use of CTR is thus
vitally important.”
1.6 A Closer Look: Optimizing for Our

Top Customers
Back at LuxeUnique, sales are growing. Julie, the e-commerce manager, is wondering about the best
way to present the company’s new line of bowties. Should it show them on models, or photograph
the ties on mannequins, or present them flat, without any staging? “Hmm,” says June, who heads
up marketing. “If we show them on models, people might not relate to very glamorous people wear-
ing the ties. But if the models look casual, the ties might not come across as special. The mannequin
idea might look too basic. How about we just photograph them flat on a plan surface, to show the
fabric?” Social media manager Eddie objects to this idea. From his experience with social posts, con-
sumers want personable images, and those should include people.
Julie has an idea. The team can test different styles of photography for the bowties: with glam-
orous models, casually dressed models, mannequins, and no models. They will set up the website
to serve each customer who visits the online store one version of the site, each with one of the dif-
ferent styles of photography on the bowtie pages. After a month, the team will see which pages,
with which styles of photography, had the most sales. “That way,” says Julie, “The data will tell us
which types of pictures customers like the best.” Using data, the team is able to optimize the pages
to make the most sales. One month later, the team sees that pages featuring casually dressed mod-
els wearing the bowties increased bowtie sales by 20%. This is good news for the team. The use of
data allows them to optimize the design of their webpages for maximum sales.
1.7 From Data to Strategy: Using Data

Sources
Understanding the traffic sources, volume, and behavioral patterns associated with each step in
the marketing funnel is critical to providing an optimal experience to customers. We've discussed,
journeys.
for instance, that consumers use different keywords at different stages in their buying
Key-
Understanding these keywords can help organizations optimize their marketing funnels.
during the
words, after all, are essentially the language that consumers use at different times
purchase decision. Knowing that consumers use the term “accounting software for interior design-
ers” when they first research products can help increase top-of-funnel conversions. If, on the other
hand, once they have been educated on the accounting software market, more seasoned shoppers
use the industry term “service business accounting software,” so companies can then tailor mar-
keting experiences to these consumers who are close to buying. Data on the number of consumers
who search on each term can provide marketers with numbers that inform their understanding of
the marketing landscape. However, the real value in data analytics is in using data to make wise
marketing decisions. That requires taking a broad view, connecting numbers and facts with the
human realities that underlie them. Throughout the book, welll be looking at both types of data
and the big-picture analysis that each data type supports.
Integrated and Data-Drive Marketing

At the heart of modern data-driven marketing is the concept of inbound marketing. Inbound,
developed by Brian Halligan and Dharmesh Shah, founders of Hubspot, is based on the idea that
consumers are best attracted by interesting content and experiences. Examples of inbound mar-
keting include the following:
- Publishing a free ebook on a topic of interest to consumers, showcasing a firm's expertise in
an industry. An example would be a car parts company publishing an ebook on spark plugs to
market itself to car repair shops.
Organizing an event in your sector to attract consumers. An example would be a beauty com-
pany creating a free makeover popup event at a sustainable living fair.
Posting informational videos to a company YouTube channel. Many companies do this. An
example would be a skateboard company launching a series of how-to tutorials with popular
skaters.
Creating templates for consumers to download for free. An example here would be an account-
ing software company creating sample invoices and estimating templates to attract small
service business owners."
Whenever a company provides free information, content, or educational entertainment (“edu-
tainment’), there is a good chance they are engaging in inbound marketing. Not all content mar-
keting is entirely inbound marketing—it can be a part of a more traditional advertising campaign.
However, inbound is, at its core, a content marketing discipline. Where it intersects with data-driven
marketing is its emphasis on continually measuring what content engages prospects. Inbound and
other content marketers spend a large part of their time measuring what materials get the most
clicks, then providing customers with more of the content with which they engage most.
Both inbound marketing and content marketing as a whole are increasingly popular with
companies. These are both data-driven marketing disciplines. After all, you can't create content to
attract consumers without first gathering data on their interests. You also need to measure the
outcomes of content campaigns. Creating quality content is often expensive. Professional writers,
videographers, and designers are needed to create materials that can compete with national media’s
content. This means that companies scrutinize their investments in content marketing closely. A
lot of this data originates as search data. As we have seen, keyword data shows us what topics are
popular among consumers. That data can help identify not only products, but content topics and
experiences in which consumers are interested.
When we look at inbound marketing, it encompasses content, as well as social media and
organic search—all ways to reach consumers outside of conventional advertising. Hence, for con-
tent marketers doing inbound marketing, search data is especially important. It can help identify
whether specific inbound marketing efforts have results in conversions. It can increase search vis-
ibility, help set priorities for new content based on conversions and keyword popularity, and help
with generating new ideas. In the next section, well explore the many ways in which search
data is
important to modern marketing practices.
Creating Actionable Data

As with any analytics effort, there are two steps to using search data for marketing funnel opti-
mization.
The first is to know that the data is, in fact, telling us the story we think it is—that we are
seeing a clear data signal. This can be especially complex when analyzing the marketing funnel,
because at each step of the funnel, many factors influence whether a consumer moves to the next
step of the funnel. Looking at keyword data, we want to be sure it's telling us about consumers’
progress through the funnel. This can start with looking at the behaviors of consumers who orig-
inated using different keywords. Marketers then often need to pair that data with other data on
consumers’ intent. For example, if consumers using one search term are more likely to convert to
sale, and that term is often used in sales conversations by consumers who have been researching
product options for a while, then it's likely that that term is one used by sophisticated, ready-to-buy
consumers. Keyword conversion data, paired with text analysis of sales call transcripts, can show a
positive correlation between consumers who use the term “service business software,” sophistica-
tion about the industry, and propensity to buy.
FIGURE 1.8 Marketing Funnel Optimization

The marketing funnel looks at how consumers find and engage with a brand.
Traffic
Sources
Volume
Behavioral
Patterns
Marketing Funnel
Optimization
step is
Once were sure that our data is providing insight into consumer actions, our second
insights. The useful aspect of keyword data for marketing
to decide what actions to take on those
ad copy, landing page
funnel optimization is that it can guide multiple parts of campaign creative:
offer of a free trial is likely attrac-
content, even offers are suggested by keywords. For instance, an
keyword. At each stage
tive to prospective leads if “accounting software free trial” is a high-traffic
producing marketing cre-
of the funnel, the keywords used by consumers provide a framework for
ative that “speaks the language” of those consumers. Marketers can use keyword data to create a
rich funnel experience, once that reflects the consumer's evolving reality as they progress from
learning about products, to consideration, to purchase. Effective marketers connect keyword usage
to the consumer's mindset rather than seeing them as mere automatic triggers of search traffic.
They then use these clues to customer mindsets to generate the right materials for consumers at
the right time. Let's see how that looks in action.
1.8 Case Study: Impact Hub Boston

Impact Hub Boston is a co-working space located in downtown Boston, it was formed by a diverse
group of members who are entrepreneurs, artists, campaigners, consultants, advocates, and others
with the purpose of creating social impact locally and abroad. Impact Hub Boston provides an
environment for community and action, making it unique and powerful in comparison to other
shared co-working spaces in the Boston area. As the market for shared offices, known as co-working
spaces, started to bloom in Boston, the organization realized quite quickly the need to promote
what makes Impact Hub unique and why people with a passion for social change needed to become
part of this community. Using a range of marketing analytics tools and techniques, the author,
Christina Inge, and the Impact Hub team were able to implement a range of marketing programs.
The first step was to secure higher rankings in search engines, such as Google. Knowing that
the first thing many prospects do when looking for new office space is to search for rentable offices
in the area, being visible in search engines was key. We did some research on the performance of the
current site and our market positioning among our competitors. We started this process by using
MOZ.com, a search engine optimization (SEO) software that provides both free and paid tools to
analyze the performance of a site. We used the free Keyword Explorer Tool to analyze the keyword
rankings of Impact Hub in organic search in comparison to our strongest and most similar com-
petitors. MOZ combined with the Google Keyword Tool, another great free tool by Google, allowed
us to see the search volumes on specific keywords, which helped us understand the co-working
landscape in Boston and thus understand what our market wanted. After monitoring these key-
words for some time, we decided to test the impact and effect these high-ranking keywords had on
our target market by placing Google Ads. Google Ads allows you to create advertising messages in
different formats, including search, video, and image ad campaigns. These can be interactive or sta-
tic; the platform also allows you to set your own budget. You never spend more money than needed
for each campaign. With this in mind, we placed search ads featuring the popular keywords we
discovered through our keyword ranking tools. As people started to interact with our search cam-
paigns, Google Ads provided us with statistical data based on impressions, clicks, and conversions.
With this data, we were able to identify which specific keywords were most relevant to our audi-
ence and therefore, had a higher conversion rate.
Impact Hub Boston's website is the first door for the public to learn all they need to know about
the organization. After much analysis using marketing analytic tools, which we'll discuss in detail
later, we discovered an opportunity to raise awareness about Impact Hub and increase the number
of memberships by strategically updating the current website. Using Google Analytics, we looked
at what drove people to visit the site, what actions they took once there, and what content they
found most appealing. We found that visitors who read our blog, which showcased our activities,
members, and community, were more than twice as likely to inquire about membership compared
to visitors who did not read the blog. This told us that our community, as we suspected, was a
critical attraction. This led us to increase our blogging. We also focused our website redesign on cre-
ating pages that showed the strength of our community, since we knew that is what appealed to
potential members. Finally, using Google's Behavior Flow analysis tool, we were able to track each
anonymous user's visit to the site, seeing how they found the site, what pages they visited in what
order, and when they left the site—after how many pages and after seeing what content. All of this
35
provided us with ideas on how to improve visitors’ experience in visiting our site. This
led to a new
website design that was rated by testers as much more user-friendly than before.
By using a range of metrics, we have been able to become much more visible when people
search for coworking online, target our ads to our customers real interests, and gather data on what
makes people sign up for membership on our website. We also found valuable data on how to make
our website user-friendly. All of these tools were free or low-cost. None of them required being able
to code. They required only basic arithmetic skills to make sense of the numbers. And the data we
obtained led to greatly improved marketing results. It goes to show that data is now accessible to
all. More importantly, it shows that using data effectively can improve your marketing across many
channels.
1.9 Do the Math: ROAS—An Example

of How Marketing Metrics Works
ROAS = amount of revenue Ssneraiee
cost of advertising
When we think about ROAS, were seeing something that is common to most marketing metrics. It’s
a measure of inherently difficult-to-measure activities. Marketing metrics, at their core, aim to mea-
sure human behavior. Analytics, such as the number of seconds a consumer spends on a website,
can be very precise. Other metrics, such as ROAS, can show broad trends. Tools to measure con-
sumer behavior are getting more accurate every day. However, it's important to remember with any
marketing metrics that they are seldom as precise as, for instance, measuring your height with a
tape measure. They are meant to give concrete information on the general direction of a company’s
growth or the overall effectiveness of its marketing. Measures of human activity are inherently less
precise than measures of inanimate objects. Accuracy is important; however, once an analyst has
achieved the best precision possible, it’s important to understand that metrics have value even if
they cannot capture every facet of a phenomenon. Think back to the example of the movie ads.
What if the movie's production company cut its marketing budget by half next year? It decides to
do without movie posters, TV ads, and Facebook. Leadership's reasoning might be that, although
revenue went up when they created many ads, they cannot know what exact ad led to the most
sales, so they will stop much of their advertising. What do you think would happen to movie ticket
sales? The production company might find its sales are lower. If its sales are reduced by half in the
same year that its ad spending is cut by half, that would be a pretty good indicator that advertis-
ing has an effect on sales. If it keeps keep increasing and decreasing its ad spend for several years
and, each time, see a corresponding growth or decline in ticket revenue, it will have clear evidence
that it is advisable to spend on advertising. The production company may never be able to prove
what exact ad inspires every single moviegoer, but the data is still extremely valuable for develop-
ing business strategy.
1.10 Conclusion
Marketing analytics is the discipline of business data that relates to all areas of marketing. It mea-
sures the success of marketing campaigns, optimizes a company’s sales efforts, and allows the
company to be more strategic with all of the 4Ps of marketing.
The use of data is burgeoning in recent years. From modest beginnings in log files, marketing
analytics has grown into a multibillion-dollar industry offering powerful tools to all levels of orga-
nizations. Specific tools measure every marketing channel, from email, to social media, to advertis-
ing. Companies use data increasingly for decision-making, impacting budgets, product design, and
sales efforts. As digital marketing grows, so too does its data analytics.
Traditional marketing channels continue to offer rich sources of data themselves. Combining
a range of data sources leads to better decisions. Greater confidence in results is often connected
with wide-ranging data collection efforts rather than sporadic efforts at information collection. For
some companies, so much data is available that it leads to analysis paralysis. It's important for ana-
lysts to collect data with a specific purpose, analyze data for insights, and present data clearly.
37
bi Why has marketing traditionally been difficult to measure? What has changed to make mar-
keting easier to measure?
. Why are “hits” an inaccurate metric of website traffic?
ie). Outline three differences between qualitative and quantitative data.
. When would you use quantitative data? When would you use qualitative data? Is one form of
data superior to the other? Why or why not?
. What are some of the factors that lead to data being siloed within an organization? How can
organizations begin to reduce these silos?
What is meant by ROI? Provide at least three examples of ROI for a for-profit company. Pro-
vide another three examples of ROI, this time for a nonprofit organization.
What is a key performance indicator? What is the difference between a key performance
indicator and a metric?
. What is the difference between a conversion and a micro-conversion? Support your answer
with examples of each.
. Why is it important to measure return on ad spend?
. Describe the steps in a typical marketing funnel.
. Why is it important to use metrics throughout the marketing funnel?
. Thinking again about the marketing funnel, provide some examples of the different metrics
marketers use at different stages in the funnel.
. Why do companies engage in optimization? What are some goals for an optimization pro-
gram?
. Define the difference between A/B and multivariate testing.
Why is CTR so often used as a metric of marketing success?
Can micro-conversions be optimized, or can only conversions themselves be successful tar-
gets for optimization? Why or why not?
What are some better metrics to use in place of, or alongside, CTR?
. Andrus, Aden. “What Is ROAS? The Complete Guide to Using Return on

Ad Spend.” StackPath, February 7, 2020, https://www.disruptiveadvertis-
Endnotes ing.com/marketing/roas-return-on-ad-spend/.
. Vardhan, Yash. “What Are Micro Conversions & Why You Should Monitor
Them.” WVO Blog, March 30, 2021, https://vwo.com/blog/what-are-
micro-conversions-and-why-you-should-monitor-them.
. “The Internet Marketing Optimization Process.” Marketing Optimizer.
https://www.marketingoptimizer.com/marketing-optimization/.
1. World Wide Web Foundation, “History of the Web." World Wide Web . “Click-Through Rate (CTR): Definition & How to Improve.” Hotjar, accessed
Foundation, 2021. https://webfoundation.org/about/vision/history-of-the- May 11, 2021. https://www.hotjar.com/conversion-rate-optimization/glos-
web/, sary/click-through-rate/.
2. Guttmann, A. “U.S. Advertising Spending 2015-2022.” Statista, March . Halligan, Brian. “Inbound Marketing vs. Outbound Marketing.” HubSpot,
28, 2019. https://www.statista.com/statistics/27231 4/advertising-spend- February 1, 2021. https://blog.hubspot.com/blog/tabid/6307/bid/2989/
ing-in-the-us/. inbound-marketing-vs-outbound-marketing.aspx.
3. “The Nonprofit Sector in Brief 2019.” National Center for Charitable Sta-
tistics, April 6, 2020. https://nccs.urban.org/publication/nonprofit-sector-
brief-2019.
CHAPTER2
Internal Data: Many Sources,
One Goal
Learning Objectives

1. Understand the range of internal data sources available to marketers.
2. Describe the kinds of data useful for measuring marketing campaigns.
3. Describe the kinds of data useful for optimizing marketing campaigns.
4 . Create a strategy for combining multiple internal data sources for either campaign measure-
ment or campaign optimization.
Google Analytics data. Email campaign results. Social media shares and likes. Sales receipts. Every
day, companies big and small interact with customers—and that generates data. They get visitors
to their websites—and that generates data. They sell products in their stores—and that generates
data. In fact, the amount of data created worldwide each day will exceed 463 exabytes by 2025. (An
exabyte is one billion gigabytes.) This data presents the greatest source of useful information for
most organizations. And for many companies, it’s a resource they are just beginning to tap into
effectively. In this chapter, well take a broad look at all the sources of data that companies gen-
erate about their own customers, operations, and marketing. In subsequent chapters, well talk in
greater depth about many of the specific channels this data comes from. First, were going to get an
overview of all the different types of data generated from within an organization or from an orga-
nization’s own marketing campaigns.
Companies generate more data about their customers, their marketing campaigns, and their
industry today than ever before. Even the smallest organization generates a wide range of informa-
tion about its customers and marketing activities every day. This data can range from information
generated from in-house activities, such as point-of-sale (POS) transactions, to information gleaned
from platform marketing efforts, such as how many people opened a recent email newsletter. All
of these data provide key information that can inform future marketing plans. They can help
companies reach more customers, create a stronger brand, and generate more revenue. Data helps
companies make critical decisions based on facts. Let's take a look at a typical day in the life of a
digital marketer. Digital marketers may work on four or more different marketing channels, each
generating its own data. Together, they have a rich range of information sources, many of which
can be used to make their marketing even more effective.
2.1 Types of Internal Data
When we talk about internal data, we mean data collected by an organization for its own opera-
internal data
tions and marketing activities. This data can originate on a third-party platform, such as the major
Data collected by an
organization for its own social media platforms. What makes it internal is that it is collected by the organization, for organi-
operations and marketing zational purposes. This makes it distinct from external data, which is collected by third parties for
activities. the purposes of aggregation for analysis or sale.
Some examples of this external data would be estimates of how popular a specific internet
search term is each month, or survey data collected by industry trade publications about how often
the average consumer purchases laundry detergent. This type of data is often used by companies
to make decisions on where to advertise, what products to design, or how to price a product. It's
also used to target specific groups of consumers based on their interests. However, even though a
company may use the data, it was collected by another entity, such as Google, Facebook, or a trade
group. Well talk about external data in a future chapter.Internal data comes in many forms.
Let’s take a look at the most common ones.
FIGURE 2.1 Types of Internal Data
Web Analytics Email Marketing
Internal
Data
Customer
Social Media Relationship (CRM)
Marketing Data
Data created by the marketing function is, of course, the central source of content for most mar-
keting analytics. The term “marketing data’ encompasses a wide range of data types, sources, and
levels of accuracy. Some data, such as web analytics, is generated by purpose-built tools designed
to measure marketing. Other data sources are embedded within the tools used to create marketing
materials or send campaigns and are integrated with the same platforms that perform marketing
functions. This includes email marketing data, social media metrics, and content from customer
relationship management systems. However, they are all internal data, that is, data originated
within an organization. We'll explore these data sources in this chapter.
41
Web Analytics
Web analytics data shows the activities of visitors to a company’s website. It shows
marketers how
many visits their site receives, where those visits originate, and what people do once web analytics data
they are on
their site. Data that show the
activities of visitors to a
The data is incredibly valuable to marketers. Web analytics can do the following: company’s website,
+ Measure the success of marketing campaigns

¢ Identify ways to make the website more user-friendly
+ Segment users into different groups to receive different offers or user experiences
Web analytics helps answer these types of questions through specific types
of metrics. The most popular web analytics tool is Google Analytics, part of the FIGURE 2.2 Web Analytic Metrics
Google Marketing Suite. It's currently used by more than 29 million websites
around the world.” Many other proprietary platforms also exist for web analyt- Funnel
ics, often integrated with marketing suites that offer the ability to perform a Metrics
range of marketing tasks. Still, Google Analytics is the most popular, both
User
because it is free and because it draws on Google's wide stores of data on global baal Experience
Metrics
web traffic. This discussion will center around the features and reports available
in Google Analytics. Marketers using other tools should have access to similar
reports.
As we learned, web analytics tools are a core source of marketing metrics. Web Analytic
Metrics
They can be grouped into
¢ topline metrics,
e funnel metrics, or
* user-experience metrics.
Topline metrics are “big picture” metrics that tell us how a website is faring overall. These
topline metrics
include numbers such as “unique visitors,” a number that tells us how many individual users came
“Big picture” metrics that
to a website in any given month, week, or day, or other time period set by the marketer. Topline tell us how a website is
metrics show trends in a website's popularity, how long people stay on the site when they visit, and faring overall.
whether the site is meeting specific goals, such as e-commerce sales. They are often the first type of
metric tracked by marketers getting started with web analytics.
Funnel metrics are generally more specific than topline metrics. They address the marketing funnel metrics
funnel, or the process by which customers find a brand, initially engage with it, and ultimately Generally more specific
become a customer. For instance, funnel metrics tell us how users are finding the website, including than topline metrics. They
address the marketing
which marketing channels are doing the most to drive traffic to the site. They can also tell us what funnel, or the process by
pages customers visit and how often they return to the site before ultimately making a purchase. which customers find a
For instance, Google Analytics’ acquisition reports can tell you what percentage of customers found brand, initially engage with
it, and ultimately become a
you on LinkedIn versus those who clicked on a Facebook ad. From there, you can look at the pages customer.
each group of customers viewed and how often they visited your site and track their other interac-
tions with your brand to identify how they proceed through the marketing funnel. Funnel metrics
are vital to growing revenue.”
User experience (UX) metrics tell organizations how user-friendly their website is. They can user experience (UX)
metrics
tell design teams whether users find certain features of the site difficult to use, for instance, by
tracking how many people use each feature correctly versus those who give up. It can show Data that tell organizations
how user-friendly their
whether users need to hit the “search” button on the site because they cannot find frequently used website is.
information. Many companies do not use UX metrics effectively or often. This can mean a compet-
itive edge for those companies that analyze user experience data wisely.
Web analytics data is useful on its own. It is often paired with testing platforms, such as Google
Experiments. These platforms allow marketers to test different variations of content or layouts on
their websites or to test different offers. Looking at the web analytics data resulting from these
tests can show companies what messages, coupons or other offers, or images resonate best with
customers.
Email Marketing
Email marketing is a $7.5 billion-dollar a year industry.“ Daily email traffic amounts to 246.5 billions
emails per day, though estimates vary on how many of those have a marketing intent." From
weekly specials at the corner restaurant to daily deals platforms, reaching consumers’ inboxes is a
top goal for many organizations.
email service Most companies deploy their email messages using platforms known as email service
providers (ESPs) providers (ESPs). These platforms are all-in-one tool sets that allow marketers to maintain sub-
All-in-one tool sets that scriber databases, design emails, send them to all subscribers or specific subsets of them, and
allow marketers to measure the results of email campaigns.
maintain subscriber
databases, design emails, Looking at email metrics can be a valuable tool for marketers. Data provided
send them to all by most ESPs include metrics on the campaign and the subscriber levels. Open
subscribers or specific
subsets of them, and
rates, for instance, can tell a company how many people opened any given email.
measure the results of Click-through rates indicate how many people clicked on links within an email.
email campaigns. Unsubscribes tell marketers how many people opted out of an email list after any
campaign. Together, these metrics tell companies about the health of their email
FIGURE 2.3 Email Marketing Metrics marketing efforts.
There is another aspect to email marketing data, however. This is the sub-
scriber data. This looks at the behavior patterns of each individual subscriber on
Open Rates
a company's email list. It displays the specific emails from the company that were
opened by each customer, whether they clicked on any links in them, how often
they opened the email, and what specific links they clicked.
By pairing campaign-level and subscriber-level metrics, companies can build
a complete picture of whether their emails are reaching consumers effectively.
Email marketing metrics are so critical that we will be discussing them in a sepa-
rate chapter.
Clickthrough
Unsubscribes
Rates
Social Media
When social media was new, many companies thought it was unmeasurable. Though they recog-
nized the importance of engaging with customers on Twitter and Facebook, they did not think
those efforts resulted in measurable sales. Now we know that social media data can tell us a lot,
including whether social media is effective at driving sales.
Social media data includes reach, which is the number of people who see a company’s message.
That includes both people who follow the company’s accounts as well as those who follow accounts
that retweeted or shared the company’s posts. Marketers can also measure share of voice (SOV), or
the percentage of conversations on social media about a topic related to the company that directly
refer to the company or originate with their social media channels. For instance, let's go back to
Jill. Bruce's Breads gets very few mentions on social media because they focus mainly on posting
discounts rather than more exciting content. Jill decides to look at how many people talk about
healthy baked goods on Twitter, Instagram, and Facebook every week. It's a lot of consumers: Over
2 million posts each week talk about healthier breads and bakery items. Bruce's Breads are men-
tioned in 5% of these social media conversations. Thus it does have a somewhat large share of voice,
since the baked goods industry has many brands, making it rare for a niche brand to receive this
much attention.
Other, more basic metrics can also tell marketers a lot about their social media impact. Most
social media management tools give users data on the number of likes and shares they receive,
43
where their audience is located geographically, and how quickly their followers
are growing. These
tools also tell marketers who the users are who shared their content and how many
followers they
have. Many tools also indicate what posts led social media users to click on links and
where those
specific users were located geographically.
When paired with web analytics data, social media data becomes even richer. It can show com-
panies how many customers came to the company’s website after clicking on a social media post's
link. It can tell whether those users eventually bought, or signed up for a newsletter, or engaged in
other conversions.
More importantly, though, Google Analytics and other web analytics tools can also show
whether a consumer engaged with social media content at any time before making a purchase.
Through the assisted conversions metric in web analytics software, a marketer can tell what per-
centage of people making a purchase on a given day had previously seen certain marketing mes-
Sages, even if they engaged with those messages as long ago as ninety days before. This is especially
important for measuring social media, as we will see in the chapter on social media metrics. People
seldom buy directly from tweets or Instagram posts. However, they often buy from companies they
have followed for a while on social media.
Social media analytics can also be a rich source of sentiment analysis. This is a metric that tells
companies whether conversations about them online are positive about the company, or whether
consumers are saying things that hurt a company’s reputation because they are unhappy. Senti-
ment analysis is a useful tool for determining consumer opinions.
Social media metrics are highly important to marketers. These metrics are growing in impor-
tance as companies rely more on developing strong relationships with consumers.
Customer Relationship Management

A company’s customer relationship management system, or CRM, is one of the most important customer
tools in their marketing arsenal. A CRM allows both sales and marketing teams to track interac- relationship
tions with a customer, from the initial ad, blog post, or video that makes them aware of the firm, management system
down to the most recent purchase they made. Every interaction with a customer or a potential one (CRM)
is, ideally, tracked within an organizations CRM. Software that maintains
data on customers and
CRM data can provide an early alert system for when customers may be about to take their allows companies to
business elsewhere. Paired with predictive analytics, an examination of CRM metrics can show, for manage their relationships
with customers.
instance, that customers’ purchases may become spaced further apart in the months before they
stop buying altogether. If the CRM data shows this for past customers, the same pattern can be
shown for existing customers in time for the sales team to intervene and try to keep the customer
loyal. That's when CRM data really helps, because it can provide data on what interventions ulti-
mately re-engage customers who are about to leave. Sales teams can try different strategies to spark
the interest of customers to whom the data show is acting like past customers who went away.
They can offer steeper discounts, send thank-yous to customers for their past business, or even
travel to a big customer to learn about ways the company may better serve them. The sales team
can then record their efforts to re-engage the customer in the CRM, so they can track which efforts
work to keep their customers loyal.
Another key use of a CRM is to track which customers are the most profitable. CRMs typically
track the amount of purchases every customer makes. By running a report on sales by customer,
marketing teams can immediately identify their biggest accounts. These super customers can then
receive additional outreach, concierge service, and other perks to keep them satisfied.
CRM data can also show which leads, or prospective customers, never make a purchase after
goods
initially expressing interest. A lead is a person who contacts a company, inquiring about their
as a lead until they either lose interest or make a
and services. The individual remains classified
tracks every contact, including
purchase, becoming a customer. If implemented properly, a CRM
every interac-
leads, not just customers. During the sales cycle, sales teams update the CRM with
tion they have with a lead. If the prospect or lead ultimately doesn't buy, that information becomes
part of the lead's record. The data is not deleted because it is valuable to see what makes a lead
ultimately decide to not make a purchase. With time, marketers can see patterns. For instance, bar-
gain-seeking leads may seldom purchase a product if it is not the least-expensive on the market. Or
leads who do not control their departments’ budgets may have trouble obtaining the permission
to make large purchases. It becomes easy for teams to see which prospective customers are most
likely to convert so that sales teams can focus their attention on the inquirers most likely to buy.
FIGURE 2.4 Customer Relationship Management

CRM data has a range of uses.
Show
leads and
prospective
customers
Track the Identify

most potential
profitable sales losses
customers
Because of its direct relationship to sales, CRM data are among any company’s most valuable
data assets.
Marketing Automation
Marketing automation tools are software that automate specific parts of a customer's interaction
marketing
automation with a brand. Typically, they automate a range of digital marketing channels. For instance, they may
send an automatic email once a customer signs up for a free trial, welcoming them as a customer
Software that automates
specific parts of a of the company. They may launch personalized ads based on a customer's interests that the cus-
customer’s interaction with tomer then sees on Facebook or on other websites they visit. It may remind customers that they
a brand.
have left something in their online shopping cart, email them offers for products that may interest
them based on their buying history, or send push notifications to their phones with offers.
All of these actions generate data:
+ Whether a consumer clicks on a follow-up email triggered after a purchase
¢ When acustomer returns to a brick-and-mortar store after receiving a mobile push notification
with a special offer
+ How often customers forward emails with coupons to their friends
45
This type of information is critical for better understanding customers.

Each action originated
from a marketing automation platform generates a trackable consume
r reaction—even if that
reaction is to ignore the message. Thus, marketing automation can gather
a great deal of data. An
initial interaction with a new customer may be limited: The new customer may
make a small pur-
chase, request information once, or contact a call center. By engaging with them
strategically using
marketing automation, companies can gain a deeper understanding of a customers’ needs,
shop-
ping behaviors, and preferences.
It's important to remember that marketing automation tools need to be configured by market-
ing teams to work. Marketing teams decide what types of emails the automation platforms send
to consumers, including writing the text and designing the images. Humans create the actual mar-
keting that is deployed automatically by the automation platform; it is not “marketing by robots.”
Thus, marketers need to understand the powerful capabilities of automation platforms to use them
wisely for data collection.
Non-Marketing Data
It's not just the marketing team that generates useful marketing data. In fact, reaching the right
customers often means looking beyond marketing platforms to gain a full picture of a company’s
profitability and customer experience. In this section, we will explore a few more of the types of
data that support marketing.
Sales Information
The first place marketers typically look when examining data from other departments is the sales
team. Sales and marketing typically work closely together, with marketing generating interest in
the product and engaging with potential customers. When a member of the public indicates inter-
est in a firm's offerings, they become a lead—a prospective customer. If that interest came via a
marketing campaign, for instance, with someone filling out a form online to be contacted with
information, marketing then hands the contact information of these leads directly to sales. Sales
then engages with these leads until they either purchase or find that they no longer wish to buy.
Effective marketing teams engage often with sales to determine whether the leads originating
from specific campaigns became customers. We have seen that to collect data on leads, track
salespeople’ interactions with leads, and ultimately track customer orders, many companies use
a customer relationship management platform, or CRM. Properly updated, a CRM provides sales
data that can help marketing teams determine which campaigns attracted the best customers,
based on which leads ultimately became valuable customers.
Sales teams add to the richness of CRM data by providing qualitative information directly
from interactions between leads and salespeople. For instance, a software salesperson may discover,
during a conversation with a lead, that the lead’s chief financial officer must sign off on any major
purchases. This means it will take extra time to close a sale. This type of information is valuable
on its own, even just for making one sale to this particular company. It can, however, become even
more valuable when qualitative data is aggregated from hundreds of sales conversations. Imag-
ine if, instead of one sales conversation revealing a key role for the finance officer in all purchases,
almost half of all leads say that someone in finance must sign off on their purchases. This means
that the views of the finance team must be taken into account when making sales. This can have
a huge impact on how the company markets itself. Instead of just creating marketing materials
aimed at the engineers who actually use the company's software, the company also now needs
to create materials that explain to finance what it needs to hear: that the software pays for itself
within a year, for instance. Without the qualitative data coming in from the sales team, the market-
ing team may have never known to include information on the financial payoffs of their product.
Armed with this information, marketing now knows more about all the stakeholders to a software
purchase and adjusts the factual information they provide accordingly.”!
Customer Service
Customer service is the front line of a company’s interactions with their customers. Customer ser-
vice takes many forms, depending on the company. A large retailer or service organization may
have a call center that takes calls from customers, resolving issues ranging from lost packages to
requests for upgrades. A brick-and-mortar company, such as Hannah's Hardware, may do most of
their customer service face to face. Increasingly, many companies also offer customer service via
their social media channels, responding to customer posts on their Instagram page or to Facebook
messages. Regardless of whether they take place face to face, online, or on the phone, customer ser-
vice interactions are a rich source of data on customer needs, gaps in product line offerings, and
consumer sentiment.
Imagine a large seller of automotive parts. Most of their sales are business to business, or B2B.
They sell parts to auto shops around the country. Some of these shops are chains, while most are
independent service centers. Their marketing team may want to forecast whether shops are look-
ing for specific types of parts that they do not carry, but could, if demand were sufficient. Customer
service data can provide information on products that customers have asked for by calling in to
the customer service line, sending a message via the website's contact form, or even tweeting at the
company. This data would not show up in sales data because remember, we are looking for parts
that the company does not now sell, but that they could sell if enough customers want them. By
examining customer service data, a retailer can discover what types of products are in demand.
This can help expand a business in profitable new directions.
Customer satisfaction is another key piece of information we can glean from customer service
data. How many customers call into a company’s call center, angry over poor service? How many
social media posts show satisfaction with the product? All of this information can be obtained
through careful analysis of customer interactions.
Customer service data is both quantitative and qualitative. Its sources
include the following:
¢ Recordings of calls to call centers
© 62) - Transcripts of website chats
© ¢ Social media content generated by fans and followers
Many platforms are available to marketers for analyzing customer service
data. It is very important to companies. For example, some software platforms
for managing call centers include analytics, for looking at the volume of calls,
transcribing calls, and mining those transcripts using artificial intelligence for
the sentiment, or tone and attitude, expressed by customers during those calls.
Source: Shutterstock.com Platforms for managing a company’s social media presence also include senti-
ment analysis, examining whether the tone of social media fans’ interactions
with a brand are positive, negative, or neutral. In addition, these tools measure quantitative met-
rics, such as what percentage of a company’s social media fans engage with the company’s content,
send messages, or share the company’s posts. We will talk about those tools more in the chapter on
social media.”
The toughest customer interactions on which to gather data are those that take place in per-
son, such as interactions between customers and associates in stores. These interactions can be
measured via customer surveys, which are a longstanding part of managing customer care in retail.
In addition, more digital metrics, such as social media sentiment analysis, can also be partial indi-
cators of face-to-face customer feedback.
47
Customer surveys can take many forms. Typically, a link to a survey is printed on
store receipts,
along with an incentive to fill it out, such as a small discount. Customers who provide
their email
addresses at the point of sale, or who pay via credit card, can be emailed a survey. Kiosks
are less
often used, though they can be useful for getting quick metrics on how satisfied customers
are
as they are in the store. One emerging way of surveying brick-and-mortar customers is via
their
mobile devices, with push notifications on phones asking for feedback or reviews from customers
who provide their phone numbers or have the company’s app installed.
Product and User Experience
We talked earlier about web analytics data as a source of UX information. Many large companies
that make high-tech products have large user experience teams, dedicated to continuously improv-
ing customers’ experience with their products. These teams use special user experience measure-
ment tools and techniques that go beyond the data available from web analytics tools. If a com-
pany’s website is the main technology it offers customers, UX data from a web analytics tool is often
sufficient for optimizing the customer experience.
As you can see, data that is useful to marketing comes from many sources. It's up to the mar-
keting team to build a robust data program by inventorying their company’s data, understanding
the many datasets available to the organization, and finding ways to mine the data for useful
customer insights. A robust data analytics program benefits the entire organization by providing
reliable insights that doesn't just make marketing more effective, but also helps the entire company
better understand its customers.
Financial Diet
Often, sales resulting from marketing efforts only tell half the story when it comes to a brand's
profit margin
profitability. A product may be popular, selling in high volume, yet produce low profits for an orga-
The percentage of a
nization due to the high costs of producing, shipping, or storing it. The percentage of a product's product’s retail price that
retail price that is left over as profit once expenses for making the products, shipping them, storing is left over as profit once
them, and advertising them is the profit margin. Many products may sell in high volumes or at expenses for making the
products, shipping them,
high prices but have low profit margins, making them relatively unprofitable. For instance, take the storing them, and
example of a boutique online retailer that sells stationery, such as notepads and journals, clothing, advertising them.
gourmet snacks, and home goods, including fine porcelain. Their highest-selling product in Novem-
ber is a tea set retailing for $100. Yet, because it is so breakable, it costs a lot to ship, so profits are
not high. Their gourmet snacks spoil after several months and need to be stored in climate-con-
trolled environments, making them expensive to store. In addition, some stock is lost to spoilage
every month, as items go stale that have not sold. These products, though popular, offer lower mar-
gins because of the costs associated with storing and shipping them. Other products may have
other expenses associated with producing them that reduce their profit margins. By contrast, the
store carries a floral quilt that sells steadily throughout the year. While it is never the most popular
item, it is often the most profitable. It can be shipped at low cost in a padded envelope, stores in a
small space, and does not spoil. The profit margins associated with this product are high.
When it comes to understanding the benefits of different marketing initiatives, marketers return on investment
(ROI)
need to put a product or service's overall profitability into perspective. Investing heavily in selling a
product with low margins may be a poor decision, even if the marketing produces more sales, if The percentage of return
an organization sees from
those sales are unprofitable. At the same time, successfully marketing a high-margin product can their investment in an
lead to great profitability. Thus, in order to fully understand marketing’s ROI, or return on activity, such as
investment, marketers need to understand the financial big picture. They need access to financial marketing.
with
data, such as shipping, warehousing, and production costs, as well as the costs associated
staffing various essential functions that contribute to a brand's expenses, in order to understand
fully how marketing can best increase a company’s profits.
2.2 A Closer Look: Hannah’s

Hardware
Let's take the example of a local chain of hardware stores, Hannah's Hardware. Down the street
from Bruce’ Breads, it has mastered its data, and is thus thriving. Opened by local carpenter Han-
nah Cho in 1997, this friendly local brick-and-mortar retailer has five locations in the Boston area. It
serves both do-it-yourselfers and professional technicians, builders, and landscapers.
Source: Shutterstock.com
Each week, Hannah's marketing manager, Bob McGill, sends out a newsletter to everyone on
the company mailing list. Every Monday afternoon, Bob looks at the data on his marketing cam-
paigns. He checks what percentage of people open the email. He also goes on Facebook to see how
many likes the company received on its page's posts that week. Bob might also check the number
of comments on its Instagram posts. For example, he posted that great photo of the new shipment
of roses the company has on sale this week—that should have generated some user activity. All in
all, the data look good. Thirty percent of customers who signed up to receive Hannah's newsletter
opened the email with weekly specials the day they received it. They engage often and positively
with what the company is posting on Instagram. Sales are up, so Bob is happy that marketing is
working. Hed like to know a bit more about how well marketing is working in more detail, though.
Sure, more than 550 people liked that photo of roses he posted to Instagram with lots of hashtags.
But did that result in more sales of roses? If not, was the post still worth the effort? How could he
tell?
Meanwhile, Hannah herself is looking at other data. Her concern as the owner is the bottom
line. She's looking at cash register takings from the point-of-sale system, the cost of goods sold, and
payroll.
Chapter 2 Internal Data: Many Sources, One Goal 49
The data examined by Bob and Hannah are good examples of internal data. They are data gen-
erated by the company, either using their own, owned tools, such as their POS, or channel tools,
such as social media, and measuring content created by the firm.
The challenge for companies big and small, as we can see in our example, is knowing what data
to examine for the purposes of marketing. What if Bob could see not only what flower sales were
generated by his Instagram post about roses, but also how profitable those sales were? What if Jill
could measure the ROI on all of the company’s advertising, based on POS sales? With the right
internal data strategy, it's all possible. An internal data strategy is the best place for most companies
to get started on their marketing measurement plans. It's also the place where often data yields the
greatest results.
Let's get back to Bob. He's curious about the results of last week's marketing. That Instagram
post did well; so did the email coupon for 20% off all outdoor tools. He's wondering, though, whether
these marketing efforts generated profits.
Comparing notes with Jill, he looks beyond marketing to sales data, payroll, and cost of goods
sold. He learns that Hannah's Hardware sold $150,000 in roses in just one week. Looking just at sales
data, it looks like the Instagram promotion was a win.
Hannah is less excited about the roses than Bob was. “It's really expensive to sell roses,” she
says. “Why?” asks Bob. “People ask lots of questions about how to grow them, taking up staff time.
Were always happy to help; however, it takes an average of 45 minutes to handle a rose sale, what
with people coming back to ask more questions, needing follow-up advice. At $20 an hour, that
means in staff time alone, it costs $15 to sell an $18 rosebush. I'd much rather sell more garden tools.”
The coupon for garden tools from the recent email campaign has been redeemed more than 340
times across all stores, leading to over $150,000 in sales. It turns out the ROI from that email was
much higher, even though the sales volume from social media and email were the same.
Bob's experience is a common one. When markers look only at marketing data, an incomplete
picture emerges. Marketing data can measure a brand's visibility. However, to see the full picture
of marketing ROI, a true internal analysis must cover many more types of data. That can include
financial information, supply chain data, and other types of data collected outside of marketing.
When companies look at this fuller picture of their marketing ROI, the true picture emerges of
what programs are working. This points the way to where companies should invest in the future.
To get this more complete picture of marketing results, companies must first know what data
are available internally for analysis. This is when they conduct an internal data audit.
2.3 Conducting an Internal Data Audit

FIGURE 2.5 Internal Data Audits
Steps in an internal marketing data audit.
Develop a
Reporting
Framework
In a world where every tool used in business generates data, we as marketers have more infor-
siloed
mation than ever before. The challenge for marketers is that much of the data is siloed: that is, it's
Stored within a specific
tool, with limited ability to
stored within a specific tool, with limited ability to use it within other applications. It may also be
use it within other organizationally siloed. In this case, only one department or team member within the organization
applications, said of data has access to, or understands the data. Many times, no one employee within a company even knows
or information.
all the data being collected within an organization.
data audit To break down these silos and make data usable, marketing leaders conduct an internal data
The process of identifying audit. They identify all the sources of data within an organization. They discover its uses, learn how
and assessing all the data who collects it, and provide a summary of how it is currently used across an organization.
within an organization.
The steps in a data audit center on learning as much as possible about the available sources of
information within an organization. At this stage, auditors worry less about how the data will be
used in the future. The key is to simply learn what data exists.
Organizing an Audit
An effective data audit needs to be organized from the first step." Organizations are often sur-
prised by how much data they collect, as well as how it's stored, who has access to it, and how well
or poorly it's being used. To gather all of an organization's data, assess its quality and value to the
organization, and decide best how to use it, companies need to follow a clear process. The steps in
this process are outlined below.
Step 1: Communicate
Before beginning an audit, it’s important that all stakeholders be aware of the purpose of the audit.
Communicating the purpose of the audit, when it's happening, and how it will happen ensures the
cooperation of disparate teams.
One key reason for early, clear communication is to ensure that the audit uncovers all data
collected. In a functional organization, teams are typically willing to share information. However,
data is often overlooked in an internal audit, even when every stakeholder has the best intentions.
Often, departments are unsure whether data is relevant, so they do not share it. Other times, they
don't understand the importance of the audit, so data-sharing takes a back seat to more pressing
departmental priorities.
It's important that everyone be on board with a data audit. Marketing teams should consider
the audit itself as something they need to market to internal stakeholders. It can be a challenge
in a busy company to get other departments to take time out of their days to provide data for
an audit. Teams can also be concerned that scrutiny of their data may have a negative impact on
how they are assessed. Marketing teams need to dispel these concerns while also getting the whole
organization excited to help improve the company’s data processes. They can share some success
stories that came from the effective use of cross-functional data. The auditor can provide rubrics
for determining whether data is relevant to be included in a marketing audit, casting as wide a net
as possible. Companies can hold a town hall meeting to showcase the benefits of effective data col-
lection.
Before the audit, the audit team lead should meet with stakeholders from other departments
to assure them that the audit process will be as efficient as possible. They then must deliver on that
promise. For a successful audit, the marketing team makes it as simple as possible for non-market-
ing teams to deliver information on their data in a simple, yet complete form that requires the least
effort from non-marketing staff. This is where the reporting framework comes into play.
51
Step 2: Develop a Reporting Framework
To be usable, data needs to be consistent. It needs to be consistent in

* formatting,
+ labels attached to similar data points,
* standards of accuracy in data collection, and
¢ timeliness of collection.
Achieving this consistency can be a challenge for organizations of all sizes. Each department
and job function has their own reporting formats that work with the data they access the most.
In addition, they will have reporting time frames that work for their daily workflows. For the data
collected by different departments to be usable by the entire organization, standardization must
occur. This can often turn into a multi-month process, as teams onboard new policies and proce-
dures.
Many employees within a company generate and collect data as part of their jobs. Social media
data may be reviewed daily by the social media team. It may be accessed solely using the propri-
etary tools used both to measure and analyze social media, such as the organization's social media
scheduling tool. Customer service may use a CRM or dedicated customer service platform to track
customer interactions as they occur several times a day and, again, use proprietary, dedicated tools.
Across an organization, data is collected at different times, for different purposes, using different
tools. It's up to the data auditor to ensure that this varied landscape of collection methods is trans-
lated into a consistent picture of data across the organization.
The first step in standardizing data across the organization is to provide a standardized report-
ing framework during the audit process. This framework provides the basis for future standardiza-
tion during analysis and reporting. It also helps establish new, consistent ways of thinking about
data collection across the organization.
What does such a standardized reporting framework look like? It should start with a data
assessment form to be completed by those responsible for each type of data within an organization.
This form should collect information on the following:
¢ How often the data is created
¢ What tools are used to create or collect it
¢ In what formats the data is stored
¢ Who creates and collects the data
¢ Who has access to the data
- How the data is reported: to whom, how often, and in what format
¢ What other types of data output are possible
For example, an email marketing coordinator may maintain data using the company’s email
marketing tool. The data is created weekly, whenever an email marketing message is deployed. The
coordinator and the digital marketing manager check the data weekly within the tool, to measure
the success of email marketing campaigns. In addition to the email marketing platform's reporting
tools, output to a comma-separated values (CSV) file of all data is available.
It's especially important during a data audit to determine whether data can be exported to a
standard, commonly used format, such as CSV. The availability of standard data formats means
that data can be used in a range of reporting and analysis tools. It's also critical to document who
has access to data, to ensure data security. Finally, it's important to know how often data collection
occurs, to establish timely reporting.
Once the audit is complete, a company should have a reliable view into the amounts of data
that are collected every day, how it is currently used, and what sources exist. This is the first step in
making data more useful—and more often used—across the organization.
Step 3: Listen
Marketing teams should do more than simply document existing processes. Concurrently with
any audit, marketers should embed themselves within other departments to understand their data
activities. The goal should be to learn about each department and functional area's needs and how
centralized data collection could enhance organizational sense-making. A term coined by Karl E.
Weick in the 1970s, ‘organizational sense-making" refers to the role of collective data analysis in
establishing “one version of the truth,” helping to align departments that can otherwise pursue dif-
ferent objectives. One example of organizational sense-making, for instance, is bringing together
sales and marketing teams to analyze lead-related data together, in order to align better on lead
scoring, marketing channel selection, and sales goals. By looking at the data together, the two
teams, which can often disagree on what constitutes a “good lead,” or where to allocate marketing
budgets, can make sense of individual, anecdotal evidence and reach a common set of definitions.
They can “make sense’ of their departmental experiences by looking objectively at the data related
to both their job functions.
Step 4: Map
Once all data collected within a company has been documented, the work begins of analyzing the
internal data landscape. The goal of this analysis is a data map, presenting all sources, usage, and
collection methods of data, with details on who owns the data, how it's gathered, and how it is uti-
lized and how it should be used. The mapping process should not be rushed.
The mapping process should not be rushed. Depending on the number of sources discovered
and their complexity, fully mapping all existing organizational data activities requires two weeks
to several months.
FIGURE 2.6 Mapping Data Sources
What the
Collection
data can
Method
do for you
The map should be comprehensive yet easy to use. It should be made available in both digital
and print form, with the print version often being a simplified representation, such as an info-
graphic. The map is a living document, providing the first steps toward the “one version of truth”
for unified marketing analytics. At the same time, it is also a piece of marketing collateral, com-
municating the value of analytics across the organization. It's in this role that attractive visual
presentations, such as printed infographics, take center stage. They can help communicate to all
stakeholders what data can do for them.
Step 5: Communicate Again

In order to be effective, data has to be used. Stakeholders can only use data if they feel comfortable
with it, which is why the final step in any data audit must be communication. The analytics team
should communicate what data they identified, the quality and reliability of the data, and how the
data can be used moving forward. There are several ways this communication can happen. In per-
son is best, whether by meeting separately with each department or hosting a “data town hall.” It's
also helpful to provide a written report on the results of the data audit, so that stakeholders can
53
use the report as a reference as they become more comfortable with using data. The most impor-
tant thing at this stage is that the team that conducted the audit be available to answer questions.
Stakeholders will have many questions, and it's critical to answer them in order to ensure that the
data audit doesn't become just another report that is read once and not used again. To ensure uti-
lization, the data team must present the data itself as a resource, not a static object of study, and be
prepared to guide stakeholders in using the data throughout their operations.
A data audit can be time-consuming, but it is time well spent. Having “data about your data” is
the most important step in using a company’s data effectively. Many companies do not realize that
the answers to their most pressing questions are often already answered by an internal data source
because they simply do not know about all of their sources of data.
Evangelizing Data Within Organizations

What Namvar et al. call “organizational sense-making’ is both a goal of data analytics, and a natural
byproduct of an effective data collection process.”
It should start during the audit, as marketing seeks to understand the meaning of data within
different departments. For some departments, data is a means to an end. Email marketing may see
data as a way to optimize each email message to get the highest response rate. For others, data is
a way to prove the ROI of the department's work to outsiders. Sales, for instance, may make little
use of data internally. Instead, they report on numbers to external stakeholders to prove produc-
tivity or establish the need for more budget. For most departments, data is both a practical job tool
and a path to validation of their value. Regardless of how it's being used, marketing needs to under-
stand those uses. This is where listening is critical. Setting up listening sessions, job shadowing, and
conducting in-depth stakeholder interviews are among the tools that can help auditors understand
all stakeholders’ needs when it comes to analytics. That understanding, in turn, helps make data
actionable for a wider range of users, because it's collected, shared, and presented in a way that all
employees can use it.
2.4 Marketing Attribution, Customer

Lifetime Value, and Average Order
Value
One of the most important uses of internal data is attribution: determining which marketing chan-
nels are producing the greatest ROI. Through careful analysis of web analytics, CRM, and other
internal data, marketers can determine which marketing channels are the wisest investment, as we
have seen in the examples. By examining several metrics, brands can determine which marketing
efforts are worth further investment.
t Customer Lifetime Value:

: How to Calculate & Why it
: Matters
Attribution Metrics
Determining which marketing efforts produced the most effective results is critical to ensuring
company growth. This is the role of attribution metrics, which measure what marketing activities
created interest among customers or induced them to purchase."” Correct attribution requires
looking at several metrics:
conversion rates 1. Conversion rates by acquisition channel.

The percentage of users 2. Customer lifetime value (CLV) of customers acquired via each channel: Customer lifetime
who engage in a value is the total revenue generated by an average customer in a specific group of customers,
conversion.
such as a particular customer segment, or those customers acquired via a specific channel.
customer lifetime 3. Average order value (AOV) by acquisition channel: This metric examines the average value of
value (CLV) an order placed by customers acquired via a specific channel. It’s common for one channel to
The total revenue perform well in driving customers to a website but lag in delivering customers who spend a
generated by an average significant amount once they place an order. For instance, many companies find that though
customer in a specific
group of customers, such
they acquire many customers via social media, those customers tend to buy less than cus-
as a particular customer tomers attracted via other channels. In addition to CLV, AOV by acquisition channel can tell
segment, or those marketers what channels drive the customers who order the most in an individual visit. This
customers acquired via a
specific channel.
can be an early indicator of CLV and can be especially valuable when there is insufficient data
to feel confident in CLV calculations. A customer's average order value, multiplied by the num-
average order value ber of orders they have placed, provides their CLV.
(AOV) Let's take a closer look: when we met the team at Hannah's Hardware, we learned that two
The average value of an marketing channels can seem equally successful when it comes to traffic they drive to a store or
order placed by customers
acquired via a specific website. However, one channel or campaign can deliver more profitable customers in the short
channel. term—customers with high AOV. We learned that customers who were attracted via a social media
campaign were less profitable during their first store visit than those who responded to an email
campaign. Our marketer, Bob, was just about to give up on social media, or at least on promoting
plants and flowers on social media! After all, when people came in to buy roses they had seen on
Instagram, they took up so much staff time that they were not very profitable. But Bob has an idea:
once someone becomes interested in gardening, it becomes a serious hobby for them. They may be
avid gardeners for years!
Bob decides that before he gives up on promoting roses, or being on Instagram, he will examine
the AOV for customers who initially responded to the Instagram rose promotion. He found that
their AOV went up steadily all summer. They would come back every week, buying more plants,
Chapter 2 Internal Data: Many Sources, One Goal 55
fertilizers, watering cans, and all kinds of other gardening products. Averaged over the course of
one summer, the AOV of this customer segment was, in fact, in the top 10% of all customers. Bob
becomes curious. “What if I calculate CLV?” he says to Hannah. “Go ahead,” she says, “I'm curious,
too, about these avid gardeners.” Bobs idea proves to be right. The CLV of those customers who first
came into the store after seeing beautiful plants promoted on Instagram was $3,000—higher than
the average customer by almost 20%. Far from being unprofitable, these customers were among
the most valuable to Hannah's Hardware. By calculating both AOV and CLV, Bob identified not only
important customer segments, but also an important marketing channel and campaign type: gar-
dening promotions on social media. “These campaigns are real winners,” says his boss, Hannah.
“Let's invest more in them, and see what else we can do on social media to get customers into the
store.”
Multitouch Attribution
In addition to focusing on AOV and CLV, another key way of analyzing internal data is attribution
attribution modeling
modeling.
Understanding the
activities to which a brand
FIGURE 2.7 Important Factors in Multitouch Attribution should attribute
conversions or other
success.
Conversion Customer Average

Rates by Lifetime Value Mm Order Value Attribution
Acquisition (CLV) (AOV) Modeling
Channel
Why is attribution modeling so critical? The reason is that many valuable channels are “sup-
porting players” in marketing. They drive some traffic and conversions all by themselves."! How-
ever, their true value is as part of a larger campaign, or a brand's overall web presence. Most
companies run multiple marketing campaigns during any given year. Customers may see multiple
messages from the same brand, often weeks or months before a buying decision is made. Multi-
channel and multi-campaign attribution allow marketers to understand the contributions made by
all marketing efforts to a customer's ultimate decision to buy.
Multichannel attribution refers to attribution modeling that looks at different marketing

multitouch attribution
channels—for instance, email, social media, and TV ads. Multicampaign attribution refers to attri-
Focusing on the variety of
interactions, or touches,
bution modeling that looks at different marketing campaigns—for instance, a company may be
that a company has with a running one promotion on social media and via email that promotes a product's reasonable price,
consumer, to understand and another promotion that is a set of TV commercials that promotes a brand's luxury image. For
the activities to which a
simplicity's sake, we often talk about multitouch attribution: focusing on the variety of interac-
brand should attribute
success. tions, or touches, that a company has with a consumer. Touches cover both the specific campaign
and the particular channel; the focus is on any action that engages a customer.
To see how multitouch attribution works, let's go back to Jill at Bruce's Breads. She's been work-
ing on a paid search campaign. She's seeing fairly good results. Her ads have a conversion rate of
4.5%, which means that 4.5% of the people who click on the ad make a purchase. She looks at the
most recent benchmarking research. The average Google Ads campaigns have nearly a 2.5% conver-
sion rate, but many successful ones have conversion rates over 10% (TrackMaven). The keywords
she uses, such as “organic bread” and “gluten-free whole wheat loaves” have reasonable costs. She
spends, on average, $2.85 every time a potential customer clicks on an ad. If 100 people click on her
ad, she spends $285. She knows that 4.5% of those people will buy, with an AOV of $100. The ads are
paying for themselves because they have led to $2,000 in sales each month. Still, Jill wonders if the
ads are the best way to spend her limited marketing dollars. “Logically, a lot of people might be see-
ing the ads, maybe even clicking on them, but not making a purchase right then and there. Maybe
they got interrupted while browsing the site and decided to come back later. They still saw the ad.
And they still decided to buy after seeing the ad. Can I tell how many customers are like that—peo-
ple who see an ad, but buy later?”
She decides to ask Bob down the street at Hannah's Hardware. They always seem to know their
marketing metrics!
“You definitely can tell how many customers see you on more than one marketing channel,”
Bob tells Jill. “The phenomenon of a customer converting after seeing something on one marketing
channel, but also seeing other messages from a company on more channels, is called assisted con-
version. Basically, several channels can ‘assist’ each other in helping to drive a customer to make
a purchase.” Bob and Jill take a look at her Google Ads console, as well as her Google Analytics
account. They see that 12% of people who clicked on a social media post and placed an order had
also seen a search ad for Bruce's Breads at some point in the past thirty days. When they looked
back sixty days, that number grew to 14%. If they looked back ninety days, over 20% of the cus-
tomers Jill thought were coming in solely in response to social media promotions had also seen
some of her paid search ads. “Wow!” says Jill. “Paid search ads are working better for me than any
other channel!”
57
“Not so fast,” says Bob. “Let's look at the other side of things. What about people who
clicked
on paid search ads? Maybe they are also being influenced by what they see on social
media.” Sure
enough, in the last thirty days, over 18% of people who had clicked on a paid
search ad right before
making a purchase had previously seen Bruce's Breads posts on social media.
. “It looks like a lot of our channels work best together,” says Jill. “Seeing us all over the web—on
social media, when they search for gluten-free bread—really helps customers notice
us.”
Although non-advertising channels, such as email, deliver a stronger ROI than advertising
in many instances, this is often only part of the story. Email campaigns market to existing cus-
tomers, and those customers had to be acquired somehow. They may well have been acquired via
advertising. That is why multitouch attribution is important. We will learn more about multitouch
attribution later in the book.
2.5 Do the Math: Web

Analytics —Acquisition Data and
Conversion Rate by Channel
The most valuable sets of data for a company’s website are its web analytics metrics. These consist
of topline metrics, funnel metrics, and user experience metrics. These metrics can help companies
measure the success of their marketing campaigns, redesign their website to be more user friendly,
and target users more appropriately.
One critical data point for most marketers is acquisition data. Acquisition data tells us where acquisition data
most of our visitors are arriving from and how many there are in a certain time span. Paired with Data that tells us where
conversion rate numbers, this data tells us which marketing channels are driving consumers to the most of our visitors are
arriving from, and how
site who are ready to buy versus channels that only bring people to the site who look at content but
many there are in a certain
do not buy. This data can help us as marketers determine if a website is meeting its established time span.
goals such as sales or subscriptions to a service.”
For example, say you focus most of your $20,000 advertising budget on social media campaigns
rather than on search engine optimization. Looking at your topline metrics shows you that 75% of
your visitors are reaching your site from social media, opposed to only 20% originating from web
searches, and 5% from links on other websites. This looks like good news! However, it may be that
those customers who arrive at your site from your social media ads just look and don't buy. How
can you tell if your $20,000 investment was worthwhile?
Take a look at your conversion rates by acquisition channel. Let's say you get one million visi-
tors to come to your site every month via social media. Look at how many of those convert to sales:
Number of Sessions / Number Sessions Resulting in Sales = Conversion Rate
You find that only 10% of your hard-won social media visitors are converting to sales, or only
100,000 visitors. Now, you know that only 20% of visitors come to your website from web searches,
or 250,000 people. However, 100,000 of those visitors also end up buying from your site, a conversion
rate of 40%. So, although the number of sales from each channel is the same, the conversion rate
from web searches is actually much higher. More importantly, you only spent $10,000 this year on
search engine optimization (SEO), resulting in a much higher return on investment.
Looking at web analytics data in this way results in a re-balance of your marketing spending.
You now know that social media ads may not be the right channel for you. You decide to change
your social media ads, to see whether different ads attract other customers witha higher conver-
sion rates. If those ads still lead to low conversions, you would be wise to shift your marketing
spending towards the higher-converting channel of SEO.
2.6 Case Study: Credit Union

Association
Myles Bristowe is the founder of Wicked Good Results, a marketing agency, as well as past president
of the American Marketing Association, Boston Chapter. Myles was working with an association of
credit unions to increase credit union membership among younger consumers.
“Our research had revealed that 71% of millennials had little to no knowledge of credit unions.
With the national average age of a credit union member approaching fifty years old, it was imper-
ative that the industry reach, attract, and acquire a younger audience or potentially face an extinc-
tion event.” All were in agreement that the best channel to reach a younger demographic was
through social networks.
The strategy was to develop and provide share-ready content for credit unions to leverage on
their existing social media properties. For several weeks, participating credit unions published cam-
paign content which attempted to increase awareness, dispel common myths about credit unions,
and push the primary message: “Join a credit union today.”
The credit unions shared the content as prescribed, and people engaged with it. They liked it,
they commented and clicked on the links, but people seldom re-shared it.
There was one piece of content however, that generated thousands more re-shares than all
others. It simply said, “I love my credit union.” It was initially shared by eight credit unions located
in eight different cities, and within a week, there was activity for that one post in all fifty states. “We
had a simple question: Why?” says Myles.
Simply, the fans and followers of a credit union are already members. Rather than the call-to-
action: “Join a credit union,” the credit unions shared something in first person that people believed
was true for them. So they re-shared it. When their friends, cousins, and colleagues who were mem-
bers of a local credit union saw it, they re-shared it as well.
This realization marked a change in the strategy. “Rather than having the credit unions push
out messages about the industry and promoting themselves, we developed content that was true
for the members and let them share the messages on behalf of their favorite credit union.” Rather
than trying to drive acquisition, the team focused on engaging, activating, and converting existing
members into brand advocates who could certainly reach more people in more places than the
credit unions. In the first three months, the campaign reached 31.7 million U.S. millennials and gen-
erated over 90,000 inquiries for local U.S. credit unions.
The data showed the way to an important strategic insight: “Sharing wonderful information
about your organization may not always connect with the reason(s) why a customer chose to do
business with you. Even though your fans like your posts and they even comment on it, they may
not re-share it unless it truly resonates with them on a personal level.” Using data, Myles was able
to identify a winning strategy for his client. Going beyond looking at simple numbers reflected in
metrics such as clicks and shares, Myles asked the important question: Why was the data show-
ing what it was showing? What conclusions can be drawn from the click, like, and sharing data? By
examining social media metrics from a strategic standpoint, Myles identified vital consumer atti-
tudes and behaviors, thereby finding a way to reach his client's goals.
59
2./ Conclusion
Internal data is a rich resource for any organization. Indeed, dataisa company’s leading asset. It can
help organizations identify where they are doing well in serving their customers, as well as areas
where they can improve. It can help optimize each marketing channel. It can build a rich profile
of the customer and create meaningful connections between brands and customers. Mining data is
critical for making use of it. Managing marketing channels cost-effectively is important in today’s
environment, when marketers have many marketing channels to choose from, making it important
to optimize their budgets. “You can't manage what you can't measure’ is a frequent adage in mar-
keting; measuring the impact of each campaign, creative piece, and channel enables marketers to
achieve excellence in their programs. Using internal data to engage customers also helps customers
themselves, as they receive messaging that is relevant, useful, and meets their needs.
1. Name some examples of different types of internal marketing data and how they can be used
together to create a better picture of what marketing programs are successful.
2. What is web analytics? Why is it so important to marketers?
3. What is the difference between web analytics data and channel-specific metrics, such as
email or social media metrics?
4. Name some of the key types of information a brand can gather from their email data.
5. How do brands gather and use social media data to better understand all of their marketing?
6. Name some of the challenges in collecting CRM data. What are strategies companies com-
monly use to overcome them?
7. You've just landed your dream job! You will be the new social media manager for your
favorite food, clothing, or car brand. The company has not been seeing a lot of sales resulting
from their social media efforts. What marketing data, in addition to social media data, would
you wish to see, in order to get ideas on how to create effective new social media promo-
tions?
8. In order to be usable, data needs to be consistent. What specific factors need to be consis-
tent in order for data to be considered consistent?
9, Why is it important to communicate the value of analytics to everyone within a company?
10. Define customer lifetime value and explain how companies might use internal data to mea-
sure it.
11. Why is it important to look at data other than marketing data when analyzing the effective-
ness of marketing?
12. Name three types of non-marketing data that can be important to marketers.
43. In order to be usable, data needs to be consistent. What specific factors need to be consis-
tent in order for data to be considered consistent?
14. Why is it important to communicate the value of analytics to everyone within a company?
15, Why is it important to listen to internal teams when conducting a data audit? What could be
some of the results of not listening to teams outside of marketing that can show up later,
once an organization starts to centralize a lot of its data collection?
16. How do you create a data map? What are the steps that go into creating a map?
17. What do you think could be some challenges of multitouch attribution, when interpreting dig-
ital channels?
18. What is the purpose of attribution and the importance of the different attribution metrics to
the customer journey?
19. How does attribution differ from conversion tracking? In what situations should a company
look at multitouch attributions as opposed to single-touch attributions?
20. Think about a time when you had a good experience with customer service. What kind of
strategies do you think the company may have used to measure and improve customer sat-
isfaction?
. Howard, Margot. “17 CRM Stats That Sales Professionals Need to Know.”
Nutshell, December 17, 2019. https://www.nutshell.com/blog/crm-stats/.
Endnotes ~ . Calzon, Bernardita. “A Guide to Customer Service Data Analysis & Service
Reports.” datapine, March 30, 2021. https://www.datapine.com/blog/
customer-service-reports/.
. Davis, Kord. Ethics of Big Data. Beijing etc.: O'Reilly, 2012.
. Namvar, Morteza, Jacob L. Cybulski, and Luckmika Perera. “Using Busi-
ness Intelligence to Support the Process of Organizational Sensemaking.”
. Vuleta, Branka. “How Much Data Is Created Every Day? [27 Powerful Communications of the Association for Information Systems 38 (2016):
Stats].” SeedScientific Blog, March 22, 2021. https://seedscientific.com/ 330-52. https://doi.org/10.17705/1cais.0381 20.
how-much-data-is-created-every-day/,
10. Sheridan, Kate, Rodney Hutton, Megan Reynolds, Adam Blitzer, Jay
. “Google Analytics Usage Statistics.” BuiltWith. Wilder, Jonathan Beeston, Rachel Boyles, Elaine Li, and Anna Rosenman.
https://trends.builtwith.com/analytics/Google-Analytics. “Marketing Attribution: All You Need to Know.” The 360 Blog from Sales-
. Crater, Bonnie. “Why Funnel Metrics Are Essential to Marketing.” Full force, April 20, 2021. https://www.salesforce.com/blog/what-is-market-
Circle Insights, March 25, 2020. https://fullcircleinsights.com/why-funnel- ing-attribution-model/.
metrics-are-essential-to-marketing/. 11 . “The Multi-Touch Attribution Guide: What It Is & How to Use It: Marketing
. ReportLinker. “Global Email Marketing Industry.” Reportlinker.com—Get Evolution, accessed May 12, 2021. https://www.marketingevolution.com/
the Latest Industry Insights. Simply. https://www.reportlinker.com/ marketing-essentials/multi-touch-attribution.
p05900877/Global-Email-Marketing-Industry.html. We Crater, Bonnie. “Why Funnel Metrics Are Essential to Marketing.” Full
. The Radicati Group. “Email Statistics Report, 2015-2019." Radicati, The Circle Insights, March 25, 2020. https://fullcircleinsights.com/why-funnel-
Radicati Group, n.d. https://www.radicati.com/wp/wp-content/uploads/ metrics-are-essential-to-marketing/.
2015/02/Email-Statistics-Report-201 5-201 9-Executive-Summary.pdf.
CHAPTER 3
From Direct Mail to Ad
Platforms: Supplementing
Internal Data with External
Databases and Research
Learning Objectives

1. Define what is meant by external data.
2. Identify the types of data available from vendors, social media platforms, and data broker-
ages.
3. Describe how to integrate external and internal data in a range of marketing plans.
4. Analyze an external data source for its appropriate applications, ethical implications, and rel-
evance to organizational marketing goals.
In the last chapter, we learned about internal data: all the data generated by companies as a part of
external data
their marketing campaigns and daily operations. In this chapter, we will take a look at external
Data sourced from outside
data: data created by companies that sell or provide data to marketers.
one’s organization.
Few companies produce all the data internally that they need. For instance, a company often
needs to know how often consumers search online for the types of products they sell; a sneaker
brand, for instance, might want to know how many times a day someone searches for “high-top
sneakers.” They can only get this data from search engines or companies that focus on search
engine data. Another company may need to gather data on its competitors, such as their sales vol-
ume. Again, it needs to look outside for this data.
When we think of external data today, we often think of “big data,” which, in marketing, has personally
been synonymous in many people's minds with data storehouses that track and sell consumer data. identifiable
However, both of these beliefs are misconceptions in many cases. Not all external data is big data; information (PII)
indeed, most is not. Rather, external data can include qualitative data, small data, and analyst Information about
consumers that is personal
reports. In addition, much external data does not include consumers’ personally identifiable to them, such as name,
information (PII), which is rightfully protected. PII is any data that can identify a consumer defi- Social Security number,
nitely, such as a consumer's name, phone number, address, or other unique, specific information. address and other
sensitive facts.
Some forms of external data are under scrutiny for potential privacy violations. Third-party
cookies, tracking mechanisms that collect data across websites, often to be provided to companies
for marketing uses, are set to be eliminated in the early 2020s because of privacy issues. Consumers
are increasingly concerned about their data being sold, according to a study by the consulting firm
McKinsey. Yet, not all external data sources provide data on individual consumers or depend on
selling personal data. Many provide anonymous data on aggregate groups of consumers or assess-
ments of trends or industries.
We will take a look at the wide range of external data sources available to marketers. We'll
examine the ethical implications of data sources that include consumer data, as well as the costs
of more exclusive data sources, such as analyst reports. In addition, we will explore unique ways of
gathering authoritative external data.
3.1 External Data and Marketing

External data has long been part of marketing. One of the earliest forms of data-driven marketing
was direct mail, which used the growing United States Postal Service to reach consumers in their
homes. Databases of interested consumers were needed to identify the addresses to which compa-
nies sent direct mail pieces, such as catalogs. The first direct mail in the modern era was created by
Aaron Montgomery Ward, whose initial direct mail consisted of a single sheet of items, sent directly
to consumers in the 1870s. Richard Warren Sears soon followed suit."! These companies targeted
consumers for mailings using a combination of internal data, in the form of lists of their existing
customers, and external data, such as lists of all households in a specific geographic region.
To maintain direct mail operations in the pre-computer era, customer data was maintained
as paper records. With the advent of mainframe computers, companies could store vastly larger
amounts of data, but the methods of targeting consumers remained the same. Companies sent
direct mail to customers based on past purchase history with the company itself, relying heavily on
internal data. List brokerages emerged in the mid-zoth century as a way to meet growing industry
demand for reliable data on households locations, incomes, and members.
With the advent of the World Wide Web, initial attempts at using external data were mixed.
Many companies acquired email addresses of web users and started sending them unsolicited
emails. Although some of these email messages were for legitimate products and services, many
were not, and spam became a hazard for email users worldwide. The CAN-SPAM Act of 2003” out-
lawed many uses of external email lists—those that are acquired from vendors or other third
parties. The use of external data for marketing achieved a negative reputation.
At the same time, Google grew from an interesting experiment in categorizing online infor-
mation into the world’s largest search engine. The company began selling ads in search results in
October of 2000, eventually showing ads related to search parameters.” Both users’ search activities
and the advertising generated a wealth of data, which allowed Google's advertisers to target con-
sumers with increasing accuracy. As external email data was becoming deprecated, external data
generated by the advertising industry fast became an essential part of the marketer's toolkit.
Today, external sources are more varied than ever, and under increasing scrutiny. They provide
marketers with a rich source of data, yet, because they can involve the buying and selling of cus-
tomer data, they are also heavily regulated. Consumers are increasingly wary of how their data is
being used by companies with whom they have no prior relationships. And governments are con-
cerned about intrusions on consumer privacy too."! Not all external data is regulated, nor is all of it
perceived by consumers as a potential privacy risk. As marketers continue to leverage external data
sources, it's important to make ethical decisions about what sources to use and how extensively to
use them.
From Direct Mail to Ad Platforms: Supplementing Internal Data with External Databases
Ch
apterS and Research 63
Big Data
One of the most popular sources of external data for marketers over the past decade or more is big
big data
data. Big data includes any large dataset, typically with data measurable in terabytes (a thousand
gigabytes is a terabyte) or more. These large datasets can be mined using machine learning, a Includes any large dataset,
typically with data
sophisticated form of data analytics that uses powerful computers running complex algorithms, measurable in terabytes or
which are sets of directions, typically involving mathematical equations, most often in statistics, to more.
interpret data and make predictions based on the data in the dataset.
Advertising networks have historically been a chief source of big data for marketing. Using advertising networks
third-party cookies, which are small tracking codes attached to consumers’ web browsers, ad net- Networks that offer
works collected data on nearly everything a consumer did on the web, selling that data to advertising space across
companies. For instance, a third-party cookie might track every website a consumer visits, their multiple media.
social media usage, and their online purchases. That data might be paired with information about
third-party cookies
their location throughout the day, including stores they shop, gathered from phone data. All of this
Small tracking codes
information would then be processed by the ad network to predict which groups of consumers are
attached to consumers’
more likely to buy certain products, as well as predict the behavior of individual consumers. Brands web browsers.
with sophisticated internal data capabilities could obtain this data, too, match it with their own
data on those same consumers, and process the large datasets themselves to better predict what
their own consumers might do. Like ad networks, they could analyze both individual consumers
and segments of like-minded consumers, predicting their likelihood of being interested in specific
products, of buying from a competitor, defaulting on a credit card, and more actions relevant to the
brand.
In recent years, consumer groups have become concerned about the privacy violations that
this usage of big data can create.
me
MARKETING STRATEGIES
of External
Usage ee
apie eee
Data
not even the largest com-
Marketers leverage a range of external data sources. No organization,
about their markets. External data
panies, have all the data they need to understand everything
presents a rich opportunity for marketers to do the following:
- Enhance their internal data stores with additional dimensions. For instance, append income-
level data to an existing database of customers.
+ Gain insights from large bodies of demographic and psychographic data for trends that can
impact market targeting, product design, and positioning.
FIGURE 3.1 Usage of External Data
Enhance
Internal Customer
Data Database
Analyze
Market
Large
Targeting
Data Sets
Market Design and

Impact Positioning
3.2 A Closer Look: Finding the Right

Markets
Chapter 3 From Direct Mail to Ad Platforms: Supplementing Internal Data with External Databases
and Research 65
Julie McSpring started her dog-grooming store, Spring Fresh Pooches, eleven years ago. Back
then, she relied on word of mouth to market her business, along with ads she placed in the local
newspaper. Now, competition is stronger in her community, with a big chain pet product retailer
Opening up at the new shopping center, bringing with it their pet-grooming services. “It's time to
tell local pet parents that our services are the best,” Julie says to her friend, Bill. “How can I do that,
though? If you take out an ad in the newspaper or even on Instagram, there's no telling whether
people will remember seeing your ad the next time their dog needs a bath.”
“You want to reach people when they are searching for dog baths and have an ad crop up in
their search results,” says Bill. “That way, they'll find you when they need you.”
“But we do more than dog baths,” notes Julie. “We do full-service—even poodle dos—and are
also a doggie daycare, and sell dog food.”
“Ok, so it looks like you may want your ads to show up when people search for all those things,”
says Bill. Julie is not so sure. Would having so many ads show up be expensive? And how many peo-
ple really search for poodle haircuts, anyway?
Bill and Julie sit down with a search marketing keyword tool to find out. One such tool is
Googles Keyword Tool. Google stores data on all the searches that occur using its platform as well
as all the clicks generated by the many ads companies like Spring Fresh take out on its platform
every day. That means a lot of data is available on what consumers search for online, how likely
they are to click on ads that target specific searches, and how many other advertisers are pursuing
visibility on the same search terms. Proprietary tools, such as SEMRush and SpyFu, also offer key-
word data, often with additional competitive analysis.
They find that every month, more than 82,000 people in their state search for “dog grooming”
while only 32,000 search for “dog baths.” More importantly, many of the people searching for “dog
baths” are actually searching for bathtubs for dogs! Looking at the number of searches nationwide,
it's obvious that “dog grooming” is the preferred term, with up to 4.4 million searches per month,
versus 1.8 million for “dog bath.” Clearly, positioning Spring Fresh as a “dog grooming’ business will
position it more accurately for the majority of consumers as well as helping to reach greater num-
bers of pet owners.
A different picture emerges when they examine the popularity of “doggie daycare.” Although it
is not as popular a term as “dog grooming,” garnering only 50,000 searches, ads for “doggie daycare”
are twice as likely to get clicked on than ads for “dog grooming.” Perhaps taking out ads target-
ing people searching for “dog grooming” should go hand-in-hand with additional ads for “doggie
daycare.” The data shows that it's still a popular term and one that gets people more interested in
booking an appointment.
“This is great!” says Julie. “Keyword research has really helped me to narrow down what my search engine
optimization (SEO)
customers are interested in, and how they describe my type of service. I was thinking about putting
up fliers in the community, as well, and knowing the key phrases in people's minds when they think The discipline of working
to ensure that websites
about getting their pets groomed will help with how I write the fliers." Even outside the context of appear in relevant
search advertising, knowing the keywords most popular with consumers pays strong dividends for consumer searches in
brands. Armed with keyword data, Julie now better understands the popularity of her services, search engines.
both regionally and nationally, as well as the terminology her customers use. She can use that infor-
mation to inform not just her advertising strategy, but also print materials, other ads, social media,
and her blog. Keyword data also plays a critical role in search engine optimization, or SEO, which
is the practice of attempting to get websites to rank higher in regular, non-advertising, search
engine results. All told, having accurate keyword data will be a great help to Spring Fresh’s market-
ing efforts.
3.3 Types of External Data

Marketers can obtain data from many sources outside their firms. The types of data most relevant
to marketers’ goals depend on the marketing channels they use, how rich their stores of internal
data are, and a range of other factors, such as budget and timelines. For instance, a brand that
wishes to send printed catalogs directly to consumers’ homes will need a database of accurate
postal addresses for relevant consumers, while an organization that seeks to measure potential
interest in a new coffee shop within a specific location may need market trends data on coffee sales
in the neighborhood. Many data sources are available to marketers today. The more popular exter-
nal data types for most marketers are the following:
1. Data brokerage data
2. Search engine data
3. Market information
4, Advertising platform data
FIGURE 3.2 Types of External Data
Data
Brokerage oo
Data
‘a Search
Engine
Data
External
Advertising Data
Platform
Data
Market
Information
Ch
From Direct Mail to Ad Platforms: Supplementing Internal Data with External Databases
Ast iti and Research 67
Data from Data Brokerages

One of the first uses of external data was for direct mail, marketing mail sent to consumers, some-
direct mail
times called “junk mail” when it is unwanted by the consumer. Direct mail includes catalogs,
Includes catalogs,
postcards, and letters sent by companies to addresses at which they think there may be consumers
postcards, and letters sent
who are interested in their products or services. Direct mail has always relied on external data pro- by companies to
vided by data brokers, also sometimes called list brokers. For instance, a garden center may addresses at which they
think there may be
purchase a list of local households with stand-alone homes, rather than apartments, with the idea
consumers who are
that a percentage of these households may have someone in them who is interested in gardening. interested in their products
They then send a catalog of garden equipment to each of these homes. or services.
Traditional data brokers maintain hundreds of lists of names and addresses, all sorted into cat-
egories that make it easy to guess the interests of the consumers on any list. They maintain lists of
people with children under age 10, people who have recently purchased new cars, people who have
just gotten married. Direct marketers can then target these consumers with mailpieces that may
interest them. The newlywed couples may get offers for a newer, bigger home from a real estate
agent. The families with children under age 10 may get a postcard from the local daycare, inviting
them in for a tour. The people who just purchased a new car may get coupons for better auto insur-
ance, a catalog of car accessories, or a coupon from a local car wash.
Data brokers get their information from many sources. A lot of the information is from public demographic
records. For instance, when someone buys a car, it must be registered, and anyone can access that information
information. The same goes for marriage licenses. Many data brokerages rely on public records for Personal information that
is stable and objective,
a significant portion of the lists they generate, especially when those lists focus on demographic
such as gender, address,
information—personal information that is stable and objective, such as gender, address, age, or age, or income.
income.
Another source of information on consumers used by data brokers are vendors. They may buy psychographic
information
a gardening magazines list of subscribers, including their names and addresses, then sell this infor-
mation on to other companies that sell gardening-related products. These lists are a valuable source Data about consumers’
tastes, attitudes, interests,
of psychographic information—data about consumers’ tastes, attitudes, interests, and prefer- and preferences.
ences.
FIGURE 3.3 Types of Data Available from Data Brokerages
Demographic Pyschographic
Data Data
Data
Brokerage
Data
Virtually any demographic or psychographic data is available from data brokers. Data on con-
sumers' shopping habits, products owned, ages, incomes, political views, and even health concerns
are bought and sold. This raises valid concerns about consumer privacy. Many efforts have been
made to legislate junk mail, including laws mandating that consumers can opt out of having their
data sold in certain circumstances. Nonetheless, direct mail remains a popular venue for reaching
consumers. According to the Direct Marketing Association, the industry group for those who cre-
ate direct mail, companies sent more than 80 billion pieces of marketing mail in 2018, with every
consumer receiving an average of two mail items a day. Nonetheless, direct mail can drive conver-
sions: According to the most recent study by the Direct Marketing Association, the response rate for
direct mail that utilizes external data is 4.9%."! Direct mail can use internal data, such as when com-
panies send out postcards, coupons, or catalogs to their existing customers. However, direct mail is
highly dependent on external data from data brokers to help companies reach new customers.

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“Second-Party Data”
Another term for internal data is “first-party data,” which means any data that an organization col-
first-party data
lected itself rather than acquiring it from external sources. Thus, we use the term “third-party
Another term for internal
data’ when referring to data collected from a third party, that is, from an outside organization, such data.
as a Facebook, Google, or a governmental source. A term that is used by some marketers for data
purchased from certain vendors is “second-party data.” This is not a term that all marketers use third-party data
when describing their data; some refer to all data from external sources as “third-party data.” How- Another term for external
ever, when marketers talk about second-party data, they refer to a specific type of data transaction: data.
purchasing another company’s internal data."! Second-party data is often produced by publishers.
Publishers, such as magazines, blogs, and news sites, maintain lists of all of their subscribers as part second-party data
of doing business. These lists represent consumers with specific interests that align with the topics Another organization’s
data purchased from the
of the publications and provide a valuable source of data for both the business-to-business (B2B)
organization.
and business-to-consumer (B2C) marketers.
Second-party data can be used alone, or it can be combined with internal or other external data
to better target consumers. For instance, a women's clothing company could purchase second-party
data on its consumers from various publishers to learn about its customers’ other interests. The
clothing company may learn from this second-party data that one-third of its consumers are avid
gardeners. This could lead to new creative campaigns. It may create a special list that targets its cus-
tomers whose names appeared on a purchased list of people who read gardening magazines. The
company could target this list with ads tailored to their interests, such as offers for flower-print
dresses or heavy-duty work clothes. Increasingly, matching second-party data with a company’s
own internal data is automated within a company’s data management platform, or DMP. We'll talk
more about DMPs later in this chapter. DMPs allow companies to combine data from different
sources, typically internal and external, to better understand their consumers needs.
o
‘KEYWORD
|
|
|
—TUTORIAL—

B2B Lead Databases
Business-to-business (B2B) lead databases are a special type of data brokerage data. These data-
business-to-business
(B2B) bases provide data on business professionals that can be searched by job title, company size,
company name, industry, and other business criteria. Salespeople commonly use B2B lead data-
A special type of data
brokerage data. These bases for prospecting—searching for potential customers for the product or service they sell. For
databases provide data on example, let's say you are a salesperson who sells cost-accounting software. You have several differ-
business professionals that ent types of software: One brand is for nonprofit organizations, such as charities, another is for
can be searched by job
title, company size, small businesses, and a third is specifically for manufacturing plants. All of these types of busi-
company name, industry, nesses have special cost-accounting needs, and the products you sell are specially designed for each
and other business criteria. type of business. That means that the potential buyers you really want to reach are the people in
charge of cost accounting for nonprofits, small businesses, and manufacturing plants. You dont
want to sell to anyone else, because the product is only suitable for these types of customers. What
you want to do is targeted sales outreach, a campaign of calls, emails, and postcards only to busi-
ness buyers who would be truly interested in your product.
A B2B leads database allows you to obtain names, job titles, and contact information for just
the business buyers that you wish to reach. For your software made for small businesses, you can
obtain a list of names of small business owners. For manufacturing plants, it allows you to gather
the contact information of the accounting teams for major manufacturers. B2B lead database com-
panies carefully search company directories, public information such as press releases, and other
organizational information to update their data on who is employed where, in what job role. These
companies normally charge a relatively substantial amount for their data. B2B sales are often large;
one major software purchase can be in the hundreds of millions of dollars. Thus, a single contact
that leads to such a large sale is very valuable. In addition, B2B lead databases are continuously
updated, at least partially manually, so the data is highly accurate. Because of its high quality, such
sources of data are valuable for many organizations.
Search Data
Every second of the day, 70,000 searches are happening on Google.” Consumers search for every-
thing from the location of the nearest pizza restaurant to the annual rainfall in the United States.
These searches generate a wide range of data, which marketers can use both directly and indirectly
to target the right consumers at the right time. Because keyword searches form the basis for search
advertising, data on keyword usage by consumers is widely made available to marketers by search
engines such as Google and Bing.
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oO
Google
How to use
Google Trends
Marketers spent more than $1 billion on search advertising, also called PPC advertising, in
PPC advertising
2020."! (Note: For this discussion, we'll be using the more accurate term “search advertising” for ads
Advertising on search
that appear alongside search results, even though in common conversations such ads are called engines.
PPC ads, or pay-per-click ads. PPC technically encompasses any ads for which advertisers only pay
when a consumer clicks on the ad.)
Among the most widely used external data sources are the keyword popularity statistics avail-
able from Google and other search engines.
Paid Search Data
One of the most popular tools for mining search data is Google's Keyword Tool, formerly known as
Keyword Tool
Keyword Planner. Marketers enter a search term that interests them, and the tool provides them
A specialized research tool
with estimates of the monthly volume of searches on that term. Data can be separated by region or provided by Google that
looked at globally. For instance, a marketer can determine how many searches consumers conduct allows marketers to
in a specific state, a country, or within a Nielsen Designated Market Area, or DMA. DMAs, devel- research the popularity of
specific keyword terms
oped by Nielsen for measuring television viewership, provide a convenient way of visualizing and compare them to
market areas using standardized nomenclature that aligns with the same geographic market areas other keyword terms.
used for TV advertising and other geographically targeted marketing.
Nielsen Designated
Market Area
Definitions developed by
Nielsen for measuring
television viewership,
providing a convenient
way of visualizing market
areas using standardized
nomenclature that aligns
with the same geographic
market areas used for TV
advertising and other
geographically targeted
marketing.
fe Marketing Analytics
The Google Keyword Tool provides rough estimates, as do proprietary tools

FIGURE 3.4 Search Data from vendors such as SEMRush and SpyFu. It may indicate that a search term
received between 10,000 and 100,000 searches per month, for instance. Narrowing
Keyword analyses by geographic area or a specific time frame of less than six months can
e Search Terms
Data increase the accuracy of Keyword Tool estimates. However, it is important to bear
e Search Volumes
in mind that the tool is more of an indicator of the relative popularity of terms
rather than an absolute number.
Data
Analysis * Global Searches Another key data point available using the Keyword Tool are recommenda-
* State and Country tions of similar terms that have been used in comparable searches. For instance,
a marketing manager may wish to know how many searches consumers perform
each month for “organic cereal.” They may be unaware of similar terms that con-
* Geographically Targeted sumers may use to describe the product. The Keyword Tool provides data on
Marketing
comparable search terms, such as “healthy cereal,” “sustainably grown grains,” or
“gluten-free cereals.” It includes the estimated monthly search volume for each
term. Thus, at a glance, a marketer can see a range of the most popular terms used by their target
market, along with estimates on the popularity of each term.
These proprietary tools can also provide estimates of keyword popularity as well as infor-
mation on frequently used search terms related to any given keyword. In addition, the tools can
provide a range of other data of use to marketers, such as what competitors are spending on search
advertising, the ads associated with each search term, and the bids that competitors are placing on
certain terms. These tools can be costly; however, for many marketers, they are an important source
of competitive data.
Organic Search Data

SEO is one of the most critical aspects of modern marketing for many organizations. How often
during the day do you search for something online? You might be running for the bus in the morn-
ing, and search for updates on whether the bus will be on time today. Later in the morning, you
might want to check out a new place to grab coffee, so you search for coffee shops nearby. At
lunchtime, maybe you need to order a birthday present for your niece back home. You know she
loves unicorns, so you search on your phone for “unicorn gifts for kids.” All of these searches are
important to connect companies that offer goods and services to you, a consumer looking for their
types of services. What results you find online when you search are determined by algorithms,
problem-solving calculations performed on datasets by computers. Search engine companies spend
millions of dollars every year looking at data on what people search for, what websites they visit,
and what makes for a useful, relevant site that a consumer would find helpful. All of this data then
gets processed millions of times a second to show you your options when you look for a coffee shop
or that unicorn gift.
Companies put in a significant effort to show up when you search online. After all, if you don't
see them when you search for products and services, that is a missed opportunity for you to find
out about them. The science and art of landing at the top of search results is what SEO is all about.
Research shows that 97% of consumer spending goes to the companies that appear on the
first page of Google's search results page."! Few consumers ever look at the second or third page of
search results, so it's critically important for companies to appear near the top of search results.
Earlier in this chapter, we learned about Google Ads tools and how data on search ads is helpful
to marketers. We learned that companies can place ads that appear alongside search results. How-
ever, many companies want to appear in their own right in the actual search results. These regular
search results, which are not ads, are called organic search results. These are the websites that
Google, Bing, Yahoo, and other search engines have determined are relevant to a consumer's search
for products, information, or services, so they show these results to the consumer without the com-
pany having to pay to be listed. Appearing in organic search results is an indication that a search
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engine's algorithm has found the site to be of appropriate quality and relevance that consumers
should know about it.
When companies try to become more relevant according to search engine algorithms, their
first step is to look at search engine data. The algorithms that determine search rankings are
driven by data, so companies need to be data-focused to rank highly according to these algorithms.
Organic search data can provide much useful information:
* How prominently any website ranks in search engine results for specific searches
* The relative positions of a company's competitors in search results
+ Lists of specific web searches that are sending web traffic to a website
+ Metrics on how many people search for a given topic in any month or year
+ A list of websites linked to a company's own website—an important indicator of a brand's pop-
ularity and credibility
Certain technical, code-level issues with a company’s website that may lead to poor user expe-
rience
For website owners, Google's Webmaster Tools and Search Console, as well as proprietary tools
such as MOZ and SEMRush, provide rich data on a website's positioning in search engines and the
effectiveness of this visibility in search results in driving customers to purchase:
* Which keywords consumers searched on the most to find the company’s webpage
¢ How often a given webpage appears in search engine results pages (SERPS)
¢ Whether any technical issues, such as missing code, are impacting search engines’ ability to
index a website.
Market Information
Many of the key sources of external data provide market information. Marketers often seek to
determine trends in advance of their competitors in order to meet consumer demand by anticipat-
ing products and services that will be popular in the near future. In addition, looking at current
trends can help predict prices, inspire new creative ideas, and keep the company ahead of its com-
petitors. In addition, companies seek to identify the current state of markets in order to determine
elements of the 4Ps, such as new distribution channels, new markets to enter, and regional trends
to address with different product features.
Marketers rely on many sources of information, particularly the following:
« Analyst reports
¢ Market research firm reports
- Trade publishers’ reports
« Governmental, think tank, and academic data
- Search engine and social media tool trend forecasting, such as Google Trends
These sources of data allow companies to develop a comprehensive view of the economy, con-
sumer tastes, and the global marketplace. They range from costly to free, so companies will vary in
what data sources they use.
Analyst Reports
expertise in differ-
Analyst firms such as Forrester Research employ teams of researchers with deep
on sectors of the economy.
ent industries. These firms produce reports with comprehensive details
of top com-
An analyst report typically covers the outlook for growth in an industry, the strengths
panies in the field, and the product or service features they anticipate will see the highest demand
in the near future. Because of the extensive research that goes into creating an analyst report, they
normally are published annually and cost in the thousands of dollars for a copy. These reports are
valuable to many firms, especially B2B companies, as general market intelligence.
In addition to larger generalist analyst firms, many smaller companies focus only on a single
sector or closely related group of them, such as focusing only on the fashion industry or energy and
utilities. Analysts from both large and specialty firms also consult with companies, providing qual-
itative and quantitative information based on their areas of expertise.
Trade Publishers’ Reports
Many B2B marketers rely on research reports from trade publishers. Every job you can think of,
trade magazines or
trade journals from veterinarians to truck drivers, has at least one magazine devoted to that job. These publica-
tions, called trade magazines or trade journals, are typically distributed free or at low cost to
Publications typically
distributed free or at low verified people who have the jobs addressed by each publication. Trade publishers typically pro-
cost to verified people who duce a dozen or more magazines or online portals for people in different jobs. They attract readers
have the jobs addressed and advertisers by providing expert news on their industries. However, they also provide a great
by each publication.
deal of expert data. Drawing on their audience's sense of community, they conduct much research
on readers’ job satisfaction, buying patterns, and professional interests. These reports provide B2B
marketers with valuable data on industry trends. Marketers can purchase these reports; many are
also published free in the magazines themselves. While data from trade publishers is highly
detailed, some marketers prefer analyst reports because they may provide more analysis; there is
also a belief that analyst reports are more objective.
Governmental, Think Tank, and Academic Data
The U.S. government publishes a great deal of data that is of value to marketers. For instance, the
U.S. Census is more than just a count of how many people currently live in the United States. The
Census also collects data on families’ living arrangements, such as how many generations are liv-
ing under one roof. Analyzed by geographic area, this can help marketers find places where people
have large families, if they have a product geared toward large households, for instance. The Census
also collects a large amount of economic data, such as average incomes for a geographic area, the
types of businesses most prevalent in any region, and local residents’ levels of education by region.
This can help the marketers of many different products.
Let's say you work for an appliance manufacturer. Your company has developed a new washing
machine that can handle 50% more laundry than the average washing machine. Your product is
sold through retail stores. The washing machines are expensive to ship across the country, so you
need data to see where they are most likely to be popular sellers. Data from the U.S. Census can
tell you what cities have more large households that need large washing machines. The same Cen-
sus data can also tell you which of those cities also have high average incomes, making the product
more affordable. This data will help you determine where to start selling your products.
The U.S. Census is only one governmental body that gathers data of value to marketers. Among
other agencies that collect economically valuable data are the Bureau of Labor Statistics, which
produces data on jobs in the United States, including the number of openings for any role, pay
scales, and the education levels of typical employees. The Department of Commerce produces data
especially valuable for trend forecasting, such as the growth of various industries, factors that
impact the costs of raw materials, and import/export data. The U.S. Patent Office shares data on
new inventions that have received patent protection, including the names and companies of inven-
tors, which is valuable competitive data for many organizations.
In addition to government-collected data, many academic institutions collect data, making it
available to industry professionals. Virtually any information you can think of has researchers
and Research
working on studying that data and publishing their results in academic journals and
sometimes on
their own websites. From data on how many U.S. parents live witha disability to the average rainfall
in every county, academic researchers gather data every day. Finally, private research institution
s
often called think tanks, also conduct their own research. Many such think tanks are dedicated to
furthering a specific worldview, but many are focused ona particular area of life, such as education
sports, or health. Their reports are rich sources of data on social, economic, and industry Teme
This data can help marketers understand consumers, predict demand for products, and forecast
industry trends.
Few marketers make full use of academic, governmental, and think tank data. Using such data
can give a marketer a competitive advantage. It's a rich data source for seeing the larger picture of
a company's position, allowing for more robust strategic decisions.
Advertising and Search-Derived Big Data

Sources
wretlert
Google Trends and Other Digital Trend Tools
Accessible to all for free or at low cost are trends tools not as powerful as analyst or other pro-
prietary data, but useful tools for estimating the popularity of Google search terms, social media
hashtags, and other short-term trend data.
Marketers often use social media management tools to measure their own social media pro-
grams. We will learn more about these uses of the tools in the chapter on social media metrics. Most
of the tools companies use to measure their own social media can also help them forecast trends.
They can measure what hashtags are most popular in a specific region. They can show the popu-
larity of topics by region or the popularity of specific accounts. These can help companies know
how well their competition is doing on social media, what consumers are talking about, and how to
capitalize on trends.
Googles Trends tool is a platform that gives visibility into trending topics among consumer
the past
online searches. For example, it can show how popular searches for the World Cup are over
you see in the example, visu-
week or year or map the growth in global interest in cupcakes. As
alizations can be in map form, as charts, or as tables. This data can help forecast trends so that
companies know what is of interest to consumers.
One important use of trend data is for creating new products and services. Look at the exam-
ple below. Let's say you run a bakery. You might be wondering whether to develop a new line of
cupcakes. Google Trends data shows that searches for cupcakes are less frequent than they were
formerly, making it less likely that a new line of cupcakes would be as popular as it would have
been when cupcake searches were more common. You could analyze the data by region, looking
for geographic areas where cupcakes are still trendy. Or you could explore the data further, looking
for related products that are trending up, creating new products in line with global trends. Regard-
less of what path you choose, trends data will provide you with general market information on
which to base decisions. Using the Compare feature, you see that pies are certainly surpassing cup-
cakes in popularity as a global search term. Armed with this data, what new product line would you
develop? How would it impact your decision to look at trends by region?
Another use for trends data is in messaging. Developing new products can take a long time.
However, marketers create new messaging seasonally, sometimes every few days, to reflect trends
in the marketplace. Let's say your bakery decides to go ahead and create a new line of pies, based
on the growing popularity of online searches for them. Remember that Google Trends offers only
data on how many times a specific term is searched, not sales for a product or the profitability of an
industry or product type. To obtain that more specific data, analyst reports, publisher research, or
market research firm reports are needed. However, you want to know how often people look online
for different pastries, so Google Trends is helpful to you—as well as costing nothing.
FIGURE 3.5 Trend Data
Creating new :
products and Messaging
services
Trends
Data
Now, you need to market this product. Trends data from social media tools shows you that
mentions of “pie” often coincide with hashtags such as #bestlife, #friends, and #restaurant.
This tells you that consumers see eating pie as a social activity. You decide to filter out men-
tions of people baking their own pies; you want to reach only people who want ready-made options.
By analyzing this other trends data source, you glean effective ideas on how to position your prod-
uct. If your consumer sees pie as part of social activity, it makes sense to create ads that show
friends around a table, enjoying your product. Further, you now know what hashtags to
use in
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future social media posts. The idea of connecting with friends over pie can become part of future
taglines, ad campaigns, and even store signage. Trends data can guide marketers how best to appeal
to their target consumers, by positioning products in ways that aligns with the trends that matter
to customers.
Advertising Platform and Audience-Buying Data
One of the most powerful sources of external data for companies are advertising platforms such as
Facebook and Google. These platforms aggregate data on consumers; advertisers who wish to reach
certain groups of consumers can then place ads using these platforms. For instance, an advertiser
might want to reach people who are shopping for a new car. An advertising platform will monitor
the web behaviors of millions of consumers, gathering data such as the following:
¢ What websites they visit
¢ What they search for in search engines
¢ What they like or share on social media
This data can create a profile of a consumer's interests. If someone searches for “new car prices,”
visits the websites of several car dealerships in one week, and starts following the social media
profiles of car manufacturers, that may be an indicator that they wish to purchase a new vehicle.
Formerly, this data was collected using cookies, or small pieces of code installed by the ad platforms
on consumers’ browsers, often without much awareness or consent from consumers. It would
be sold to companies, who would then be able to create targeted ads across the web. However,
today, these “third-party cookies” are blocked by most browsers. Thus, intrusive data on consumers
collected using these cookies is a thing of the past. Reaching consumers often now depends on uti-
lizing one of the major ad platforms, such as Facebook, to tap into their vast data on their users’
interests.
Advertising platforms aggregate this data. Advertisers can then utilize the ad platform to reach
consumers who are in the market for a new car. This is called audience buying. Instead of placing
an ad for their new cars on popular websites where they are visible to all consumers, a car company
may “buy” an audience consisting of consumers whose online behavior indicates car-purchasing
interest. The company’s ads may still appear on the same popular websites, but now they will only
be shown to consumers on whom the ad platform has collected sufficient data to indicate that they
are interested in cars.
Many ad platforms combine data from a wide variety of sources. They may match a consumer's
web browsing history with data on their location and offline behaviors, such as visits to stores,
parks, and public places, to produce a rich picture of that individual's interests. For example, an ad
management platform may track that a person shops online for women's clothes, lives in an afflu-
ent ZIP code, and often goes to a park in the city center at lunchtime.
As you see, a lot of information on consumers is gathered daily. This can include data that
consumers do not know is being collected. It also allows companies to market to consumers using
personal data that the consumers did not disclose to the company itself, but was bought by the
company for advertising purposes. Consumer watchdog groups cite this data usage as intrusive.
Many consumers are uncomfortable knowing that they are being tracked this closely. This raises
ethical questions for marketers. We will explore these questions in the next section.
3.4 Integrating External and Internal

Data
According to research published in the MIT Sloan Management Review, businesses that pair inter-
nal and external data are the most successful in utilizing data overall. The reason is that few
organizations have all the data they need to make decisions."" As discussed early in the chapter,
building analytics programs that integrate internal with external data can provide the perspective
and vital information that organizations need to understand their markets and consumers. In this
section, we will examine some examples of how internal and external data work together for com-
panies.
Pairing Search and Web Analytics Data

When paired with web analytics data, search data can also show marketers the following:
¢ Which keywords brought the most profitable customers to a website
- What percentage of a site's web traffic originated from consumer searches in search engines
« How profitable customers who found a website via search engines are, in contrast to customers
who were acquired through other marketing channels, such as advertising or social media
Organic search data helps companies be more visible to consumers who search for specific
products, information, or services online, but that is only part of the story. This type of data also
helps companies understand consumer psychology. Lists of keywords, or the specific words that
consumers type into search bars to find the information they seek, can tell a company how cus-
tomers talk about any type of products. Let’s go back to the example of Spring Fresh, our dog
grooming company. They learned that people searching for “dog baths” were actually searching
for bathtubs for dogs. That helped Julie narrow down the words she should use to describe her
services. To most consumers, “dog grooming” is the preferred term. Such keyword research helps
companies speak their consumers language, literally. Search data also helps companies understand
their competitors’ positioning better as well as see what other organizations may be linking to their
websites. She can then pair this data with her web analytics data to understand whether content
on these terms is more likely to convert. For instance, if she finds that blog posts on “dog grooming”
get a lot of views, but those views dont lead to customers booking appointments, she may come
to understand that her consumers dont really use this popular term. Instead, she can compare the
most popular terms in web searches with the most popular subjects on her blog to understand how
her consumers align with, or differ from, typical consumers. Let's say, for instance, that she sees
that “high-end pet care’ is a relatively popular search term online, using search data. Looking at her
web analytics data, she sees that website visitors who read her posts on luxury skincare for dogs are
50% more likely to book an appointment than her typical website visitor. Using this information,
that a term is both popular in general and leads to sales for her business specifically, she decides to
focus on promoting her business as a luxury dog spa. Her sales grow by 15% the following months
because she used web analytics and search data together to identify a profitable, popular niche for
her brand. Thus, organic search data is a critical tool for marketers to integrate with their internal
data.
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Using External Data on Consumers with

Internal Data
As we learned earlier in the chapter, some external data is uncontroversial: Search engine data and
analyst reports tend not to include consumers PII. It is the acquisition of consumers’ PII by com-
panies that is the controversial aspect of using external data for marketing. In general, consumers
expect that when doing business with an organization their data will not be shared with compa-
nies with which they have no relationship.” Why would companies use data that could potentially
violate consumers privacy expectations? The reasons are typically practical:
+ Companies may have incomplete data on their consumers. For instance, they have data on
purchases made by the consumer on the company’s own e-commerce site, but no general infor-
mation on a consumer's demographics.
+ Companies want to gain a greater share of wallet for each consumer. To that end, they wish to
know which of their competitors are attracting the consumer's attention.
* Organizations are unsure of how accurate their data is and wish to validate it with data from
respected vendors that have more robust data-collection practices.
* Brands wish to reach a much larger audience than those consumers on whom they have col-
lected data. They may wish to reach all men 34-55 in a geographic area, for instance, and have
few consumers who meet those characteristics in their own databases.
The goal for using external consumer data, including PII, is often connected to meeting a com-
pany’s revenue goals. Nonetheless, companies need to proceed with caution when obtaining data
on consumers when those consumers have not opted in to receiving messages from a specific orga-
nization.
3.5 A Closer Look: Entering a New

Market
MirCo is the world’s third-largest producer of software that helps large office buildings optimize
their energy usage. Their platform collects data from a building's heating, ventilation, and air condi-
tioning (HVAC) systems, such as thermostat readings, and allows building managers to understand
how energy is being used throughout the building. For instance, the system can flag when elec-
tricity use is especially high in a particular part of one floor, allowing facilities teams to determine
whether natural lighting needs to be improved in the area.
Their target customers are building owners, facilities managers, and HVAC engineers. Recently,
however, MirCo CMO Jeff Nguyen attended a workshop for green building consultants and became
interested in marketing to these professionals. “Are you sure this is a big enough market to bother
with?” asks CEO and founder Adaliya Walters. “It's expensive to create brochures and train the sales
team to win customers in a new market. Before we invest in reaching green building consultants,
we want to be sure they're a potentially profitable market.”
“We dont have information on this market in any of our internal data sources,” thinks Jeff,
“since we have never marketed to them and dont really know anything about them, other than
they seemed interested in this kind of product in the meeting.” Jeff and his assistant, Edith Wynn,
decide to look at external data sources to get the answer. Their first step is to look at the search vol-
ume for search terms related to “energy efficiency software,” but they dont get far. While the data
does tell them how many people search for the type of software that MirCo makes, it doesn't tell
them who these people are. Still, they now know the relative popularity of the term and know that
their sales are nowhere near the level of actual interest in the product. It stands to reason there are
more customers out there. But are they green building consultants?
Their next step is to approach Stephanie Gonzalez, the publisher of Green Building Consultants
Monthly, a print and web trade publication for these professionals. For a fee, her team shares with
Jeff and Edith their recent research reports, which show that 79% of her readers are looking for
software that “makes their jobs easier.” That might describe MirCo’s product. Still, they need to dis-
cover whether this market is for them, and although each piece of external data has given them a
clue, they need more information.
Edith uncovers a report from a think tank that researches the sustainable building industry. “I
think I found the proof that we're on the right track!” she messages Jeff. The report, conducted a
year before, outlines the top areas of concern for green building professionals. At the top of the list,
cited by 80% of respondents to the think tanks survey, is the need for software to manage sustain-
able energy usage. Paired with search data, the trade publication's research, and Jeff's observations,
this data indicates that there likely is interest.
Adaliya is convinced that the team should try a small marketing campaign to reach some
potential clients. It's time for Jeff and Edith to turn to more external data sources: They turn to
social media. When they start placing an ad on LinkedIn targeting green building consultants in
their region, they find 30,000 such professionals whom they can target with an ad. Further, they
find that several groups on LinkedIn cater to consultants in this field, with membership in the tens
of thousands. The audience is certainly fairly large. They consider turning to a data broker to obtain
the names and contact information of their target consultants but decide against it, feeling it vio-
lates MirCos ethical guidelines to buy PII.
Using LinkedIn as their first campaign, they target green building consultants with an invi-
tation to attend an hour-long online presentation about new green energy sources. They are
careful to avoid a sales pitch for the company, instead focusing on factual updates on key industry
trends. The workshop is a hit: 200 consultants attended, with thirty becoming customers within
six months. Soon, the team is holding monthly calls to update consultants on green building trends,
connecting with thousands of consultants yearly. These connections lead to so much new business
that MirCo hires three new sales team members, grows revenue by 20%, and launches a new prod-
uct just for consultants.
“It would have been risky to launch a new line of business without data. The research you
did helped us see the way to new growth. Thanks to external data, we were able to validate this
new opportunity, expand our business, and fulfill more of our mission to create a green future,”
says Adaliya. “You know, Jeff, you and Edith really deserve raises. Your hunch, and the thoughtful
research that proved it had potential, brought our company to a new level.”
3.6 Do the Math: Estimating Market

Size
total addressable
One use of different external data sources is estimating the market size for a product. Knowing the
market (TAM) size of a specific market can help organizations determine what products to develop, estimate rev-
The entire size of the
enues, and create marketing budgets. Let's look at an example: Imagine you've invented a new
demand for a product. vegan alternative to cream cheese. Although you may feel that everyone in the United States
should love your product, it's most likely that this product will appeal best to vegans, people who
do not eat dairy products for other reasons, and potentially health-conscious eaters. It's important
to know how many people who fit this description you can count on to be interested in your
type
of products. You want to know how much of the product you could possibly sell, for instance.
If the
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market is very large, you know that lots of sales are possible. If, on the other hand, the potential
market is small, you will need to make less of the product, you will spend less on marketing, and
you may see smaller sales; however, a small market may still be attractive because you can easily be
the biggest supplier in that small market, where there is less competition. Knowing the market size
is key. The first step is to identify the total addressable market (TAM), also called the total avail-
able market. This number is the entire size of the demand fora product.
To estimate total addressable market, the math is simple: First, you will add the estimated
number of vegans in the U.S., plus the number of people who identify as allergic to dairy, along with
other people who identify as healthy eaters. Where it gets complex is finding those statistics. This is
where external data is a marketer's best resource. Nearly every interest and demographic is tracked
by at least one organization, whether it's a research firm, a publication, or a governmental program.
Being familiar with external data sources in your industry can help you quickly identify the facts
on how many consumers exist who fit the profile of your ideal buyer.
For your vegan cheese, you can look to statistics from leading vegan publications, reports from
consumer research organizations, and possibly academic research on consumer eating patterns.
Looking at a variety of sources is key. Sources may vary on the numbers they provide. A vegan
publication may say there are 10 million vegans in the United States, based on the number of their
subscribers. An academic researcher may have found only 8 million. Often, these differences in
numbers reflect a difference in methodology: An email survey can get a lower response rate than
a Census form, for instance. It’s important to evaluate all external data sources, no matter the pur-
pose for which they are used, critically. Look at how the numbers were arrived at and whether the
source may have biases.
Once you have added all the likely numbers for your different customer groups, you now
want to multiply: What percentage of this market do you think you can penetrate, that is, win the
customers in that market? Few companies achieve 100% penetration—that is, winning over every
single customer in the market. Instead, companies aim for a percentage of the market. Think about
a realistic percentage of the market that you can win.
Let's say there are 10 million vegans in the United States, and you estimate that, with good mar-
keting, you can achieve a penetration rate of 30%. That means that 30% of all vegans in the U.S.
would buy your vegan cheese. That makes your potential market 3 million consumers:
TAM x Penetration Rate=Market Size
EQUATION 3.1 Vegan Cheese Example

3 million x 52 = 156 million units of vegan cheese
Now, you will want to know how much revenue you can expect from that market. Let's multi-
ply again. This time, multiply your sales volume by price. Maybe you sell your cheese for $5/tub.
Potential Sales Volume x Price =Potential Revenue
EQUATION 3.2 Vegan Cheese Example

156 million units x $5 = $780 million
Vegan cheese is a niche market, and yet, with a market penetration of 30%, you may make over
$780 million per year in revenue. If you were determining whether to launch a new line of vegan
cream cheese, this would potentially be a good market opportunity. Now that you know the poten-
tial revenue, you can factor in the costs of production to arrive at your net profit. For instance, let's
say it costs $500 million in raw materials to make 156 million units of the cheese, transport it, and
promote it—that $500 million is the total cost associated with the 156 million units of the product,
including every expense:
$78 million — $500 million = $280 million profit

ty, one that merits
Doing this math, the company has identified a very attractive market opportuni
further exploration.
3.7 Conclusion
External data is critical for many companies’ overall data-driven marketing. External data sources
can provide competitive information on other organizations’ positioning, popularity, and strategy.
Other data sources can help brands forecast trends, understand consumers’ perceptions of their
products, and become more visible when customers search for products and services online. Exter-
nal data also tracks consumers, making certain data types controversial. Whether expensive, such
as analyst reports, or free, such as Google Trends, external data is available to marketers with all
types of data budgets.
When using external data, marketers need to identify their strategy. They may wish to under-
stand their markets. They may seek to target specific types of consumers—those most likely to buy.
They may want to identify the language, images, and promotions that attract customers, based on
current trends. Or they may simply aim to better understand their customers—their needs, pref-
erences, and buying behaviors—in order to meet those needs more completely. Whatever the use,
external data is powerful, effective, and strategic for the majority of organizations.
1. What are some of the reasons why organizations might use external data? Name three rea-
sons.
2. You have been hired as an external consultant to PinCo, a new brand of hair accessories.
You want to understand the overall market for hair accessories: How large is the market?
Who is the target customer? What types of hair accessories are most popular? Where do
consumers like to buy hair accessories? Outline five external data sources that you would
use to obtain this information. How would you use these sources?
3. How do marketers use big data in marketing?
4, What are third-party cookies? How do they relate to the use of external data in marketing?
What is problematic about third-party cookies, to the extent that they are becoming disused?
5. What are some of the ways in which big data usage is changing in response to the end of
third-party cookies?
6. What is a data brokerage? What are some of the benefits of using a data brokerage?
7. Should consumers feel comfortable about the amount of data that data brokerages collect
about them?
8. Should brands be allowed to use data brokerage data to target consumers? Why or why
not?
9. What is the importance of B2B lead databases? How do sales teams and marketers use
them?
10. What are keyword research tools? Describe how you would use them to understand a
brand’s market and competitive landscape.
11. Describe the differences between paid and organic search data. How do brands typically
use these data sources?
12. Why is it important to check governmental data sources when researching?
13. Name at least two governmental agencies, think tanks, or analyst firms that marketers may
rely on for data. Describe the data each of them provides.
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14. Select a brand that you admire, and define its industry. For instance, if you selected Sephora,
they are in the beauty industry. Using one governmental source, one analyst firm source, and
one trade publisher's data, create a brief outline of the current state of your selected brand’s
industry. Describe as best you can what the size of the industry is, key issues facing compa-
nies in the industry, and why it is or isn’t a good investment to start a brand in that sector.
Back up all your findings with data you found in your research.
15. What is Google Trends?
16. Pick a topic that interests you. Search for that topic using Google Trends. What information
did you find? How have searches for that topic changed over the past year? The past five
years? If you were marketing a product related to that topic, what does the Google Trends
data suggest to you as a strategy for developing and promoting the product?
VF. What is TAM? Why is it important for a brand to calculate its TAM?
18. How would you use TAM in developing a product line for a new company?
19. What data points does a company need in order to estimate potential sales for a product?
What about potential profits for that specific product?
20. You have decided to start your own side hustle over the summer. You will be helping people
style themselves for online job interviews, including their hair, makeup, clothing, and back-
ground or room environment. Your family and some of your friends think this is an exciting
idea. However, your roommate cautions you that you need to do some research before
launching this business, to ensure that it’s something consumers will pay for in enough num-
bers to provide you with a reasonable income. Outline the steps you would take to research
the market for your business idea, using the external data sources you just studied. Be as
specific as possible, including mentioning the exact sources you would use at each step.
What data would you look for to confirm your business idea is a good one?
. Gould, Summer. “Direct Mail Planning for Your 2020 Marketing Goals.”
BRAND United, January 9, 2020, https://www.brandunited.com/article/
Endnotes direct-mail-planning-for-your-2020-marketing-goals.
. “4st Party Data, 2nd Party Data, and 3rd Party Data.” Lotame, May 5,
2021. https://www.lotame.com/1 st-party-2nd-party-3rd-party-data-what-
does-it-all-mean/.
. Prater, Meg. “25 Google Search Statistics to Bookmark ASAP.” HubSpot
Blog, February 18, 2020. https://blog.hubspot.com/marketing/google-
1. Kindervater, David. “The History of Direct Mail Marketing.” MSP, April 13, search-statistics.
2021. https://www.msp-pgh.com/history-direct-mail-marketing/. . “Search Advertising—Worldwide: Statista Market Forecast.” Statista.
2. “CAN-SPAM Act: A Compliance Guide for Business.” Federal Trade Com- https://www.statista.com/outlook/dmo/digital-advertising/search-adver-
mission, January 15, 2021. https://www.ftc.gov/tips-advice/business- tising/worldwide.
center/guidance/can-spam-act-compliance-guide-business. . Southern, Matt. “Over 25% of People Click the First Google Search
3. Marvin, Ginny. “Google AdWords Turns 15: A Look Back at the origins Result.” Search Engine Journal, July 16, 2020. https://www.searchengine-
of a $60 Billion Business." Search Engine Land, July 28, 2016. journal.com/google-first-page-clicks/374516/.
https://searchengineland.com/google-adwords-turns-15-a-look-back-at- . Brown, Sara. “Why External Data Should Be Part of Your Data Strategy.”
the-origins-of-a-60-billion-business-234579, MIT Sloan, February 18, 2021. https://mitsloan.mit.edu/ideas-made-to-
4. Murgia, Madhumita. “Marriott to Be Fined £99m for GDPR Breach.” Finan- matter/why-external-data-should-be-part-your-data-strategy.
cial Times, July 9, 2019. https://www.ft.com/content/ . Davis, Kord. Ethics of Big Data. Beijing: O'Reilly, 2012.
961 19a36-a263-1 1 e9-a282-2df48f366f7d.
CHAPTER 4
The Data Engine of Search
Learning Objectives

1. Describe the key types of organic data used in SEO and PPC marketing.
2. Understand the application of search data both to optimizing search engine marketing and
to marketing programs as a whole.
3. Differentiate between the use of search data for website optimization and the use of search
data for content, marketing funnel, and product applications.
4. Conduct an SEO audit or a keyword conversion analysis.
Search engine marketing: Once the specialty only of highly technical marketers, it is now a key
component of inbound marketing strategy. Consumers turn to search engines in nearly half of
their online purchase journeys." Companies that practice inbound marketing focus on drawing
customers to their online or offline presence when they are already interested in finding products,
rather than creating “push” marketing messages such as advertisements, designed to convince cus-
tomers to be interested in their offerings. In order to attract customers when they are ready to buy,
a steady presence in search engines is a must. Even companies that balance inbound and outbound
marketing need to be visible when customers search for their services. Whether it's a corner cof-
fee shop that shows up when thirsty patrons search on their phones for “coffee shop near me” or
a sophisticated software platform that needs to be visible in specialized online research, organiza-
tions need a search presence.
In this chapter, we will focus on data related to organic search marketing. Recall that organic search engine
search engine results are those that are not paid for; instead, they are results selected by a search optimization (SEO)
engine algorithm for their relevance to a users’ search query. Although organic results are the prod- The discipline of working
uct of algorithmic selection, and cannot be bought, they can be optimized. That is, companies can to ensure that websites
appear in relevant
take steps to ensure their site appears in search results when their target customers seek out prod- consumer searches in
ucts and services. As a practice, efforts to respond to search algorithms to increase a sites search engines.
opportunities to be selected as a top organic search result are called search engine optimization
(SEO).”' It is a key field within marketing: Worldwide, companies spend $47 billion yearly on organic
search optimization, while marketers spend more than $170 billion a year on paid search."
Companies need data for effective SEO, as with any marketing channel. As we learned in Chap-
ter 1 and Chapter 2, however, search marketing data, because it captures the broadest swath of
consumers’ online inquiries, also provides marketers with deep insights into many consumer needs.
In this chapter, we will explore organic search data, along with its uses both for SEO and as a data
source for marketing as a whole.
In Chapter 3, we looked at external data sources, which include data from paid search market-
ing platforms. We reviewed keywords, which are terms used input into search engines to find what
information. We learned about how to find out the popularity of certain keyword searches among
consumers. Did you know there is much more data available to marketers related to consumers
online search behavior? And did you know that there are two disciplines related to marketing to
consumers via search results, each of which generates related, but often different data? This search
data is one of the richest sources of data for marketers.
4.1 The Data Engine of Search
SEO and PPC: Know the Difference
To understand the rich world of search data, we first need to discuss the differences between the
pay-per-click (PPC)
two types of search engine-based marketing: paid and SEO. Both disciplines focus on ensuring that
Advertising on search
engines.
the right brand message appears in front of consumers when they search for products and services
online. The difference is whether the efforts center on advertising within search engines, or on
appearing naturally, in the actual search results offered by the search engine. When marketers’
focus is on creating effective ads to appear in search engines and on the web, in front of consumers
who have conducted specific searches, that's called paid search marketing. It’s also called
pay-per-click (PPC) advertising, since most often, advertisers pay only when consumers click on
ads, paying for each click.
search engine When marketers try to appear with their messages in search engines, they dont always aim to
marketing (SEM) advertise. Many companies would say it's more desirable to appear in the actual search results.
SEO and PPC together; While no company can fully control whether and where they are indexed by a search engine, a host
marketing focused on of best practices can greatly increase a website's chance of appearing nearer the top of search
appearing in search
engines.
engine results. Marketers focus on following those best practices to improve their visibility in
actual search results instead of advertising with search engines are practicing SEO. In marketing
parlance, actual search results are called “organic” search results to distinguish them from paid ads.
Thus, sometimes SEO is also called “organic search” for short. Together, PPC and SEO are called
search engine marketing (SEM).
oO
Which is Better For Your Business?

The Importance of Search Data in

Understanding the Customer Journey
Because most consumers start their search for new products online," SEM is a
major focus for many marketers. Since every online search generates a rich data FIGURE 4.1 SEO Versus PPC
trail, including the exact terms searched, the time of day and location of the :
search, and, often, the searcher’s identity, SEM has long been one of the most
data-driven marketing channels. However, many marketers do not fully leverage * Advertising within search engine
the rich data generated by search marketing to inform their overall marketing i
strategy. That means that many marketers are losing out on critical data that can
improve their marketing. In this chapter, we will look at how to use search data, * Organic search results
especially SEO-related data sources, as part of overall marketing strategy. We will
also look at how to use search data specifically to improve SEO and PPC campaigns.
This chapter will focus primarily on data types related both to SEO and PPC, with a focus on
SEO data. The goal with this chapter is not to make you a search marketing expert. It's to give
you the data tools from search marketing that inform broader marketing strategies across multiple
channels. Paid search is a highly technical discipline with its own specialized datasets, many with
lesser application to marketing strategy as a whole. In this chapter, we will focus on those aspects
of SEO and PPC most relevant to marketers across all disciplines.
4.2 A Closer Look: AccountCo
June Richards founded her software company, AccountCo, with one goal in mind: to provide the
best billing software for service businesses worldwide. Whether her customers are a landscaping
business or a law firm, if they provide services rather than selling products, AccountCos signature
program, ServAccount, makes it easy for them to send out invoices based on common service-busi-
ness billing strategies, such as time and materials.
Lately, June has become aware that fewer prospective customers are finding her company
online. “Most of our customers come from word of mouth,” says June to her web designer, Sally
Phillips. “They used to find us via web searches. Now that traffic has dropped off; sales are hurting
as a result. Could it be something about the website? I did an online search, and were not showing
up when I search for ‘accounting software. It’s all big brands that appear. What's happening?”
Sally has seen this before. Many companies show up in fewer web searches as their competi-
tion begins to rank higher, often through concerted SEO efforts. Other times, it's simply that the
marketplace for a type of product has become more crowded. Regardless of the reasons, the only
way to recover from losing visibility in search rankings is to do some SEO of one's own. She wants
to do what she can to help AccountCo.
“You can disappear from search results for a variety of reasons,” says Sally. “First, we need data.
You may be surprised that the first data we need is to learn what your ideal customer actually
searches for online. It may not be ‘accounting software, for instance. I know a cousin of mine who
owns a dog grooming parlor was very surprised to find out what people search for online when
they look to have their dogs groomed. Maybe it's the same for people who need your specialized
software.”
Using some of the external data tools mentioned in Chapter 2, Sally researches the search
volume related to accounting software. She finds relatively low volumes of searches for “service
the
company accounting software.” However, she knows that search volume is just the beginning of
story. There is much more data that a company can use to find out why they are or are not appear-
ing in search results, what their ideal consumers search for, and how well traffic from searches is
converting to sales.
search engine results Sally uses another tool, specifically designed to analyze search rankings. She finds that
pages (SERPs) AccountCo indeed does not show up on the first page of search engine results pages (SERPs) when
The results that appear on consumers search for “accounting software.” Trying other search terms, such as “accounting soft-
screen when a consumer ware for auto repair shops,” and “accounting software for dog groomers,” however, she finds good
searches using a search
engine.
news! When prospective customers search on those terms, AccountCo does come up on the first
page. Even better news emerges from the data when Sally uses this specialized data tool. The tool
compares many elements of AccountCo's website to their competitors. It looks at how many web-
sites have links to AccountCo, measuring AccountCo’s popularity. It looks at how often AccountCo
comes up when consumers conduct any online search. It also shows data on how often AccountCos
competitors show up in search results.
The tool doesn't stop there when it comes to providing valuable data. It looks at the overall
technical quality of the AccountCo website across several metrics as well.
Sally switches tools, this time looking at the data on how many customers are finding
AccountCo in search results and buying software. Looking at Google Search Console, a free tool
specifically for examining a website's search engine positioning, Sally finds that consumers tend to
find AccountCo when they are looking for software related to their specific companies. She sees
many visits to the AccountCo site that started when someone searched for accounting software for
a hair salon, interior design company, and so on. She logs dozens of visits to the site based on these
very specific searches.
Heading over to yet another tool, Google Analytics, which we talked about in the chapter on
analyzing internal data, Sally finds more data:
¢ It turns out that 35% of visitors to the website first found the website via a web search.
« Of this segment of visitors, a healthy 20% became customers.
¢ The remaining 80% of this segment spends 4.5 minutes on the site, which is a full minute
more than visitors who originated from other channels than search. This indicates that search-
acquired visitors are highly engaged with the site content.
AccountCo is actually visible in search results. It's simply that the searches consumers conduct
are not the ones June anticipated, but much more specific ones. In addition, consumers who arrive
at the AccountCo website after conducting these specific searches are very interested in the prod-
ucts.
Looking at the search data, Sally learns the full story. AccountCo is a niche business, so they
win by appearing in specialized web searches, not general ones for basic, non-specialized software.
This is useful information for June.
“I have some great news,” Sally tells June in their next meeting. “You are showing up on the first
page of search results. It's just that the searches in which you show up are very specific. Consumers
don't really search for ‘accounting software’ to find you. They search for accounting software that's
made for their industries, like therapists or car repair shops. In those types of searches, you often
show up number one. More importantly, those consumers who find you this way—they are eager
to buy.”
“I guess that's great news,” says June. “But what do we do with this information? Is there a way
to be even more visible to these engaged buyers in search? And is there any point in trying to show
up in searches for ‘accounting software’ nonetheless?”
“In answer to your first question, there is a lot companies can do to increase their search visi-
bility. We can engage proven SEO strategies, such as content marketing, link-building, and more. It
will take time, but we can try to increase your search rankings. Every month, we'll examine the data
closely, adjusting our strategy based on what's working. Well continuously monitor your rankings
on and traffic from different keywords, your volume of inbound links, the quality of those links,
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how often you appear when consumers search online—all of this data will inform our monthly
strategy.”
‘As far as trying to rank for a broader search term such as ‘accounting software, the answer
is: it depends. What are your key performance indicators? Data only tells us what's happening. It
doesn't tell us whether that is good or bad. If you want a lot of conversions, it’s not worth making a
major effort to rank on such a generic term. It takes a lot of time, and people searching so generally
often are not ready to make a purchase. On the other hand, if your KP] is traffic or awareness, then
it might be worth it. You would get higher traffic if you appeared on popular search terms. Youd
appear in more search results as well. This would not increase your conversion rate. In fact, it would
reduce it, because youd introduce a lot of non-converting traffic. It comes down to your priorities.
Data cant tell you what your priorities should be. It can only tell you if you're meeting them—and
how to do better at meeting them.”
“That makes perfect sense!” says June. “It's better to invest in reaching customers who need
our product. Our KPI is sales. Let's focus on using search and other channels to reach buyers, not
browsers.”
With KPIs to guide her use of data, Sally uses search data to target June's most likely cus-
tomers. Within six months, traffic has increased by 27%. Sales are up by 60%. It looks like search
data, paired with AccountCos KPIs, has been beneficial.
4.3 Core Types of Search Data

There are several data points on which marketers rely to both understand the return on investment
(ROI) of their search marketing and translate search data into actionable data for their entire mar-
keting programs. In this section, we'll look at these foundational data points.
Average Position
Search engine results are customized to the searcher. You and your friends typically will get differ-
ent search results than your parents, neighbors, or professor. Search engines aim to provide users
with the most relevant content that meets their needs. They will thus show results customized to
a user's location, their history of searches and websites visited, and even sites endorsed by their
friends.
This makes it challenging for marketers to obtain data on where their websites are ranking
when users search. A site may appear at the number one spot when it is highly relevant to one
user's interests, while appearing lower down in results when the site is less relevant. For organic
search and some paid search platforms, marketers can look at the average position a page or ad
holds in search engine results. Note that this data will not be available from Google Ads after the
fall of 2021: however, it will be available for organic search and remain a critical datapoint.
AEE RENEE MARBLES

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Avg. position
in Search
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Acquisition Keywords
Whenever a consumer conducts a web search, they enter a keyword and then see a list of search
engine results. They then decide on which results to click, based on which seems most aligned with
the keywords they searched. Every website visit that started with a web search can be traced back
to the original keyword the user typed. From a website owner's perspective, acquisition keywords
are those search terms that drove website traffic. The user typed in a keyword, saw your website
among the results for that keyword, and clicked on the results to visit your site. That keyword a
user typed in to find your site is an acquisition keyword: It acquired that website visit for your
brand.
Sorting acquisition keywords by the volume of traffic each attracted to the site is another way
to determine the popularity of keywords. Importantly, it also tells you what keywords your poten-
tial customers find most relevant when describing your type of product or service.
Acquisition keywords also tell us what search results align most closely with what keywords.
This can validate specific metadata that appears in search results, such as page titles and descrip-
tions. Let's go back to AccountCo. They recently published a blog post, “10 Ways to Make Bill-Paying
Easier.” The page title is simply the name of the post, and the page's description is “Learn how to
make bill-paying faster, more accurate, and more efficient.” The post's author, senior accountant
Kathy Cho, thinks it's catchy. When a user searches for “make bill-paying easier,” Cathy's post shows
up in search results at the top, looking like the following:
10 Ways to Make Bill Paying Easier
https:///www.accountco.co/easybillpaying
Learn how to make bill-paying faster, more accurate, and more efficient.
It seems web users agree with Cathy that this looks interesting. The number one acquisition
keyword for traffic to this post is “make bill paying easy.” Looking at acquisition keywords alongside
how a page appears in search assesses whether the metadata influencing a page's search listing is
attractive to users of specific keywords. This is critical in designing effective metadata, a key part of
technical SEO.
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Search Visibility/Search Impressions

In addition to driving traffic to a website, appearing in search results is often in itself a benefit to
companies. Appearing in a search result organically increases brand awareness because the site list-
ing itself is seen, even if no clicks result immediately. In addition, ranking high organically grows
credibility, prevents search positions from being occupied by competitors, and increases the likeli-
hood of later clicks.
Different search tools offer different metrics of how often a webpage appears in search results.
Google's Search Console, a free search tool, measures impressions: the aggregate number of times
a webpage has appeared in any position in SERPs. The tool further provides impressions for each
keyword for which a site has appeared. Impressions mean simply that a webpage appeared. In
some instance, it does not necessarily mean that a searcher saw the result; for example, a website
may have appeared lower down than the searcher chose to scroll, yet count toward aggregate
impressions, even though it was never viewed. Other search tools provide other measures of a
site's visibility in search. Many proprietary metrics weigh average position into the overall “visibility
score’ of a site. In other words, if a site appears both often and toward the top of search results, it
will have a higher visibility score than a site that appears as often, but lower in results. Many mar-
keters believe that these weighted visibility scores, which factor position into the metric, are more
accurate than raw impression counts. Hence, many companies whose KPIs include search engine
marketing results use subscription tools to gain finer-detailed measurements of their search suc-
cess.
Inbound Links
Most SEO tools provide a list of a website's inbound links—that is the links on other sites that point inbound links
to the website in which you are interested. This data is extremely valuable to marketers. When we
The links on other sites
look at inbound links for our own websites, we can identify the following: that point to the website in —
which you are interested.
¢ Where on the web our brand is being discussed
+ What organizations and other brands wish to connect with us
¢ What mentions our brand has received in the media
« How extensive our reach is on the web
In the inbound link reports generated by most SEO tools, we can see the following:
« The aggregate number of inbound links to a website
¢ The domains linking to a website
- Links to the specific pages that contain a link back to a website
+ The relative quality and reputation of those websites that are linking to the given website
WHAT ARE
BACKLINKS
Beginner's Guide
This data gives marketers important information on competitive positioning, messaging reach,
and the media landscape in which they must operate. All of this data shows us information that
can inform decisions on partnerships, distribution channels, content marketing, public relations,
and competitive analysis. The inbound link analysis is valuable across the 4Ps. Some examples of
uses of inbound link data are discussed in Section 5.
FIGURE 4.2 Information Available from an Inbound Link Analysis
What organizations
Where on the web the
and other brands wish
brand is discussed
to connect
Identifiedin
Inbound
Links
Mentions of
Reach on the web
brand in the media
Marketers are well-advised to do manual data analysis on inbound link reports. Many tools
present inbound links as a spreadsheet, with little analysis provided. Top linking domains are pro-
vided; however, industries for these domains, authorship, and other relevant data are up to the
marketer. This is because such analysis cannot currently be automated. Sorting such an inbound
link spreadsheet by URL can provide a picture of what domains provided recent links, which are
more dated and which represent substantial content about a brand versus which are incidental.
Manual analysis of inbound linking data allows marketers to count links from top industry con-
tributors, identify patterns of press coverage, and map linking domains by topic.
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FIGURE 4.3 Data that Makes Up an Inbound Link Reports
Aggregate number of
The domains linking to
inbound links to a
website
a website
Inbound
Link Reports
Links to the specific
Relative quality and
pages that contain a
reputation of websites
link back to a website
Technical SEO Reports

Technical SEO reports describe technical, often code-level issues with site quality. Though these
reports are of most use to web developers, it's often the marketer's responsibility to provide these
reports to technical teams. Thus, it's important to understand them.
Technical reports show a wide range of data on defects within a website that impact that site's
quality, and thus their search engine rankings. Search engines want their users to have the best
possible experience, so sites that provide a poor experience due to technical issues are often penal-
ized by ranking lower in search engine results. Technical issues flagged in SEO data include the
following:
¢ Broken links. A user clicks on a link, only to find the page has been deleted or moved. metadata
- Missing metadata. Metadata includes information on the content of each page, including a In web marketing,
information on the content
clear title and a short description, called a meta description. It is used to show searchers what
of each page, including a
a page is about in search results. The search results you see all rely on page metadata for the clear title and a short
headline and the description below (see Figure 4.4). If metadata is missing, search engines have description.
to guess what descriptions to show their users.
site speed
Poor URL structure. When web addresses are needlessly complicated, that can flag overall
The speed at which a
structural issues with a site. A needlessly complicated URL (web address) would be www.web-
website loads in users’
site.com/pagel235/pages/pagegroup1234567/pagesubgroup1234567890/1234/789&% instead of browsers and responds to
something simpler, such as wwwwebsite.com/pagel. SEO technical reports will not only flag user input.
these long URLs, but also explain what issues they present.
Pages that load slowly or “get stuck” when they load, have the same text as other pages, and
other examples of poor site quality that might annoy or confuse users. Site speed, that is, the
speed at which a website loads in users’ browsers and responds to user input, is essential to
high search rankings. It’s also key to a good user experience, so savvy companies know that
having a speedy site is good for their brand.
FIGURE 4.4 Technical SEO Analysis Can Uncover Issues
Pages Technical
: Missing
Loading
Slowly
eer
Flagged in
Metadata
SEO Data
Poor URL
Structure
These technical SEO reports provide marketers with indicators of the overall technical quality
of their websites. In an increasingly trust-driven online world, sites that are built with attention
to detail are more trusted by consumers. Search engines rank high-quality sites higher than those
that exhibit quality issues such as many broken links. Knowing the quality level of their site can
help marketers understand when it's time to make site improvements.
4.4 Strategic Paid Search Data

In an increasingly competitive online landscape, brands seek to spend money on advertising that
results in good sales volume. When investing in paid search ads, monitoring campaigns continu-
ously is essential to good ROI. In this section, we will explore the types of data that can be obtained
from paid search that inform strategic advertising and communications.
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Explore what the work

is searching
Search Volume
The search volume report estimates the volume of searches related to a specific search term. It can
be analyzed worldwide or by a specific region. For instance, we saw in the AccountCo example that
estimating search volume helped the organization determine the organic keywords for which they
should optimize. In paid search, understanding search volume is often even more important. We
know that search volume estimates tell us how popular a search term is with web users. When we
create paid search ads, that popularity has a direct impact on the amount we will pay for those
ads. In general, popular terms cost more per click than those that are less popular within an indus-
try. This cost can vary by other factors. Search terms that have modest popularity but account for
many conversions can have high costs per click, while those that are popular without converting
well often bear lower per-click costs. In general, however, the more consumers are searching for a
term, the more brands need to pay for their ads to appear in related search results. This payment is
reflected in another metric, cost per click.
Estimated and Actual Cost per Click

When a consumer clicks on a search ad, the brand placing the ad pays a specific amount for that
cost per click (CPC)
click. That amount is the cost per click (CPC). When search marketers plan PPC campaigns, they
The cost of a click in paid
can obtain data from Google Ads and other search advertising platforms, such as Bing, on their marketing activities, such
estimated CPC. This is a range, often of several dollars. Let’s go back to the example of AccountCo. as advertising.
June decides to place an ad on search engines for “service business accounting software.” This will
supplement the traffic the brand attracts through organic efforts. She finds an estimated CPC of
$4-$7.80 for that term. When using Google Ads’ Keyword Planner tool, a tool that allows marketers
to estimate data for PPC, this range is presented at the Top of Page Bid (low) and Top of Page Bid
(high). This is the minimum and maximum (low and high) amount that a brand may expect to pay
to appear at the top of the first page of search engine results.
The amount varies because costs vary based on Quality Score (QS), a proprietary algorithm for Quality Score (QS)
both Google and Bing ads. We'll explore the QS in greater detail in this section. In brief, it's a metric A proprietary algorithm for
that measures the relevance of an ad campaign's entire creative, from the keywords to the landing measuring the quality of
both Google and Bing ads.
page, to users’ searches.
The higher the QS, the more relevant an ad is to searchers’ needs. The CPC will thus be lower,
cost per acquisition
because the ad provides a satisfactory experience to consumers."! As a result, brands only know
The cost associated with
acquiring a new
their actual CPC once they run an ad. When the ad is running, they will get daily updated data on
prospective customer. the actual amount they are paying per click. This is the ads’ actual CPC. Each ad has its own actual
CPC: in addition, actual CPC can be calculated on the campaign and keyword levels. With this data,
they can better budget for ads, as well as better calculate their cost per acquisition, or the cost asso-
ciated with acquiring a new prospective customer. When actual CPCs are higher than expected, the
brand can also work on optimizing their campaigns for a better QS. That will help them manage
actual CPC for maximum advertising ROI.
Cost per Mille (CPM)

Sometimes, the goal of advertising is visibility, rather than clicks. In other words, brands may aim
cost per mille
to have as many consumers as possible see their ad, even without prompting a website visit. In such
Cost per 1,000 views of an
ad.
cases, brands may opt to purchase ads based on views rather than clicks. View-based advertising is
priced on a cost per mille basis. Mille is Latin for 1,000; cost per mille is the amount a brand pays
per 1,000 times an ad is shown to consumers. It can be confusing that PPC advertising, whose name
implies a goal of getting clicks, has the option of paying for views without clicks. However, for
brands, placing ads in this way makes sense.
PPC portals such as Google Ads have evolved beyond their original function as search advertis-
ing platforms. They now offer a range of advertising options, including display ads, the traditional
online ads with images or video that appear on websites. CPM is a traditional pricing model for dis-
play advertising; display ads are also now often priced per click. The reality is that both PPC and
display advertising have converged in the past decade. They can be priced the same, with similar
campaign structures and metrics. The terminology is still catching up with these changes, hence
the legacy term, PPC.
How does CPM work for advertisers? Let's take a look at AccountCo. They have decided to
run a display and search campaign designed to build awareness. The display component features a
range of customers’ photos with testimonials. While clicks are important, visibility is the key. They
pay for viewable CPMs—that is, per 1,000 views that can be verified as views from real humans
instead of bot traffic Within the Google Ads portal, they can even measure related metrics, such
as the percentage of their ads that ultimately were viewable. When planning a campaign, the pro-
jected CPM tells them how much they should budget for an ad; once the ad is running, they will get
actual metrics on the CPM they pay. This data will help them measure how much they are paying
for the level of visibility provided by their ad being seen 1,000 times by consumers. Note that CPM
measures views, not the number of consumers reached. If a single consumer sees an ad 100 times,
all 100 times count as part of the thousand units of views measured by CPM.
Quality Score
Earlier in this section, we learned about the impact of Quality Score on CPC. Having a high QS
impacts the price of advertising. More importantly, high QS ads typically convert at higher rates.
The QS measures, as we learned, the relevance of an ad to searchers’ needs. This, in turn, is a rating
of an ad's quality.
The QS takes into account each step in the ad response process for consumers. When a con-
sumer searches in a search engine, they input a keyword. This triggers the ad, which the consumer
sees. If they find the text of the ad appealing, they click on the ad. The click takes them toa landing
page that the brand has created, where they may convert (take action),” browse the site, or leave if
the landing page is irrelevant to their original search.
The QS measures this entire experience from the point of view of a potential consumer. It fac-
tors in how closely the keyword on which the advertiser is bidding resembles the consumers’ own
term. It assesses how well the ad text aligns with the consumers’ terminology, too. Finally, it looks at
how well the landing page includes relevant keywords. For example, let's say that AccountCo places
an ad that is triggered whenever a consumer searches for “service business accounting software.”
The ad's text includes the words “Quality Software for Your Service Business.” When consumers
click on the ad, they go to a landing page with the same words in the headline, along with clear
text about the product's uses in running a service business. Their QS for this ad is high. In addi-
tion to being triggered whenever consumers search for “service business accounting software,” they
decide the exact same ad should appear when they search for “accountants near me,” “service busi-
ness Management,” and “business tips.” The ad and landing page are the same; they address only
service business accounting. Thus, the ads are much less relevant to the other keywords. They dont
address the topic on which the consumer searched, instead offering them content that may not at
all answer their needs. The QS for the ad goes down because it's now tied to irrelevant keywords.
Avg. CPC Quality Score
Closely monitoring QS is essential to running a successful PPC campaign. When it's high, mar-
keters can be confident that their ad reaches the right searchers. When it is low, they need to closely
con-
examine all the factors measured by QS—keywords, ads, and landing pages—to assess where
tent should be more relevant. With a high QS, brands pay less for advertising while obtaining
generally better sales results.
Visibility and Competitive Metrics

Search ads vary in where they may appear in a SERP. A given ad may appear at the number one
absolute top
impression share spot in some searches that are highly relevant to its keyword(s), while appearing lower with less-
relevant terms. For currently running ads, the prominence metrics are absolute top impression
Percentage of times an ad
was shown at the absolute share and top impression share. Absolute top impression share measures the percentage of times
top of search results, an ad was shown at the absolute top of search results, before any organic search content, while top
before any organic search impression share measures the percentage of times an ad was positioned before any organic search
content.
results, even if it was lower than some other ads.
top impression share
The percentage of times
an ad was positioned Competition
before any organic search
results, even if it was lower
than some other ads. Weve learned about the data that a brand must consider independently when planning a search
campaign. Now, let's take a look at one other important data point: competition. Most search ads
competition compete with others triggered by the same keywords; seldom is a keyword targeted by only one
In PPG, an estimate of brand. Competitive considerations are so critical in planning search marketing efforts that PPC
how many other brands platforms offer a specific metric called competition. Competition is measured as a qualitative
are bidding on a keyword,
range, from low to high. It's an estimate of how many other brands are bidding on a keyword as
as well as the amount they
are bidding per click. well as the amount they are bidding per click. The more brands bidding on a term at higher CPCs,
the higher the competition rating on the low-high scale.
Impressions and Impression Share
Even for ads that are paid on a per-click basis, it's important to know the number of impressions,
or times the ad was shown to searchers. Search marketers can obtain that data by looking for the
impressions metric. For instance, if an ad was shown 5,000 times in search results, it is said to have
had 5,000 impressions. This metric can help marketers understand how many consumers may have
seen their message when they searched online.
When we measure impressions, it can be challenging to know whether a given number of
impressions is satisfactory. We know that this ad, triggered whenever anyone searched for a special
high-powered microscope, has been seen many times—however, are other ads on the same topic
being seen even more? We can find the answer with the impression share metric. Impression shares
measure the percentage of all search impressions on a given keyword that were won by a specific
ad. In this case, we see the ad has an impression share of X%. This means that X% of all the con-
sumers who searched for this special high-powered microscope saw the ad.
When impression share is high, that means that the brand is spending enough on advertising
to gain high visibility. It also shows that their QS is high enough that search engines are showing
their ads often within the brand's fixed budget. When impression shares are low, it means that the
brand is not spending enough to appear in all searches; they should either increase their budget or
their QS in order to maximize the budget they have.
Cost per Conversion, per Lead, and per Sale

It's important for brands to know what they're spending on advertising every time they make a
sale, engage with a lead, or get a sign-up for their email list. This data is tracked using the cost per
conversion, cost per lead, and cost per sale metrics.*!
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- As the name implies, cost per conversion expresses the total cost associated with a conversion.
A conversion can be, as we learned earlier in this book, any action that a brand wishes their
consumers to take.
* Cost per lead measures the total cost for signing up a lead, defined as a consumer who has con-
tacted the brand in a way that indicates they may be interested in becoming a customer, but
who has not become a customer yet.
+ Cost per sale is the total advertising cost invested to get a sale, on average.
It's important to remember that cost per conversion, cost per lead, and cost per sale are not the
amount spent on the single click that took a conversion, lead, or customer to the website. Instead,
they represent the total amount spent on PPC, divided by the number of conversions, leads, or
sales."! For instance, let's say our colleagues at AccountCo spent $10,000 last month on PPC ads.
Each click cost them $1.29, but for this calculation, we aren't focused on that CPC. That is because
AccountCo paid for all the clicks generated by the ad campaign, not just those that resulted in sales.
What we care about is that total: $10,000.
From that $10,000 ad spend, the firm generated
* 1,000 conversions,
* 800 leads, and
¢ 500 sales.
That makes their cost per conversion $10:
$10, 000 ad campaign spend/1, 000 conversions from the ad campaign = $10 per conversion
Their cost per lead is $12.50:
$10, 000 ad campaign spend/800 leads from the ad campaign = $12.50 per lead
Finally, their cost per sale is $20:
$10, 000 ad campaign spend/500 sales = $20 per sale
Knowing these metrics helps brands determine how much they should be spending on PPC to
deliver a specific type of result. It can also help brands understand whether their PPC investment
is worthwhile, comparing it to the costs of conversions, leads, and sales on other channels.
4.5 Using Search Data to Optimize

Search Marketing
Clearly, one chief use of search data is in optimizing outcomes for search engine marketing. Search
marketing, both organic and paid, is highly dependent on data. What keywords garner the most
clicks, what paid search ads drive the most conversion, and how a site ranks against its competitors
'
in SERPs are all data points. These data points are critical in helping marketers make decisions
overall
on how to allocate search marketing budgets, focus search marketing activities, and shape
to improve
search marketing strategy. In this section, welll learn more about how to use search data
all types of search marketing campaign s.
Competitive Analysis and Benchmarking

One of the first questions companies ask when starting an SEO or PPC campaign is: “How are our
competitors doing?” Competition is always important. When it comes to search, it is the “name of
the game.” After all, if your company ranks an average of number 4 in organic (non-advertisement)
search results, that means that other organizations are ranking numbers one, two, and three. That,
by definition, is competition!
Competitive analysis is the process of gathering data on a competitor's or group of competitors’
search positioning. It can involve gathering data on the following metrics:
- Aspecific competitor or group of competitors’ average rankings on specific desirable keywords
+ What sites or organizations outrank one’s own site for a specific keyword or set of keywords
- Particular factors that influence competitors’ search rankings, such as the number of inbound
links to their website
« The domains linking to a competitors’ sites, especially those with high domain authority
Armed with this data, marketers can target specific competitors, aiming to supplant them in
search rankings. For example, let's say you run a local sports-themed restaurant, Marcy's Baseball
Burgers. You currently rank an average of number 5 in search results for “sports restaurants near
me.” Competitive data tells you that a single chain, Jim's Sports Grille, holds the numbers one, two,
and four spots, with an article from the local newspaper, rating local sports spots, at number three.
You determine that it’s unlikely such a respected paper's general-information article will be easy to
move from the number three spot. Instead, you decide to take on Jim's Sports Grille. Competitive
data tells you that Jim's high rankings are due largely to their excellent site quality, with effective
metadata on each page. They also have 130,000 inbound links, while you have only 50,000. With
this data, you now have a fairly good idea of how to beat Jim's in search rankings. You embark on
a process of link-building—attempting to gain more links back to your site. The data has not only
told you who outranks your site in the SERPs, but also told you how they achieved it. You decide
the simplest action is to copy what your competition did to achieve their rankings. Within a few
months, your site now ranks number one for your primary keyword, “sports restaurants near me.”
Competitive analysis also applies to paid search. PPC competitive analysis tools abound. They
provide the following data to marketers:
The keywords on which their competition is bidding
The names of other competitors that are bidding on a set of keywords
A competitor's annual and monthly spending on search ads
A competitor's monthly spending on specific search terms
The ads that competitors are using in conjunction with each keyword
The amount of time a company has been utilizing paid search
The average clickthrough rates (CTRs), which are the percentage of people who saw an ad and
clicked on it, cost-per-click, and position of each ad and keyword used by a competitor
Comprehensive reports on competitors’ PPC activity can provide search marketers with a
roadmap to succeeding in paid search. This data can help them determine PPC budgets, select key-
words, create ads, and optimize offers. Let's take a closer look.
Inbound Link Analysis

One of the key ranking factors in organic SEO is the volume and credibility of links to a website. In
the past, this has led to the proliferation of “link farms’—websites that sell links to any purchaser.
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Search engines continually refine their algorithms to identify questionable efforts to gain inbound
links, preventing websites that purchase such links from ranking at all in some circumstanc
es.
Legitimate inbound links can be of substantial benefit to a website's ranking. They are an indi-
cator of the site's popularity, which in turn increases the likelihood that consumers new to a site
will find it appealing. Inbound links from credible sites, such as EDU domains, are especially pow-
erful, as they indicate endorsement by credible entities.
Because of the importance of inbound links, many marketers focus greatly on inbound link
data. One action step derived from inbound link reports is a roadmap for link-building, or a con-
certed effort to win links to one’s site, also called backlinks. Marketers may examine inbound link
data to identify sites that already link to their own sites, and ask those site owners or owners of
similar sites to provide additional links.
Inbound link analysis should focus on identifying types of inbound links:
Are backlinks permanent, such as a recommendation from a product reviewer? Or are they
temporary, such as online calendar listings mentioning an upcoming event?
- Are they in the context of positive or negative sentiment?
¢ Do organizations provide most of the links, or individuals?
¢ When did most of the links originate? Have they accumulated steadily over time, or were they
the outcome of a time-limited effort, such as a public relations campaign?
What types of content contain the backlinks? Are they embedded in blog posts, resource lists,
or influencer materials?
Examining backlink data from a strategic perspective points the way to new opportunities.
For instance, if a marketer finds that most of their site's existing backlinks come from individuals,
they can make one of two strategic decisions with that data. They might increase outreach to more
influencers, given the organization's prior success with winning backlinks from individual content
producers. Conversely, they may decide that the current success with backlinks from influencers is
not only sufficient but indicates that more traction needs to be gained elsewhere. They may thus
decide that the large number of backlinks from individuals means that they should henceforth
focus on building link relationships with larger organizations. As with most other kinds of market-
ing data that we will discuss in this book, there is no single right or wrong “answer” when it comes
to viewing data. Data can only provide factual information about programs status or external situ-
ations. Skilled interpretation is necessary to make the data actionable. Even in the hands of skilled
practitioners, data is open to multiple interpretations. Often, organizational goals, industry factors,
and available resources will dictate the best course of action indicated by directional or quantita-
tive marketing data.
Keyword Analysis
First off, let's remember that keywords are not single words. In marketing, a keyword is a search
term that a user types into a search engine. Sometimes it's one single word, such as “shoes.” How-
ever, it's much more likely to be a short phrase, such as “men's size 11 shoes.” Few consumers today
conduct their searches by typing or saying a single word. Thus, when we speak of keywords, it's
use to
important to recall that we're really talking about phrases of “key words” that consumers
find things.
KEYWORD
RANKING
Short- and Long-Tail Distribution
In the world of keyword data, we often talk about two distinct types of keywords: short tail and
short tail
long tail. Think back to Chapter 3 on analyzing external data. Here, we learned that Google and
Refers to keywords that
other search engines track the popularity of search terms. Some keywords are searched often. Oth-
are popular and general.
ers, less so.
long tail You can compile data on any set of related search terms—keywords closely related on a single
Refers to keywords that topic—and find a common pattern. Some broad, nonspecific terms are searched a lot. Many very
are specialized, less
specific terms receive less traffic. When we look at a graph of most sets of search terms, it often
popular, and more
specific. looks like a long-tail distribution. A long-tail distribution, in business terms, is any distribution of
instances in which a small number of items account for a large quantity of volume, and many more
instances each account for many small quantities of volume. For instance, think of a diner that has
a few popular dishes. The diner might offer famous hot dogs, pies, and waffles, as well as a full menu
of 100 other foods, from pancakes to pizza. However, their most popular items are the waffles, hot
dogs, and pies. Those items account for more than 35% of food ordered at the diner. All 100 other
foods account for 65% of foods served. Some dishes, such as baked beans, are only ordered once or
twice a day, while in that same space of time, more than fifty orders of waffles are served and eighty
hot dogs. Those few popular items are the short tail of the distribution. They are a few items that
account for a high proportion of all activity.
What about the 100 other food items, such as the baked beans that are only ordered a couple
of times per day? Are they worthwhile? Absolutely! Remember, although individually they are less
popular, together, if you add up orders for all 100 foods, they make up 65% of sales. Each sale of
less-popular item may be small, but in aggregate, they still account for the bulk of sales. How is
this possible? Because consumers have niche tastes, selling a lot of specialty items, though each
item may not sell often, attracts the widest range of consumers. These niche items and their associ-
ated activity make up the long tail of the distribution. They are a wide variety of items, accounting
together for a lot of activity, even if individually they only produce modest activity.
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FIGURE 4.5 Keyword Data Trends

Keyword data tends to follow a consistent pattern that can be mapped as a curve, with a small number of popular
terms making up the short tail and a large number of specialized terms comprising the long tail of the curve.
When we look at keyword data, many marketers look for the keywords on the long tail of the
distribution. That is, they look for keywords with relatively lower volume, but that clearly show
consumer interest. This is because the more specific a search, the more likely that it’s being con-
ducted by a consumer who really wants to take action now. For example, if you ask your phone
to search for pages related to “laptop,” you probably are not ready to buy a computer right away.
After all, you didn't search for a specific make or model. You didn't enter a price. You just looked for
“laptop,” possibly to start researching what's available. Once you have a particular device in mind,
your search will change as you look for the best deal. You might search for “MacBooks on sale,” for
instance, or even “refurbished MacBook under $800.” These are very specific searches, showing that
you know what you want. This means you probably are ready to buy.
FIGURE 4.6 Short-Tail and Long-Tail Distributions \

In this example, we see that there are many searches for “pizza,” and relatively fewer searches for more specific
terms, such as “vegan pepperoni pizza.”
short tail long tail
pizza Gluten-free pizza in Houston

Vegan pepperoni pizza Sausage and peppers pizza, no sauce
Given the many options available, there are far fewer searches for any specific computer than
there are searches just for the word “laptop.” After all, your friend who’ also in the market for a lap-
top may not want, and therefore will not search for, a refurbished model. Another friend may only
want a Windows device, and won't search for MacBooks when they are ready to buy. So, although
all three of you may have at one point, early in the buying process, searched for a “laptop,” now that
you are all ready to buy, each of you is searching for that one special item you want. This is how
long-tail search is defined: Consumers who are ready to take action often search for very specific
things. And, because consumer needs are so diverse, these specific searches are often very diverse,
resulting in large numbers of keywords, each with relatively low volume. When looking at search
data, it's important to interpret search volume numbers with an understanding that high-volume
keywords are often used by consumers who are not ready to buy, while low-volume, complex key-
words are used by purchase-ready consumers.
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FIGURE 4.7 High and Low Value
Conversion by Keyword
Different keywords can have very different conversion rates. If sales volume across the beauty
industry is high for floral-scented soaps, many companies are probably selling similar soaps. Con-
sumers may be exposed to many ads for floral soaps, while lemon-scented soaps receive less mar-
keting attention. As a result, the actual conversion rates for marketing materials promoting lemon-
scented soaps may be much higher than the conversion rate for floral soaps, as consumers who
wish to purchase such soaps see far fewer ads, social media posts, or other marketing messages.
When they do see an ad for lemon-scented soap, these consumers click on it readily.
Because of variability in the conversion rates of consumers using different keywords, brands
should track the conversion rates not only of ads, but of the keywords used with those ads. For SEO,
marketers should also track conversions by both webpages and keywords that consumers used to
find webpages. Tracking keyword conversions can help brands understand the mindset of their
most attractive customer segments.
Let's say Our soap company uses a single ad for all searches related to soap, regardless of the
long-tail phrase. If they tracked conversions at the advertisement level, they would see, perhaps, a
reasonable conversion rate for the ad of 2%. However, if they explore deeper, they will find that con-
sumers exposed to the ad after searching for “lemon-scented soap” actually converted to buyers at a
rate of 10%. Encouragingly, consumers who searched for “minty soaps” converted even more: Fully
15% of consumers who saw the same ad after searching for this term made a purchase.
With this data, the company now has a much better understanding of the real needs of their
best consumers. Rather than selling at an average rate to all organic soap fans, the brand is actually
tremendously popular among consumers who favor niche scents. This data gives the company an '
opportunity to make even further headway among these niche consumers. They can create a sepa-
rate content campaign highlighting each of their special scents. PPC research shows that the closer
ad text resembles the keywords a consumer used in their search, the more likely the consumer is
to see the ad as relevant, and thus to click on the ad, believing they have found what they seek."
Similar principles apply to organic search content, such as blog posts, videos, and other creative.
Thus, if the company uses keyword conversion data well, they will start to segment their marketing
creative into separate campaigns based on the keywords that convert well for them. The creative
will thus be focused on specific product lines. Blog posts, for instance, can feature just the lemon
or mint product, so that interested consumers immediately see the connection to their search. This
will make them more likely to click.
Other Keyword Metrics
Conversions are just one metric useful to keyword analysis. Average sales per keyword are also crit-
ical to measure. Some keywords drive relatively little traffic, but the small number of visitors spend
more than the average shopper on a site. For instance, more people search online for “affordable
watches” than search for “Rolex for sale.” However, a single Rolex purchase is worth ten times the
revenue as the sale of an inexpensive watch. As with any other marketing effort, it’s thus critical
to connect keywords not just to traffic, but also to sales and revenue. Finally, keywords should be
measured according to the customer lifetime value (CLV) of consumers using each keyword. Again,
there may be large differences in the aggregate purchases made by consumers searching with one
keyword or another. A customer searching for “gourmet coffee gift” may make only a one-time pur-
chase. Even if it’s a large purchase, it may not lead to long-term revenue for a company. On the other
hand, a customer searching for a “gourmet coffee subscription service" clearly intends to spend reg-
ularly on coffee, and thus may have higher lifetime value to a company. Gathering data on the
ultimate outcomes of consumers who first come to a company website based on different keywords
can lead to better ads—ones that generate the highest possible revenue for a company, attract the
most enthusiastic customers, and create a more focused advertising effort.
Keyword data should thus be analyzed in conjunction with sales data, CRM data, and website
traffic numbers. This type of analysis rapidly becomes complex. PPC vendors, including Google
Ads and Bing Ads, provide useful dashboards within their advertising platforms that help connect
some of the data dots. For instance, the Google Ads platform integrates with Google Analytics to
show conversions by ad and keyword, as well as sales attributed to each keyword and ad click. Prop-
erly configured, Google Analytics data for an e-commerce company can also provide limited CLV
data, filterable by keywords used by each customer. In this way, companies can see the CLV for
each customer by keyword, or the aggregate CLV of customers using a related group of keywords.
However, if many conversions occur offline, for instance in stores, CLV becomes harder to track
using Google Analytics and ad platforms alone. For more complex consumer relationships, robust
cross-platform dashboards can help identify the complete customer relationship, including key-
words used by each consumer. Marketing automation platforms typically include keyword metrics,
including conversions and sales per keyword.
Often, companies add new long-tail keywords to their PPC campaigns regularly. The goal is
explicitly to generate data on what aspects of a company’s offerings appeal most to consumers:
which keywords generate the most traffic, conversions, and CLV. PPC managers add keywords
weekly or monthly, testing them for conversions and sales and using predictive models to deter-
mine prospective CLV from early purchases. They eliminate test keywords that don't perform well
and, using the conversion and sales data, create new campaigns around keywords that promise rev-
enue. This data-driven continuous optimization is a hallmark of effective PPC management. It can
also, however, provide a highly accurate, near real-time stream of keyword data that is more timely
and richer than organic keyword data alone.
Technical Analysis
In the section within this chapter on the different types of search data, we discovered that many
SEO tools provide data on the quality aspects of a site. While these reports are limited only to those
elements of site quality that impact search rankings, they are still a valuable insight into the over-
all quality of a site. For instance, SEO tool data often reveals that a website has several pages with
the same or nearly identical content. This can confuse users. It can reveal the absence of metadata,
107
or data about the contents of a webpage that search engines can crawl, identifying the topic
of a
site. When these issues are pervasive on a website, it's often evidence that asite is poorly structured
overall. Poorly structured sites are hard to navigate. Hard-to-navigate sites have lower conversions
than those with easy-to-follow navigation.
Thus, if technical data from an SEO tool reviews a high number of technical issues, marketers
can use this data in two ways:
1. Addressing the technical site issues identified in the audit
2. Analyzing the entire site for usability, conversion, and quality issues beyond those flagged by
SEO tools
What does technical SEO data mean in terms of action steps for marketers? It depends on what
the data tells us. A good rule is that a quality site should have technical issues equal to 5% or fewer
of the number of pages on the site. That means that if a site has 200 pages, on an average day, the
data should show fewer than ten technical issues. The issues do not need to be on ten separate
pages; often, a single page will show multiple quality issues. This formula is not meant to tell you
how many pages it's acceptable to have issues on; it's meant to be a guide to the number of issues
that are typical in proportion to site size. For instance, let’s say a site has 300 pages. According to the
site quality formula, a site of this size should have fifteen or fewer technical issues to be considered
good-quality.
Issues will occur as a site is updated, so on some days, the data will show fluctuating numbers
of site issues. However, the ideal is to remain at relatively few broken links, missing metadata, or
long URLs. Average sites will have issues equal to 5-10% of the number of pages.
Once marketers have a rough metric of site quality, they can instruct development teams to
address the quality issues flagged by the data. Reports from SEO tools provide a clear roadmap to
fixing common problems, often in the form of a spreadsheet showing each URL for a problem page,
and the exact error or errors found on the page. This makes technical SEO data easily actionable.
Marketers can simply provide the data to web developers, who can readily make needed corrections
based on the error data.
More complex is the question of what marketers should do if they suspect SEO data is an indi-
cator of greater quality issues with a site. The first step if this is the case is to use additional data.
4.6 Using Search Data for Marketing

Strategy
Search engine marketing doesnt exist in a vacuum. On the most basic level, companies seek to rank
well in search engines in order to drive traffic to their websites. Those websites contain content,
offers, products, and services. Search marketing exists to drive traffic to the rest of a company’s web
presence; thus, it exists within the framework of the entirety of a company’s marketing efforts.
When we talk about the position of search within a company’s overall marketing, that is just
the beginning. Just as search is a way to drive traffic to other marketing products, other marketing
con-
efforts exist, in part, to support search efforts. Blogging may focus on creating keyword-rich
YouTube
tent that gets high visibility in search engines. Videos may focus on popular topics, since
search engine.” Offline marketing may also play a role: Keywords that
is the world’s second-largest
focus to radio ads, print media, or direct mail campaigns.
have proven to drive conversions may give
across
In this section, we will learn about how search data is a critical input to marketing decisions
the marketing promotion mix.
FIGURE 4.8 Making Decisions Using Data
Knowing that the Decide what

data is telling the actions to take
story we think it is on those insights
Integrated Marketing Campaigns
When we talk about different marketing channels working together, marketers often use the term
integrated marketing campaigns. Integrated campaigns are cross-channel programs focused on a
specific target audience, message, or goal. In an integrated campaign, channels reinforce each other,
delivering toward a common goal, regardless of the medium.
integrated Because much of search data illuminates consumer intent, it's very useful as an input to
campaigns integrated campaigns. Data on keywords, inbound links, and other search concepts can help mar-
Cross-channel programs keters understand the customer journey, inform public relations and communications strategy,
focused on a specific expand influencer and social media campaigns, and build better inbound marketing programs
target audience, message,
or goal. In an integrated
campaign, channels
reinforce each other, Understanding and Mapping the Customer Journey
delivering toward a
common goal, regardless
of the medium. We've talked a lot about long-tail distribution. That's because it's important for many more market-
ing functions than PPC and SEO. Understanding the language used by buyers at different points
in their journeys is important to understand. Let's think about the example of how you may have
searched for “laptop” when you first started out researching computers for yourself. What websites
did you find when you made this general search? Possibly you found websites that compared dif-
ferent models of laptops, consumer publications, and company sites. Once you decided you wanted
a Mac, you started to look at Apple's site as well as the sites of Apple retailers. Finally, you decided
on a MacBook. Then, looking at prices, you found your budget matched a refurbished one. All of
these steps on the journey that led you to buy a refurbished MacBook are important for marketers
to understand. Each step involved touchpoints when you needed specific information to get to the
next step of your buyer's journey.
customer journey Although it’s most cost-effective to advertise using long-tail keywords, attracting consumers
mapping ready to buy in a competitive market, it's not always possible to focus all of your efforts at the final
Detailing the steps ina stage of the process. Instead, smart companies try to engage consumers from the moment they
customer’s activities start thinking of buying until the moment they have decided on a specific product and make a pur-
related to a brand, such as
learning about a brand and chase. To engage consumers at all these points, companies must first identify the steps a consumer
making a purchase. may take to reach a purchase decision. They may also look at what happens after a purchase is
made, to keep customers loyal. This is called customer journey mapping.
Analyzing search data is an important part of customer journey mapping. Remember, most
consumers start their buying journeys online, many through search. Thus, search is the first point
on many customer journey maps. Data from Google Search Console, Google Analytics, and PPC
management platforms can pinpoint the exact search term consumers used to find a company’s
website. They can tell us how many consumers originated from search ads, from organic search
results, and what actions these search-originated consumers took once they reached the site. For
109
instance, let's take a gym, Andy's Fitness. Looking at their Google Analytics, they find
that 37% of
their visitors originate from organic search—that is, from searching online for a keyword
and find-
ing Andy's Fitness in the actual search results or SERPs. Looking further at their conversion
data,
they find that 10% of the consumers who signed up for a trial membership found Andy's
Fitness
in organic results. Looking over at their search console data, they find that the following popular
search terms bring consumers to the site:
¢ Full-service gym, bringing 115 visits a month
* Gym with classes, bringing 65 visits a month
+ Gym with personal training, bringing 48 visits a month
This data helps them understand what consumers are looking for when they find the website.
From there, they can see that visitors who find the site from search results spend an average of
5.6 minutes on the site versus consumers who originate from all other sources, who spend only 3.2
minutes. The Andy's Fitness team sees that 78% of consumers who come to the site from a search
eventually look at one of the site's how-to training videos, and 67% read the gym's nutrition blog.
Looking at data on traffic patterns on the site, it appears that most consumers first look at the
homepage, then the videos, then the blog, and only then decide to sign up for that trial member-
ship. Armed with this data, the team can map out an online customer journey that looks like this:
Step 1: Search online for “full-service gym,” “gym with classes,” or “gym with personal training.”
Step 2: See Andy's Fitness in the search results and click to visit the site.
Step 3: Land on the homepage, where they see photos of the equipment, the Andy's Mission
Statement, and links to the how-to videos and nutrition blog.
Step 4: See the Andy's personal training team in action through the fitness videos.
Step 5: Learn more about the gym through the nutrition blog.
Step 6: Decide to check out a trial membership.
If Andy's Fitness is using a marketing automation platform, they can gather even more data,
associating specific consumers with their online behaviors. This way, they know that Sam Jones
searched on Thursday to find the website, read the blog, looked at two weights how-to videos,
signed up immediately for a trial, and then came to the gym the next day to check it out. As of this
writing, it’s not possible to tell the exact keyword that led a specific consumer to an organic search
result. However, with paid search, it is possible to pinpoint the exact keywords that consumers used
when they searched and if they then clicked on a paid ad that came up for that keyword. This
means that companies often run paid search ads because these ads allow them to know exactly
what keywords consumers use rather than relying on aggregate data. Knowing the differences in
behaviors between consumers who searched for “gym with classes” versus the behaviors of those
who searched for “full-service” gym allows much more defined customer journey mapping. Run-
ning paid search campaigns is currently the most effective way to gather data on exact keyword
usage, and this is critical data for many marketers.
Keyword, Inbound Linking, and Conversion Data for

Channel Planning
Search data is critical because search engine presence is often a company’s first step in attracting
consumer attention. It's not the only use for search data. Search data can help marketers plan
strategy, content, and key performance indicators (KPIs) for other marketing channels. This is true
whether or not search is integrated with all other channels (as it should be) as part of an integrated
influencer
campaign, or not. Search data can also inform standalone initiatives, such as short-term
attitudes, brand reach, and web visi-
campaigns, because it provides general insight into consumer
strategy planning
tor behavior. Let's take a closer look at how search data can inform independent
across marketing channels.
Seeing discussions of a brand across the web: This can be helpful in identifying influencers
who have already mentioned a brand. It can also identify influencer sentiment, when used in con-
junction with sentiment analysis—the analysis of text to see if its tone is positive, negative, or
neutral, With a list of mentions of your brand, everywhere on the web, you can quickly track down
those mentions and analyze them: are they reviews, articles, forum posts? Do they say positive or
negative things about your product? With an inbound link report, brands no longer have to won-
der what is being said about their company or product on the web. They can get a full list of pages
where their website is linked, and read what those sites say. The inbound link report cannot pro-
vide data on web mentions that do not contain a link to the brand's website. Other tools, including
Google Alerts and several proprietary platforms, provide such data.
Identifying organizations on the web that indicate an interest in a relationship: Once a
marketer analyzes inbound link data for sentiment, as shown above, they can identify brands,
influencers, and channels that are open to a relationship. For instance, let's say you make organic
soaps. You sell online and through a wholesale distributor who places your product in stores.
Through an inbound link report, you find that several sustainable living bloggers have mentioned
your brand with positive reviews. You can reach out to these bloggers and ask to collaborate with
them, place ads on their site, or otherwise leverage the bloggers’ readership to drive traffic to your
site. You also find several independent stores featuring your brand on their websites. Working with
your distributor or on your own, you can support sales in those stores by providing attractive dis-
plays, signage, or demos. Using inbound link reports has thus strengthened both your advertising
and your distribution channels, having a positive effect on both promotions and place.
Analyzing media mentions: Inbound link reports can also help find mentions in the media.
They are one of the best tools for looking at media impact in the long term. Because inbound link
reports can report back on many years’ data, they make it possible to map press coverage over
those years, seeing trends. It's easy to identify which publications most frequently cover a brand,
and assemble a “clip book” of press mentions. New media outlets providing recent coverage can be
found. Marketers can identify reporters who have picked up on brand-related stories, thereby build-
ing new press relationships. They can also identify press outlets that once provided coverage but
no longer do so. They can then reach out to those outlets to re-establish these mission-critical rela-
tionships.
Let's take the example of the soap company again. Through an inbound link report, they find
that an organic living magazine once mentioned their products three to five times a year: in holiday
gift guides, summer beauty specials, and in regular articles. They note that no new inbound links
have been created from that magazine back to the soap company site for eighteen months now.
Investigating the organic living magazine finds that the reporter responsible for 70% of those men-
tions has left. The team can now identify other reporters covering soaps, reach out to them, and
rebuild the relationship with the magazine. Without inbound link analysis, the relationship would
have been lost, leading potentially to declining sales.
Using search data for integrated marketing campaign strategy requires strong skills in inter-
preting relevant data. Knowing the connection between keyword conversion rates and consumer
intent, for instance, requires an understanding of search behaviors. Applying search data to both
search and non-search campaigns is made more effective when the data is paired with other data
from different data sources. For instance, traditional marketing metrics, such as focus group and
survey data, can make consumer search intent clearer than keyword data points alone. Think back
to the example of Andy's Gym. We learned that certain keywords were leading to high conversion
rates. Consumers looking for “full-service gyms,” for instance, found the Andy's Gym offering espe-
cially appealing. Keyword data can tell us this fact, but it cannot illuminate why certain keywords
resonate with consumers. That “why” can be found through focus groups, surveys, and other mech-
anisms. If Andy's Gym wants to know more about what is important to their consumers, both those
who use search and those originated via different channels, they can convene a focus group, asking
consumers directly. They may find that consumers search for “full-service gyms” because they want
personal trainers, for example, rather than other full-service features, such as towel service. Know-
ing this will help Andy’s further refine their service offerings, improve their messaging, and, in turn,
refine their search engine and other marketing efforts, both online and off. When using search data
to inform marketing efforts, the same rules apply as with any other data: It is more powerful when
used in conjunction with a wide range of other data. Examining a marketing problem with multi-
ple tools is typically the best way to get useful answers.
Content Marketing Strategy

Content marketing is the practice of engaging with customers using content, such as blog posts,
videos, ebooks, interactive games, and more. It's often a cornerstone of SEO, since typically, the
more relevant content a site offers online, the more frequently it appears in search engine results.
Content marketing is a creative field that greatly uses data to shape its overall strategy. Often, expe-
rienced marketers ask whether data is really useful for measuring or shaping creative marketing.
The answer is, increasingly, yes.
While writing, making fun videos, and creating games may seem the opposite of data analytics,
it’s often in creative fields that data can make the most difference. Data tells content marketers
what to create, based on consumer interest. It tells them how effective those creations are, based on
consumer responses in the form of clicks, shares, and conversions. It also tells us why consumers
want specific creative work, based on their search patterns. In short, data takes creative work and
makes it meaningful, by connecting the creative artists, writers, and videographers behind content
marketing with consumer interests. It provides feedback to creative teams on how well their work
is received. And, since content marketing is still marketing, it helps prove the value of this creative
endeavor to the rest of the business.
Because of the close relationship between content and search marketing, metrics used to mea-
sure or shape content endeavors is often search data. In this section, let's learn a bit more about
how search data informs content marketing.
FIGURE 4.9 Steps in Developing Content Marketing Strategy
Content
Marketing
Strategy
Inbound
Marketing
Marketing Keyword
Funnel Conversion
Optimization Analysis
Keyword Conversion Analysis

We learned in an earlier section that different keywords attract different consumers to a website.
These consumers can differ widely in their propensity to buy, their value to a company, and their
enthusiasm for its products. We saw that smart companies use keyword data to build effective
search engine marketing programs. We also learned that keyword data can be essential to deter-
mining an effective content marketing strategy, as it can indicate consumers interest in topics that
can be covered in a content marketing program. However, they don't need to stop with only their
search efforts.
Since keyword data is a close indicator of consumer interests, it's applicable to nearly any mar-
keting channel. It's especially effective in creating attractive content. Our company can craft video,
social media campaigns, and email marketing around these more-popular products.
Keyword conversion rate data helps companies map out what features are of most interest
to their consumers. Let's say you manufacture a laptop that is lightweight, holds its charge for a
long time, and is affordable. Your website promotes all of these features. However, you suspect that
some features play a larger role than others in consumers’ decision to purchase. Looking at key-
word conversion data, you see that 20% of consumers who came to your website after searching
for a “lightweight laptop” made a purchase. By contrast, only 8% of those who came to your website
after searching for “affordable laptops” bought. Searches for “long-lasting laptop charge’ and related
terms yielded a 5% conversion rate. Clearly, it appears that consumers seeking lightweight laptops
are more likely to buy your lightweight, long-battery-life, affordable laptop than those seeking any
of its other features. Although making product development decisions based solely on search data
is not advisable, as other data inputs such as focus groups are even more accurate, search data is a
valuable insight into consumer needs.
Search data is a key input into marketing strategy because it offers insights into consumer
needs, expressed at the moment they go online to find products and services. As such, it’s a vital
part of a marketer's data toolkit. Used in conjunction with other data sources, it allows a more
nuanced picture of consumers’ interests in inbound marketing topics, product features, and brand
perception. It’s vital for marketers outside of the specialized field of search marketing to under-
stand the sources and analysis of search data.
4.7 A Closer Look: Keywords and

Product Optimization
Annabelle Martinez had an idea while looking for a physical therapy appointment after 7:00 p.m.
There should be an app that helps night owls and early birds find services that keep the same hours
they do. Whether you are looking for a quick bite to eat at three in the morning or a hair appoint-
ment after eight at night, businesses may well exist that cater to your needs. Searching online can
certainly help, but an app that curates information on off-hours businesses would make life easier
for students, shift workers, and those who just get up early or stay up late.
In a few weeks, Flexly was born. Annabelle crowdfunded a modest amount to build her project
and dedicated her summer to building out the app, creating marketing, and signing up businesses.
Initial research with potential customers identified a very wide range of services that people wish
to use after hours. Some were obvious, like urgent care, restaurants, and gyms. Others, less so, such
as Spa services and office supplies. With limited funds, Annabelle knows she cannot list every type
of business at first: researching them, adding categories to the app, and targeting the buyers of all
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the different goods and services will be too time-consuming. This is especially the case if some
of
the needs are outliers with few interested consumers. Instead, Annabelle needs to focus
on the core
features that the most consumers will use: in this case, the most popular types of after-hours busi-
nesses. Learning from her friend who works at AccountCo, she knows that keyword data is the core
of SEO, and it also helps marketers glean insights into other programs.
“Maybe keyword data can also help shape my product strategy,’ thinks Annabelle. She sets up
a website for her app, from which people can download the app. In addition, once the beta version
of the app is launched, she closely monitors the keywords app store searchers use to find her app
as well.
Looking at the keyword conversion data, Annabelle finds a pattern: On the web, the searches
that convert are for services not typically open extended hours, such as “hardware store” or
“acupuncture services.” Many searches are for businesses that offer a service only, such as for
plumbers and electricians who come out on weekends.
In the app store, searches that convert are focused on the use of off-hours activities, such as
“app for night owls.” In terms of marketing, the app store keyword data is useful for broad mes-
saging: For instance, there are twice as many conversions from night-owl-focused searches as early
bird ones. However, the web SEO data proves the most valuable for product strategy. Since most of
the high-converting web search keywords focus on specific businesses, now Annabelle understands
the types of businesses her users most want to find via her app. In her limited time, she's able to add
more of those types of businesses to the app navigation. Rather than building an app that attempts
to be all things to all consumers, she learns that most users want to find common types of service
providers that are available nights, early mornings, and weekends. Knowing what features to add
to her product based on conversions helps focus product development on the highest ROI features.
As she adds more such offerings to her app, downloads grow by 60%. “Paying attention to what
features drive customers to convert made our app profitable sooner,” Annabelle says. “Using search
data allowed us to understand the features customers demand most and build a product that aligns
with market needs.”
4.8 Do the Math: The SEO Audit
The first step in any SEO initiative is typically an SEO audit. This audit sets a baseline for all key
aspects of the SEO program:
1. The most important long- and short-tail keywords a brand targets in its search strategy
2. Asite’s current average position and search visibility in SERPs for all target keywords
3. Competitors’ current average SERP positions and average visibility for the same target key-
words
4. Competitors’ current highest SERP positions and their associated keywords, even if they are
not targeted by one’s own brand
6 Technical issue data; if no technical issues are found, noting the fact that the site lacks out-
standing technical issues
6. Inbound link reports both for one’s own brand and all identified competitors
competi-
7. Keyword opportunities: low or moderately competitive keywords on which few or no
tors are ranking
available
8. Historical data on average positions for one's own and competing brands, if
These
An audit begins by identifying a brand's keywords, as well as the competitors to analyze.
and Hubspot
keywords and the domain URLs are input into an SEO data tool. MOZ, SEMRush,
the analysis, gathering
are among the most authoritative search data vendors. These tools conduct
the data points outlined above. The analysis can be instantaneous or take minutes or hours. The
tools crawl each specified URL as well as query search engines using proprietary tools to determine
search rankings. They also utilize web crawlers to determine inbound links. Once analysis is com-
plete, the tools provide data in the form of CSV files with raw ranking, inbound link, and visibility
data, as well as other data points. Most also provide some visualizations in PDF format.
While not a complex calculation challenge, SEO audits present a different data challenge: pre-
senting large amounts of data in a clear, actionable manner. In SEO, most of the “math’ is done for
marketers by analytics tools, often using proprietary data collection. As such, in SEO, “doing the
math’ is about taking a wide range of complex data points and translating them into visualizations
that make sense to users for an SEO audit to be usable for decision-making. Charting search visi-
bility makes the most sense, for instance, when presented in the context of historical performance
or competitive rankings. The first step in analyzing SEO numbers is to group data points that make
the most impact, summarizing them for easy reference. An initial page may chart search visibility
over time in comparison to two to three top competitors. A table typically presents search rankings
by keyword, with keywords in the left column followed by average search rankings obtained on the
right. The number of inbound links for each domain analyzed can be presented in a table. Analysts
must go through each data type and determine whether a table, line graph, pie chart, bar graph, or
other presentation will translate raw data into meaningful points. They then create visualizations,
presenting them to stakeholders along with recommendations.
A single audit yields millions of lines of data when presented as spreadsheets. The default data
visualizations provided by many tools often present oversimplification. In all cases, the goal in ana-
lyzing SEO audit data is to filter data into relevant points.
4.9 Case Study: Winning the Local

Search Rankings
Meyer's Pharmacy has served the local community in the metro Boston area for two generations.
Providing both standard and holistic medicines, they pride themselves on friendly service from
knowledgeable staff who work with patients to find the over-the-counter remedies they seek, while
filling prescriptions with a healthy dose of sound information for every customer. In addition,
they are a compounding pharmacy, creating custom medications for rare conditions or specialized
needs. With a new website, they wanted to attract three groups of consumers:
1. Holistic-health consumers who wanted more personalized service than the large natural
supermarkets nearby provided
2. Local shoppers in the greater Boston area who simply wanted a friendly community pharmacy
3. Specialized-needs patients who require medications from a compounding pharmacy
Owner Henry Meyer's goal was to increase prescriptions from patients in the third group, espe-
cially. These patients are among the most loyal consumers, leading to the highest CLV and thus the
greatest ROI for the store's marketing investment. The store was already a leading regional provider
for many custom medications.
Working at the time as an independent consultant with a consortium of fellow marketers,
author Christina Inge created an extensive list of keywords associated with each groups needs. She
then used a tool associated with paid search that is also useful for organic SEO: a keyword traffic
estimator. These tools help marketers see the total number of searches for a keyword each month
or all year; the data can be filtered by region. Knowing how many searches occur on a keyword
can help determine how desirable it is to rank for that keyword. Because SEO is a time-consuming,
relatively resource-intensive marketing effort, SEO practitioners typically focus on those keywords
115
that attract a reasonable amount of traffic, are feasible to rank highly on, and engage the most valu-
able target audiences. Assessing keyword volume is the first step in determining target keywords
for SEO efforts.
For consumers in the first target segment, holistic health consumers, high-volume keywords
included “health food stores near me,” which was not relevant to remedy-seekers, “natural reme-
dies,” and “vitamin store near me.” None of these terms was very relevant to the target audience.
Market research further found that holistic consumers saw natural remedies as part of a more gen-
eral healthy-lifestyle shopping experience that included vitamins or foods, products not offered
at Meyer's. In addition, many large retailers already ranked well for local searches on these terms.
They would be difficult to outrank with Meyer's budget.
Christina found little competition for “pharmacy” searches in Meyer's neighborhood of north-
ern Cambridge. The store already appeared in results, but at the fifth place from the top ranking.
Although search volume was also low, it was essential to rank higher for so relevant a term.
Finally, given the company’s priority of attracting high-CLV compounding patients, focusing
on “compounding pharmacy Boston” was essential to meeting company goals. Search volume data
showed traffic of approximately 100 searches a month. Specific compounded remedies accounted
for an additional 300 searches a month. Though modest, this search volume represented substan-
tial repeat business. Eight competitors ranked for the keyword or related variants. Meyer's was
nowhere to be found in search results for the term.
Using the MOZ SEO tool, Christina reviewed the ranking factors of each competitor that
ranked higher for the variants of the top keyword, “compounding pharmacy Boston.” Some had
significant technical issues with their sites; this data indicated that a new site that avoided such
technical issues had a chance to rank higher. A scan of the new Meyer's site revealed key technical
challenges: the site had no metadata, lacking title tags and meta descriptions. Two competitors had
extensive inbound links, while others had only limited inbound linking profiles.
A manual qualitative data-gathering revealed the marketing activities contributed to ranking:
Blogging frequently contributes to search rankings, as new content is thought to be favored by
search engine algorithms. None of the competitors had a blog.
Armed with this data, Christina initiated a three-pronged, data-driven SEO effort:
1. Complete metadata for all pages, focused on the keyword “compounding pharmacy Boston"
2. Anew blog with content on remedies with keyword-rich text
3. Inbound linking efforts aimed at winning quality links from relevant sites
By focusing on the keywords relevant to the client's top market segment, using data to assess
competitors’ ranking factors, and building an SEO program based on that data, Meyer's was able to
win at local search. Three months after initiating search engine marketing, Meyer's ranked as the
number one search result for their top keyword. They were also in the number two ranking posi-
tion for local pharmacy searches, behind a leading national chain. Using data to focus efforts on the
highest-ROI marketing efforts produced results.
4.10 Conclusion
Organic search data is a key data input for the marketing mix. Not only is search engine opti-
mization a critical channel for digital marketing, but key search data, such as keyword metrics,
provide insight into consumer preferences across the 4Ps. Keyword data is especially useful for
product strategy development, content marketing, and brand positioning. In addition, reports such
as inbound links can provide guidance for public relations and key partnership initiatives. As an
input to SEO strategy, data can provide a roadmap to what search terms will yield the most ROI,
how to rank higher than specific competitors, and what technical modifications may improve a
site's search engine results page (SERP) rank position. Search data is essential to all marketing pro-
grams.
SEO professionals and digital marketers use competitive analysis, keyword conversion metrics,
inbound link reports, and technical analysis to guide steps they can take to improve a site's search
engine rankings. Such data provides insights into how a brand's website performs across key ele-
ments that factor into search engine algorithms.
Marketing professionals outside of SEO use keyword conversion data and inbound link reports
as inputs to public relations, partnership initiatives, content marketing, marketing funnel opti-
mization, brand positioning, and product strategy. Such data provides insights into consumer
needs, a brand's online reputation, and public relations opportunities.
Keyword analysis involves gathering data on search volume, long- and short-tail keywords, and
conversions by keyword. It often also includes a qualitative analysis of the consumer intent behind
searches using specific keywords.
An SEO audit involves using both manual data collection and specialized tools to build a com-
plete set of data on a brand's competitive search engine position, technical conditions, and ranking
Opportunities.
117
1. What is the difference between PPC and SEO? Is one better than the other?
. How are organic and paid search results different? What enables a webpage to appear in
paid search results? How do webpages appear in organic search results?
. Explain the importance of a webpage’s average position in search rankings. Why is a higher
search position more desirable than a lower one?
. What is a keyword?
. What is search visibility? Why do marketers care about search visibility?
. Explain the difference between search visibility and average position.
. SEO tools provide inbound link reports. What kinds of information can you gain from studying
these inbound links?
. Why do you and your family/friends get different search results when searching the same
thing?
. What are some of the data types collected in a technical SEO report?
. What is site speed? Why is it important?
. Why is a good user experience important in SEO? What technical metrics measure user
experience?
. What is meant by keyword conversion analysis? Provide an example of a keyword-based
conversion.
. What is the role of SEO in inbound marketing?
. How is organic search data used in developing a customer journey map?
. Explain the significance of marketing funnel optimization. What search metrics are useful for
marketing funnel optimization?
. What are some metrics used for keyword analysis?
. You have just launched a new line of camera lenses, targeted at amateur photographers.
You want your site to be visible in Google searches. How would you start to gather data on
what specific Google searches would be most important for you to be visible in, and how
would you assess what pages are already ranking well for those searches?
18. You run an all-night diner near your state’s largest college campus. You find that several
other nearby restaurants rank higher in search results for “restaurant near me” than your
diner’s website. How would you assess the reasons for this discrepancy?
19. After six years in business, your friend’s yoga studio has finally started to rank in Google
search results for “hot yoga” —however, she only offers one hot yoga class. What would you
advise her to do, based on your understanding of using keyword data to understand con-
sumers?
20. Your boss asks you to find media, such as magazines, bloggers, and vloggers, who have
written about your competitors in hopes that you can pitch these same media for your own
business. What search data would help you identify these media?
. “What is Quality Score?” Wordstream, July 24, 2021. https:/Awww.word-

stream.com/quality-score.
Endnotes . “Bid on Viewable Impressions Using Viewable CPM.” Google Ads Help,
May 12, 2021. https://support.google.com/google-ads/answer/3499086.
. “About Quality Score.” Google As Help, July 24, 2021. https://sup-
port.google.com/google-ads/answer/6167118?hi=en.
. Irvine, Mark. “38 Simple PPC Formulas Proven to Lower Your Costs.”
WordStream, 2021. https://www.wordstream.conmV/blog/ws/2016/10/17/
. Marketing Charts. “Where Shoppers Say They Start Their Product Hunt: ppc-formulas.
Amazon > Search.” Marketing Charts, https://www.marketingcharts.com/
. “Cost per sale: What is cost per sale?” Wordsteam, July 24, 2021.
industries/retail-and-e-commerce-113138.
https://www.wordstream.com/cost-per-sale.
. “Global Search Engine Optimization Services Market Data and Industry
. Irvine, Mark. “8 Simple PPC Formulas Proven to Lower Your Costs.”
Research Analysis.” The Business Research Company. https://www.the-
WordStream, 2021. https://www.wordstream.com/blog/ws/201 6/10/17/
businessresearchcompany.com/report/search-engine-optimization-ser-
ppc-formulas,
vices-market.
ite “YouTube: The 2nd Largest Search Engine (Infographic).” Mushroom Net-
. Lyden, Carolyn. “Key Trends in PPC, Reporting and Analytics in 2021
works, May 12, 2021. https://www.mushroomnetworks.convinfograph-
and Beyond.” Search Engine Land, April 2, 2021.
ics/youtube---the-2nd-largest-search-engine-infographic/.
https://searchengineland.com/trends-in-ppe-reporting-and-analytics-
in-2021 -and-beyond-from-smx-report-3467
77.
. Marketing Charts. “Where Shoppers Say They Start Their Product Hunt:
Amazon > Search.” Marketing Charts, May 22, 2020. https://www.mar-
ketingcharts.com/industries/retail-and-e-commerce-1 13138.
CHAPTER 5
Understanding Your
Landscape
Learning Objectives

1. Define the role of different sources of competitive, contextual, and benchmarking data,
including public records and proprietary tools.
2. Describe the role of market research in assessing an organization’s context and competition.
ioe). Analyze the role of competitive and contextual data across 4Ps.
4. Apply benchmarking to specific areas of marketing practice.
Marketing, by its nature, is about markets: the consumers who buy goods and services, their other
options to meet their needs, which we call competition, and the global trends that shape the
products and promotions marketers create. Measuring a company’s internal performance can tell
marketers much about the success of their programs. However, every company exists in a unique
context of other, competing products, industry norms, and evolving consumer expectations. Across
the 4Ps, competitive, benchmarking, and industry data informs every aspect of the marketing deci-
sion chain. Marketers need competitive and benchmark data when they do the following:
¢ Develop products: Brands must consider how similar products fare in the marketplace,
whether a market is saturated with competing products, and what features rival products
offer.
¢ Design pricing: Pricing must align with consumers’ expectations, hence, should take into con-
sideration competitors prices.
» Create promotions: Advertising can reference a product's superiority to rival brands, tout
unique features, or herald competitive pricing.
- Define place: Distribution channels may align with where customers already seek rival prod-
ucts or offer differentiation through novel distribution channels.
In this chapter, well learn how companies access ways to analyze a company's competitive
position and explore methods of creating useful competitive analyses.
Companies collect data on what other organizations are doing to understand their competi-
tion, but this is not the only reason. Data is also important to understand industry trends, or to
set benchmarks for expected marketing performance. By gathering data on other organizations,
and on their industries as a whole, companies are able to compete in an increasingly complex mar-
ketplace, develop products that consumers find attractive, and form an idea of success for any
marketing program.
5.1 Traditional Sources of

Competitive Data
Companies have been analyzing their competition for centuries. Advertisements dating back to
pre-Revolutionary America often note that the advertised product is superior to others. This mes-
saging accelerated in the 19th century, when the Industrial Revolution increased the range of
products available to consumers.
For today’s brands, competition is as relevant as ever, yet also greatly transformed by new
business practices. Consumers have more choices, yet markets are often becoming more niche.
Competition has also been reframed as fluid, with competitors transforming into collaborators
under the right conditions, joining forces to provide the right solutions to customers or address
changing economic, demographic, or logistical realities. As competition becomes more complex, the
need for competitive data is greater than ever. Thankfully, the range and availability of data avail-
able about a firm's competitors is more extensive than ever. In this chapter, we will explore key
sources of data brands can use to assess their competition across all 4Ps.
Data Brokers
Data brokers are organizations that collect and sell data about individual consumers, individual
data brokers
companies, and industries. Just as data brokers offer rich data on consumers, they also offer com-
A company that sells data,
usually about individual
plex information on competitors. For example, many data brokerages provide extensive data on the
consumers or individual staff of many leading companies, which provides insight into an organization's structure, talent,
companies. and possible strategic goals. Data brokerage data can show, for instance, whether a company has
recently hired a large number of product engineers or salespeople. This can indicate their invest-
ment in new product development or a growing sales effort, perhaps to address a new market.
While watching personnel changes alone cannot indicate a company’s direction, it can be additional
supporting data to confirm observations from other data, such as analyst reports, social media data,
and patent filings.
Consumer data can also be part of competitive analysis of very large organizations. Data on
the paystubs of 38% of consumers, for instance, is available via brokers such as Equifax." If a com-
petitor is the largest employer in a particular city, gathering data on the residents of the same city
will likely yield information on the company’s employees, including their salaries, education levels,
ages, other demographics, and psychographic data. Though such data-gathering may be intrusive,
it can also be instructive when competing with a rival organization for talent.
Data brokers also offer comprehensive profiles of many large companies. They include key
customers, locations, industries served, and company history. They may also include summaries
of stock analyst predictions of how a company’s shares are likely to perform Brokers will also
illuminate the relationships between companies, highlighting key suppliers, subcontractors, and
partners. This can help identify the parts of an organization's supply chain, for a better understand-
ing of both their product and placement strategies.
Data brokerages are often expensive, especially for B2B data. Their chief value for many orga-
nizations is that they aggregate data from many sources. Though some sources are public, others,
such as consumer income levels, are private or at least difficult to obtain without working with a
data brokerage. Comprehensive data, clear, pre-made reports, and reliable fact-checking are among
the reasons companies use data brokerages for competitive data.
121
Patent Filings
Under most countries’ laws, companies can file patents to protect their intellectual
property: inven-
tions that they have created. A patent is an official declaration establishing that a specific patent
person,
group of people, or company has created a new product or method of doing things. Once patented, An official declaration
establishing that a specific
that is, protected by a patent, the product, part of a product, or method outlined in the document
person, group of people,
cannot be made or performed by others without the patent owners permission. For instance, Ama- or company has created a
zon has patented the technology underlying its 1-Click Ordering feature. That means that no other new product or method of
doing things.
ecommerce platform can enable one-click buying in the exact same way that Amazon has. Patents
offer narrow protection; Amazon's patent doesn't prevent other companies from creating similar
useful checkout features.
What makes the world's patent systems useful to data-driven marketers are the patent docu-
ments themselves. They are often highly detailed because patents protect only the exact way an
invention works, so that invention must be described exactly. This can tell marketers what types
of products their competitors are working on, often down to the component level, as components
are often patented. When focusing on product within the 4Ps, patent filings provide a window into
competitors’ product pipelines. They can help identify upcoming products, leading features of new
products, and, taken together, the future direction of a company’s product portfolio.
Let's see this in action. Michaela Sun is the founder and CEO of a ski company, Shwoosh.
Searching patent filings for your three biggest competitors, she finds that one of them, Snowsi, has
patented a new ski shape that promises faster run times. Until now, Snowsi has targeted amateur
skiers. This new product is useful mainly to competitive athletes; the patent filing documents indi-
cate that one benefit of the new shape is increased racing speed for users. Knowing this, Michaela
realizes that this competitor is now addressing a new market segment. In addition, she knows what
products they are developing, with what exact features, to serve this segment.
With this data, she determines a course of action for the organization's product strategy:
adding new product features, developing entirely new lines, or addressing different markets. In the
future, she may also shift your promotions, creating materials that emphasize Shwoosh's superior
product. By gathering data on your competitors’ product research and development (R&D), you
gain insights that strengthen your own market positioning.
Securities and Exchange Commission and

Related Filings
Any corporation that offers stock for sale to the public must file reports regularly with the United publicly traded
States Securities and Exchange Commission (SEC). These filings present a wealth of data on any A type of company that
publicly traded organization. Publicly traded companies are organizations whose stock is sold to sells shares of its stock to
anyone interested in purchasing it, typically on a stock market. In addition, many companies pub- the general public, rather
than being privately
lish more than the minimum amount of data required by law in an effort to attract investors to buy owned.
their stock.
A publicly traded company’s annual report presents an overview of the business, including the annual report
key industries they address, their executive staff, product lines, and geographic areas of operation. A comprehensive report of
an organization’s activities
Typical annual reports include details on the performance of existing product lines, along with data over the past year,
on R&D of new products. This is highly valuable to other firms, enabling them to understand the including HR, product, and
the mar-
products against which they compete. They can project new product lines that will be in financial data.
strategy based on the information. They can
ket with this data, formulating a product development
create competing products with either similar features or develop a different feature set to address
appeal of com-
a different segment of the market. In terms of positioning, they can understand the
petitors’ products in the market, focusing on the benefits of their own feature set with a better
understanding of other options available to consumers.
In addition, an annual report must include complete topline financial details, such as the com-
pany’s profit and loss statement. This can reveal a company’s level of profitability, its key sources
of revenue, and its major expenses. For instance, a company in the co-working business may collect
extensive rent from tenants, yet spend so much on marketing, office decor, and utilities that it is not
profitable. Its competitor, on the other hand, may run a more streamlined space, making it more
profitable even with less square footage. A small compostable dinnerware company may have mod-
est revenues, strong sales, and large investments in new sustainable product technology. It may
have a net loss, yet with a promise of turning its early investments in new technology into large
future profits. Such information is available from annual reports.”
Marketers do not need to be financial experts as well to gain much insight from SEC filings.
The data presented is straightforward:
¢ Profit and loss (P&L) statements show a company’s revenues and expenses, categorized accord-
ing to broad categories such as operations, R&D, and debt servicing.
* Balance sheets reveal a company's debts and assets, such as buildings owned, as well as intan-
gible assets such as trademarks, patents, and copyrights. They also reveal the amount of
inventory a company has on hand, if it makes or sells a physical product.
¢ Cash flow statements, as the name implies, reveal the money flowing in and out of a company.
They can reveal sales volume, as well as more detail about expenses. They can reveal whether
a company is spending rapidly on new locations, hiring a lot of staff, or, conversely, curtailing
short-term expenses.
Trends over time in SEC filings provide a picture of a company’s strategies in product, pro-
motion, pricing, and placement. For example, let's go back to Shwoosh. Two years ago, their P&L
statement revealed large investments in R&D. Today, those same filings for this year show several
leases on real estate, high salary costs, and extensive marketing investments. Not surprisingly, they
soon announce on their Instagram account that they are opening “Shwoosh Experience Centers”
where skiers can get fitted for skis, purchase a new line of Shwoosh clothing, and take lessons. This
represents a major shift in the company’s product offerings, as they added their new professional
ski and clothing to their product lines as well as introducing a service. It's also a shift in their place-
ment, moving from selling online and through ski shops to owning their own venues. It’s also a
shift in promotions, with a doubling of investment in their marketing department.
Examining P&L data over several years may help you to anticipate competitor moves. Though
SEC and annual report data can be interpreted several ways, skilled analysis can help with projec-
123
tions of likely organizational actions, such as launching new product lines, changing
distribution
channels, or adding services to product lines. These filings also outline the scope of such
actions
as measured in dollar investments. By closely analyzing long-term SEC filing data, a full picture
emerges of broad organizational strategy.
As powerful as individual SEC and related filings are, they become a still stronger source of
data when analyzed in aggregate across an entire sector. Ongoing review of multiple competitors’
SEC filings allows marketers to forecast industry trends across all four Ps. Taken in aggregate, this
data alerts marketers to large-scale transformations in a sector's pricing, product, placement, and
promotional baselines. While monitoring competitors’ promotions is possible using the data tools
explored in other chapters, pricing, product, and placement data is often best available from SEC
filings when a brand's budget only permits uses of low-cost competitive data sources. Imagine your
company competes with Shwoosh. If they launch a new line of skis, open their own experience
spaces, and move into both lessons and clothing, those actions present a shift in your competi-
tive landscape. However, the size of that shift depends on how much your target audience overlaps
with that of Shwoosh. It also depends on their market share; if they are a small, niche brand, their
actions may set a trend, but it may be years before the entire industry follows suit. However, imag-
ine that the top six brands in winter sports all launch clothing lines. Now, you may need to make
changes in your go-to-market strategy more quickly, to keep pace with what is now a large industry
trend. You may still opt to focus on your core product, skis, but doing so still requires a response to
changing industry norms. Your promotions may shift to emphasize that your brand stays true to
its core product, repositioning as a “classic” brand. You may shift distribution channels to offer more
face-to-face engagement with customers, creating popups at ski slopes. While the decision of how
to respond to industry trends is very much specific to each brand's team, all brands need to know
their competitive landscapes.
Finally, in marketing analytics, marketers often want to know what “good” or “average” perfor-
mance looks like, in order to compare their own efforts. For instance, how would an emerging ski
brand know how much to invest in marketing? How much to spend on R&D? What a normal pay-
roll as a percentage of sales should be? By analyzing P&L, cash flow, and annual report data across
their industry, the company can baseline typical spending for their peers. Most industries have
their own expected profit margins, popular operating models, and typical product lines. For exam-
ple, the restaurant industry sees profit margins of 3-5%, while pharmaceutical companies often see
profits in the double digits. It would be unrealistic for a new restaurant chain to expect profits of
30%, given industry norms. Consumer goods brands spend more on advertising, as a percentage of
revenue, than industrial parts distributors.
Knowing these baselines across the 4Ps helps brands budget appropriately. They also help with
strategic planning across all aspects of marketing and, indeed, most other aspects of a business.
Companies do not need to follow industry norms. Indeed, choosing to innovate provides strate-
gic advantages. Having baseline data on norms allows companies to make effective decisions as
to when to follow norms or when to challenge them. For instance, many brands in recent years,
including the food and household goods company Brandless and the beauty company Deciem,
have innovated by reducing expenditures on real estate, promotions, and packaging, while spend-
ing some of those savings on product R&D. In this way, they have gone against industry baselines
in the 4Ps, creating new product positioning and pricing models. Knowing the baseline data on how
companies in their sectors address the 4Ps helped them innovate by challenging those norms. Data
can provide a framework for keeping up with trends, or a challenge to create new ones. In either
case, baselining data is a powerful tool in a marketers’ planning toolset.
With SEC data, a brand can anticipate changes in their industry, closely monitor a single com-
petitor or group of competitors, and also baseline normative industry performance.
Primary Data Sources
More data than ever is publicly available about any company. This makes gathering data easier than
primary data
ever: it also means marketers often need to look at a very wide range of data sources to gain a full
Data that comes directly
from its source and has
picture of their competition. Among the many other competitive data sources are a range of online
not been analyzed, such sites and databases. Many make up the universe of primary data, or original data that comes
as a competitor's own directly from a source without filtering. Primary data is important because it's straight from the
website.
original source, such as an organization's own website. This gives you with an opportunity to see it
unfiltered and draw your own conclusions about what it means.
Organizational websites, advertising, and marketing collateral: When gathering data on

competitors, its own materials are a valuable, if biased, source of data. It's critical for marketers
to monitor their competitors’ websites, marketing materials, and advertising consistently.
Though clearly promotional, this content provides the core primary materials on an orga-
nization's key messages, values, products and services, personnel, markets served, and other
fundamental data. Though a competitor's statements of market share should not be taken at
face value, it’s essential to monitor their primary materials. Files should be kept of all major
competitors’ brochures, data sheets, and support materials. Select ads should be collected and
filed. Regular collection of all of a competitor's own materials is the first step in a competitive
analysis, which we will examine in detail in the section on performing a competitive analysis
in this chapter.
Review sites: Review sites such as Yelp have been met with some skepticism in recent years.
The proliferation of false reviews has eroded trust in review data from consumers and the
marketing profession alike. In 2018, The Washington Post found up to 61% of reviews for certain
product types, such as electronics, are false on some popular e-commerce platforms, while
in 2021, a fake review ring was found to include more than 200,000 individuals." As a result,
mining reviews for sentiment has poor accuracy in highly competitive product categories.
However, in less competitive categories, the majority of reviews are genuine, thus making them
useful as sources of competitive data. In all categories, manual analysis, rather than relying on
machine-learning techniques, can yield accurate data on consumer sentiment about a product.
It can also highlight specific popular features, as well as how customers are using a product.
While they must be used with caution, review sites continue to yield data with skillful manual
analysis.
Sales conversations: Sales teams typically receive feedback from prospects on other products
those prospects are considering for purchase. The feedback can include information on pric-
ing, special offers not publicly advertised, future product directions, and customer support
levels. They also include sentiment data: Sales teams are often among the first to hear whether
a competitor is well or poorly regarded. Logged in a CRM, such sales conversations become
essential competitive intelligence.
Media coverage: Though often included in analyst reports, media coverage merits its own
analysis when closely examining a key competitor. In-depth analysis of media mentions of
a company can yield information on reputation, growth, sentiment, pricing, and distribution
strategies. One useful application of data on a competitor's media coverage is a meta-analysis
of the competitor's media strategy. Since much press coverage is the result of public relations
programs, knowing the media a company has approached, the story it transmits to the press,
and the executives who give interviews can reveal much about a company's strategy.
User groups: Many technology companies support user groups: semi-autonomous organiza-
tions of a product's users, where such users can share tips, review products, and connect
professionally. Many user groups are closely controlled by the sponsoring technology com-
pany, while others are more independent, with little management control. User groups are rich
sources of data on key product benefits and challenges, as well as power-user sentiment. While
those that are independent are the best sources, given the lack of censorship of content by the
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sponsoring organization, all user groups should be closely monitored

for qualitative data by a
company’s competitors.
Market Research
Often, the only way to know something about a competitor is to do the research directly. Much
competitive information that companies seek is highly specific, and thus unavailable from a gen-
eral-purpose data source. Companies may wish to know answers to questions such as the follow-
ing:
* How do consumers perceive our brand in comparison to our competition?
+ Where do customers feel our prices are too high in contrast with most other vendors in our
industry? Too low?
« When would consumers consider switching from our competition to our offerings?
¢ What brands do consumers shop when they need products such as the ones we offer?
For instance, when companies want to know how favorably they are viewed in contrast with
their competition, they often conduct survey research, asking consumers directly to rate them in
comparison to their peers. They can also ask whether consumers are aware that they offer a prod-
uct similar to a better-known one offered by a competitor as a way to gauge their penetration of
a market. Another survey question type that yields insight is unprompted awareness, which asks
respondents to name brands that they associate with a specific quality, such as “good value.” Brands
can compare how many consumers think of them as a brand that, for example, offers good value
products in comparison to how many regard their competition as such.
Assessing industry trends also frequently requires conducting original market research. For market research
instance, surveying customers on their preferred product qualities can produce insight into new The discipline of
research and development needs. researching consumer
attitudes and market
Many times, market research efforts combine industry research with competitive analysis to conditions through
provide a fuller picture of an organization's competitive landscape. Let's say, for instance, that you traditional means.
run recruitment for a local college. Your school, Belmont University, has innovative majors in engi-
neering and nursing, green dorms with zero carbon footprint, and a quaint, rural campus. Nearby
Weston College, by contrast, is near the city, offers more traditional liberal arts majors, and has older
dorms. You hire a market research firm, School Insite, to gather data on several competitive factors:
- How important are features such as location and dorms are to prospective students?
¢ What college majors are most popular among high school juniors and seniors?
- How do prospective students perceive your school in comparison to Weston College across fac-
tors such as quality of education, living conditions, and location?
As you can see, the research is a mix of general market information that shows how important
your greatest strengths are in comparison to the strengths of your competitor, along with direct
comparisons in consumer perception of your brand versus your rival's. Market research is time-
consuming, so it often makes sense to combine questions into more comprehensive surveys.
In effective market research, questions are first written to avoid leading respondents to a par-
ticular answer, to avoid biasing results. The entire survey is designed so that questions go together
logically in sequence. Survey fatigue must be avoided by ensuring that a survey is not too long.
Survey questionnaires are created, often using a digital survey tool such as Qualtrics. Potential
respondents are identified, such as college students, new parents, or consumers in a specific loca-
tion. Lists of respondents in the identified segment are obtained, often through list brokerages.
Market researchers then deploy the survey, sending email messages, providing survey kiosks in key
of how
locations, or even calling prospective respondents. Market researchers typically set targets
many responses they need to have confidence in survey results.
Once a sufficient number of responses to the survey arrive, researchers tabulate the results,
which are typically presented as a mix of charts, tables, and free-response transcripts. Not all mar-
ket research has a competitive focus: Many surveys focus only on industry factors, on consumer
preferences for specific products or features, or many other topics. However, a significant propor-
tion of market research has at least some focus on gathering competitive data. Moreover, market
research is often a firm's only reliable source on their competitive positioning. This is especially the
case when marketers need to gather specific data on how their brand compares with others, con-
sumers’ most-desired product features, and the public's perception of rival brands. As a result, many
marketers feel market research is a core part of any competitive data-gathering.
5.2 A Closer Look: Building a Brand

Times are good at Shwoosh. Ski sales are growing, as are sales of their signature snowboards. With
growing sales, management is looking to turn the brand into a mainstream success rather than
a niche brand. The team understands that mainstream skiers may have different perceptions of
the brand than their core segment of competitive skiers. They also know they will expect different
product features, buy their products differently, and have different media habits than their semi-
professional peers. What the Shwoosh team doesn't know, however, is exactly what these differing
habits, needs, and expectations are. That is where market research data is their best option. Using
market research, the ski brand team can ask the target audience directly about their current pref-
erences, positioning their brand competitively for their upcoming expansion.
One key question for the team is who their main competitors are. While ski brands abound, the
team wants to know what brands are top of amateur skiers’ minds when they go shopping for new
gear. A top-of-mind survey will ask consumers to name the first names they think of when given a
specific product category. That can tell Shwoosh marketers what brands their audience knows right
now. From there, they can also ask what perceptions are of these top-of-mind brands: What quali-
ties do consumers associate with each one? Is it a value brand, for instance, or seen as a more luxury
offering? What about its price? Is it considered reasonable, too high, or so low that consumers ques-
tion its quality? What features are most exciting about each brand? What are its least attractive
features, where Shwoosh may see a vulnerability to which they can offer an attractive alternative?
The Shwoosh team identifies a list of 20,000 hobbyist skiers in the United States and Canada
via a data broker. The list is segmented by income level, age, gender, and location. Further, it's also
segmented by the amount each consumer spends on winter sports each year and what other hob-
bies they enjoy. This provides valuable data on how other brands are positioned toward different
groups of consumers. The team creates an email survey of twenty questions, asking about brands
consumers like, their perceptions of each brand's quality, value, pricing, and best features. They also
ask general market questions, such as where consumers like to buy their skis, what features they
look for, and how often they shop for winter sports equipment.
The survey is distributed via email. An incentive to reply is included with the cover message:
Respondents will be entered into a drawing to win a weekend in Colorado. With a response rate of
3%, the survey does about average in gaining consumers’ willingness to share their opinions.
The results are pleasantly surprising: More than 40% of hobbyist skiers are interested in ski
features that none of Shwoosh's top competitors offer. Consumers rate several competitors as good
values. However, none are rated as having premium ski features at a reasonable price. This presents
an opportunity to position Shwoosh's products as unique across both pricing and features. By con-
ducting market research with a competitive focus, Shwoosh can launch their new product with
greater confidence.
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0.3 Digital Sources of Competitive

Data
Traditional sources of competitive data offer much information that is not available elsewhere.
Gathering some of that data, such as that from data brokers, can be costly. By contrast, digital
sources of competitive data are relatively cost-effective. Many tools are free or cost under $100 a
month for a subscription fee, in contrast with the high costs of data brokerage content or analyst
reports, which we will explore later in this chapter. Neither type of tool is superior to others. Most
brands need to use both traditional and digital tools to build a complete picture both of specific
competitors and their industry as a whole.
In this section, we will explore the many digital sources of competitive data. Some help mar-
keters understand the digital marketing capacity of their competition or their industry's digital
landscape. Most, however, have much wider application. They help marketers gather data on their
competition's products, placement, pricing, and promotions. Further, they allow for sentiment
analysis, capturing consumer sentiment in depth from everyday content created by customers on
the web.
my
Analysis
with Chiara Clemente
Social Media Tools
Social media has dramatically changed the competitive landscape for companies. Consumers on
social platforms share their views on brands, products, needs, and preferences. While once compa-
nies relied solely on costly surveys to understand consumers’ views on competing brands, they can
now use social media data to learn about consumer attitudes toward other brands, the relative pos-
itive or negative sentiment toward different products in the market, and other competitive metrics.
“While social media data alone is not sufficient to fully understand consumers’ preferences, it oh
be an ongoing way to collect data on a target audience's attitudes that is immediate and timely,
notes social media expert Christina Newberry, writing in the Hootsuite Blog."
Competitive analysis of social media data can take many forms. The simplest is often a com
basic
petitive social media audit. Brands first identify a set of peer brands, then audit those brands
We'll learn
social media metrics, such as number of followers per channel, average likes, and shares.
more about social media data in Chapter 6. Many of the same data points brands monitor regard-
ing their own social media, such as post likes, can also be monitored for any social media property.
Social media management tools often automate some of the auditing process, making it simple
for brands to monitor the overall strength of competitors’ social media efforts. They can monitor
a brand's popularity, gauge how important social media is to a competitors’ marketing mix, and
track the demographics of their followers. All of this data is valuable in formulating a digital mar-
keting plan that addresses competitive challenges. It can also serve as an additional data source
for understanding a competitor's market positioning, key product lines, and customer service chal-
lenges. Overall, a basic social media audit is a foundational activity for many digital marketers. It
should also serve as a key data source for product and customer service teams.
More sophisticated social media analysis can include sentiment analysis around rival brands.
Sentiment analysis, which we will explore in depth in Chapter 6, is the use of social science or data
science tools, including those used in artificial intelligence, to mine text data to determine whether
the attitudes expressed are positive, negative, or neutral."
me
Competitive social media sentiment analysis can include analyzing consumer posts on a
brand's page to determine whether the brand receives a high number of complaints. It can also
involve analysis of posts about a specific product to determine its reception in the market. Social
media sentiment about competitors can also be segmented, to determine whether the brand is
viewed positively by specific audience segments, such as a given age group.
By performing sentiment analytics on posts about their competitors, brands can identify vul-
nerabilities of other brands. For instance, let's go back to Shwoosh, our ski brand. They have now
launched the new skis for competitive skiers, for which they filed a patent. It's now selling online,
at ski shops in select resorts, and at a major sporting goods chain. Consumers in Shwoosh’s core
target audience, amateur skiers, are taking to social media with mixed reviews. Sentiment metrics
on posts related to the new line, debuted as UltraMax, are 50% positive, 15% neutral, and 35% nega-
tive. This is different from sentiment about their core lines, which attract 70% positive sentiment.
Among the negative posts, comments reflect themes around price, difficulty of using the product,
or long wait times for backordered products. At the same time, competitive athletes are not dis-
cussing the line. Your social media analyst tracks key winter sport influencers using a list feature
in their social media management tool. They update this tracking weekly through influencer man-
agement platforms, keyword searches, and traditional media research, such as reading important
industry publications. Searching for mentions of UltraMax by these influencers, they find its share
of voice, the measure of what percentage of posts about an industry relate to a specific brand, to be
5% among influencers.
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Web Analytic Tools

Many web analytics tools provide estimates of competitors’ web traffic. Although the available
data
is by no means as comprehensive as the confidential data available on our own sites, it still provides
information on the relative popularity as an online destination, its target demographics, and the
sources of its web traffic.
One of the oldest tools for gathering competitive web data is Alexa, not to be confused with
the voice assistant. This tool, available for the past two decades, provides the Alexa Rank, a relative
score of a website's popularity, expressed as an absolute number. The lower the number, the more
popular the website; a site with an Alexa ranking of #1,000,000 receives more web traffic than one
with a ranking of #3,000,000. While knowing the relative size of traffic to a website is valuable, there
is often little meaningful difference among competitors in a single space. If your website ranks
#3,147,983 and your competitor ranks #3,247,980, that makes very little difference to your competitive
strategy.
Other tools provide even greater insight. SimilarWeb, a subscription tool, allows competitors
to see a website's primary traffic sources, such as inbound links, advertising, and social media, with
the percentages driven by each channel. It approximates website audience demographics as well as
benchmarking traffic statistics across an industry. It also flags new sites that suddenly receive large
growth in traffic, allowing the identification of new competitors and trending products. It also pro-
vides estimates on a website's basic metrics, such as the length of the average user's visit to a site.
All this data is valuable in understanding a competitor's relationship to its consumers, its relative
strength in the marketplace, and its key products and services.
Finally, some services are especially useful in analyzing a competitor's positioning and target
audiences. They provide data on audience demographics and psychographics. For example, let's
say you run Vince's Vinyls, an online retailer selling vintage and current vinyl records, players, and
memorabilia. You identify your competition as several similar online retailers, as well as a few large
brick-and-mortar establishments with an online presence. Among them is Mary's Music, which you
suspect is gaining market share from Vince's. Using several tools, you find that Mary's indeed has
gained significant traffic in the past six months. Moreover, the average length of a visit to their site
has increased from 1.27 minutes to 5.67 minutes—a significant increase. What does it mean? You
check out the interests of visitors to Mary's Music. Their visitors are not primarily music fans. They
are interested in vintage shopping or in specific musicians. While they may still become longtime,
loyal customers of Mary's Music, they may be making only an occasional purchase, such as some
vintage albums to decorate a space, or a sought-after album from their favorite artists. Your core
customer segment, by contrast, are music aficionados, interested in building larger collections of
vinyl recordings. You feel that, even though Mary's Music is gaining interested website visitors, it
does not currently constitute a significant threat to your market share. You will, however, monitor
its web traffic and other metrics to gain a sense of its competitive threat, positioning your brand
accordingly. Perhaps, for instance, you will create ads to reach out to vintage design fans, or attend
several large national vintage markets, to test out the new market. You might pursue PR with vin-
tage decor magazines, to further reach a similar market to Mary's. Or, in contrast, you may choose
to update your brand messaging to emphasize that Vince's is a source for serious music fans, rather
than those who are just dabbling in collecting vinyl. This will strengthen your relationship with
your target audience while helping you differentiate yourself from your competition.
Search Engine Optimization and Cost per

Click Tools
As we learned when we explored search data, ranking prominently in search engines is a competi-
tive challenge by nature. If one site appears as the top search result for a term, that means that all
other competing sites are below the first position. Companies spend millions of dollars on search
advertising to appear as the topmost advertisement, a position determined partially by the amount
spent on the ad. They also spend considerable effort to appear as the top non-advertisement, or
organic, search listing.
As a competitive activity, search marketing relies on continual monitoring of competitive data.
Companies need to monitor their relative position in search engine results. Tools allow them to
monitor their competitors’ rankings on their important keywords, both in organic and paid search.
They can monitor how much their competitors spend on search ads and how many clicks those
ads generate. They can see the websites linking to a competitor's site, along with the exact page on
which the link appears. They can also measure the overall credibility of rival sites as web sources,
as measured by search engine optimization (SEO) tools’ proprietary formulas.
All of this data is provided by search tools such as MOZ, SEMRush, SpyFu, and other long-
standing platforms. Although the tools available and their names evolve with time, it remains true
that search engine marketing offers one of the richest toolsets for competitive analysis. This is
because search engines collect billions of bytes of data every year. This data is readily available
through free tools provided by search engines, such as the Google Keyword Planner, as well as the
paid tools mentioned and many more. Finally, because search focuses on consumer-initiated efforts
to identify desired products, services, or information, it provides an accurate reflection of current
consumer interests.
Through analyzing a company's top paid keywords, for instance, we can learn their priorities
for messaging, product lines, product features, positioning, pricing strategy, and target audiences.
Let's look at an example of what paid search data can show about a company’s overall marketing
strategy. Imagine a new raw food restaurant chain, SuperFood. It takes out paid search ads that
target people searching for “affordable healthy lunch,” “paleo lunch places,” and “quick raw food din-
ner.” It is a small chain with revenues under $1 million, yet it is spending $20,000 a month on paid
search ads. From this data, we can conclude the following:
+ Its pricing strategy is as a low-price product, or it is using penetration pricing to undercut com-
petitors’ prices in order to gain market share.
131
* The features it emphasizes are convenience, raw and paleo recipes, and
affordability. These
features stand in contrast with other restaurants in the region catering to health-con
scious
consumers,
° Its paid search spending is higher than typical for a company of its size. Thus, it's likely
that it
is seeking rapid gains in awareness, market share, and brand recognition.
+ It serves lunch and dinner; breakfast is not part of its current offering, meaning either it does
not compete with many other fast-casual restaurants it offers breakfast service, or it offers
such service but do not promote it as a core product.
Digging deeper into the data, we can examine its average cost per click, (CPC), finding that it is
relatively high for the sector, at $6 per click. This can indicate that its ads need more focused target-
ing, since costs increase for ads that are poorly targeted, as we will explore more in the chapter on
paid search data. However, it can also support the interpretation that SuperFood is moving aggres-
sively into the market, spending strongly on paid search to make gains in web traffic, awareness,
and market share. We can further learn the click-through rate (CTR) of its ads, learning how well its
paleo, raw, affordable meal messaging is resonating with consumers.
When it comes to competitive SEO data, we can learn much about competitors’ relationships
with influencers, their content strategy, and their brand positioning. We explored organic search
data in Chapter 4, learning that inbound link reports provide context on what links connect to a
webpage. We understood that competitive search rankings show us what keywords our competi-
tors rank well for, and how that search position is influenced by key factors such as site quality. In
this chapter, we will go beyond the use of SEO data for competitive digital marketing strategy to
explore its role across all aspects of marketing management.
When we incorporate SEO data into our overall company competitive strategy, that data cre-
ates additional strategic value. For example, let's say we know what influencers link back to our
competitor's website. We can use this data for more than simply approaching similar influencers to
gain our own backlinks. Instead, we can use thematic mapping to uncover the industry focus of a
competitor's promotional partners. This can reveal a brand's strategy for product development, its
distribution channels, its target audiences, pricing models, and revenue models.
5.4 A Closer Look: Launching a New

Product
Barabara “Barb” Cho has always loved fragrance. Graduating from business school with a degree in
sustainability innovation, Barb spent several years in the beauty industry as a marketing analyst.
Eventually, she won a startup pitch competition, winning the opportunity to work out of a Chicago
incubator to build her own company. She launched Florsy, a line of floral scents sold through exclu-
sive retailers. The world of fragrance is competitive, with big brands dominating a large proportion
of the industry. Niche brands always have an opportunity to win market share, however, with
unique scents and distinctive brand positioning. Once her time in the incubator is over, Barb needs
to establish her brand quickly, winning a loyal audience. Her first move is to analyze her competi-
tion. Floral scents are highly popular. Deciding her competition is mainly other niche brands, Barb
identifies thirty unique small fragrance brands that have at least one floral scent. To stay focused,
she narrows her data search to the top two niche brands.
Looking at her competitors’ search data, she finds that few are advertising using price-per-
niche beauty
click (PPC) advertising. This is unsurprising, given the limited marketing budgets of
average, they
brands. She finds only two competitors, Floriopolia and Beryl, advertising at all. On
fragrance” and
spend only $1,000 a month on search ads, targeting keywords such as ‘floral
. None of her competitor s are targeting
‘designer perfume.” Right away, Barb senses an opportunity
fragrance buyers who shop for a specific occasion, such as prom or for Valentine's Day gifts. She
decides to explore advertising her perfumes specifically as gifts or splurges to wear on special occa-
sions. Looking at organic SEO data, she finds that none of her competitors are ranking on the first
page of search results for top keywords such as “floral perfume.” Looking at what brands are rank-
ing on those search terms, she finds only major players, such as the top ten beauty brands. She
decides SEO is not an opportunity for Florsy because of the extreme competition from brands
with large marketing budgets. It's highly unlikely that a small brand could gain visibility in the top
search results without a monumental effort. On niche search terms, however, such as “organic rose
fragrance,” the landscape is different. The data shows that smaller brands are showing up on those
terms. None of her competitors is doing so consistently, however, so she decides that the data is
inconclusive as to how well her competition in doing in search marketing. In terms of how they
are positioning themselves, the data again shows scattered, seemingly accidental rankings on some
niche terms, but none seem to be part of consistent messaging or positioning. She decides that she
can carve out a brand position that focuses on specific floral scents, such as rose or freesia, to gain
the market's attention.
Looking at inbound link data, however, she starts to see more data on her rivals’ product
positioning. Floriopolia has inbound links from hip, urban magazines, fashion bloggers, and major
beauty influencers with a trendier look. They seem to be positioning themselves successfully as
a fashion-forward brand, appealing to consumers who want floral designs with an edge. Beryl, on
the other hand, focuses on lifestyle bloggers with an organic focus. They have inbound links from
organic lifestyle magazines, green beauty influencers, and vintage fashion blogs. Their target audi-
ence appears to be more environmentally aware consumers, with a secondary focus on fans of
vintage style. They also have one million fewer inbound links than Floriopolia, making them a
much smaller competitor, at least as far as PR reach and inbound linking are concerned. This can
be an indicator that they are a smaller competitor overall.
On social media, Barb sees much more consistency. Floriopolia has more than three million
followers, while Beryl has only 800,000. Engagement rates are higher on Beryl's Instagram and Face-
book, however, indicating that the niche brand's fans may be more invested in the brand than those
of the more popular company, Floriopolia. Armed with this data, Barb now has a better sense of
what her competition looks like: a mix of niche brands with loyal followings and growing small
brands that nonetheless aim for greater mainstream popularity. Knowing how the rest of her peer
companies position themselves, Barb chooses a niche approach for Florsy, one that's distinctive and
will, she hopes, inspire a loyal following.
5.5 Industry Data

We've talked a lot about analyzing our competition to position our brands better. When it comes to
positioning our companies competitively, however, we often don't have just a certain competitor or
set of competitors in mind. Thus, when it comes to positioning data, it's vital for brands to collect
data on the state of their industry in general.
Defining competitive data without limiting it to a focus on only certain competitors makes
sense for several reasons:
- It helps us anticipate competitive challenges that emerge from industry factors, rather than
only addressing existing products and companies. This enables firms to anticipate disruptive
innovation, entirely new types of solutions that do not exist currently. For instance, imagine if
you had led marketing for a limousine service when Uber was new. You likely would have only
identified other limo services, as well as traditional taxis as competition, missing the competi-
tive threat of Uber. By looking at an entire industry, you gather more varied data.
133
+ It refocuses data collection from a “threat management” framework to one

that looks to data
for fundamental input into 4Ps strategy. When companies gather data on broad
industry
trends, they are better able to understand the role of their products, promotio
ns, pricing, and
placement in the larger framework of an industry.
+ It allows marketers to look for creative opportunities in industry trends, such as
new product
features that are emerging as consumer priorities. Rather than looking at a competitor solely
as a vendor of competing products, in this approach, brands examine their competitors as a
group, looking for patterns that indicate industry shifts, such as the demand for new types of
products.
In this section, we will review key sources of competitive data and their uses.
Analyst Reports
Early in this book, we learned that analyst reports are a fundamental source of marketing data.
They present specialized researchers’ insights on industries and the companies in them. These
reports are critical for many marketers’ strategies.
In B2B marketing, analyst reports often provide data on the relative strengths of different
industry players, the most desirable product features across the industry and for specific target
markets, and the projected growth of the industry. It's important to note that some analyst reports
focus only on the big picture, looking at key trends. Such reports might examine only a few key
players and their roles. For instance, the analyst firm Gartner publishes Magic Quadrant reports
for many industries, declaring the leading companies within a sector divided into specific types
of leadership, such as “Leaders” and “Niche Players." Many organizations that you many consider
important competitors may not qualify for Gartner's Magic Quadrant, thus are not being part of
this report. In addition, analyst firms have specializations, meaning that they may provide deep
data on one segment of an industry, while providing less guidance on another.
Analyst relationships are also a valuable resource. Companies can become clients of an analyst
firm that aligns with their market, which gives them access to experts who research their industry
for a living. They can schedule calls with specific analysts, asking them direct questions and getting
more personalized, specific data than they would from reports alone. Thus, many companies with
larger budgets opt for these client relationships, though they are pricey, rather than simply pur-
chasing individual reports from an analyst firm. For companies with the budget, analysts can
provide valuable data along with expert interpretation of that data.
Government and Non-Governmental

Organization Reports
In the chapter on external data sources, we talked about the value of governmental and inde-
pendent organizations’ data in informing marketers. Government sources such as the Bureau of
Labor Statistics, the Bureau of Economic Analysis, the Federal Trade Commission, and the Depart-
ment of Agriculture publish numerous reports with extensive industry data. For example, the U.S.
Bureau of Labor Statistics (BLS) publishes extensive data on the demand for certain occupations,
including whether demand for certain skills will be higher, lower, or on par with average economic
and
growth. They also research the education needed for certain jobs, the conditions of workers,
the average career salaries. Think back to Belmont University’s recruitment program. Remember
data,
that the college is known for its creative majors in nursing and engineering. Looking at BLS
already
the recruitment team quickly learns that demand for talented staff in both occupations
outstrips supply, with high salaries and commensurate job satisfaction. This makes for an impor-
tant competitive selling point in marketing materials. Recruiters can cite the many opportunities
available to graduates of the college, including expected salary ranges, exciting careers, and job
satisfaction. By gathering industry data from governmental sources, they have an authoritative
source of information on consumer demand, as well as insight into their programs’ relative com-
petitive strength.
Non-governmental organizations also provide valuable insights and data. Organizations such
as the global Organization for Economic Co-Operation and Development study global consumers
income levels, needs, and priorities. They also provide data on the economic growth of global
regions. They identify key sectors for growth, examining areas where demand will be strong for
specific goods and services. When doing business internationally, companies can look to this data to
identify areas of opportunity for global expansion, product adaptations for local needs, and healthy
markets for any product.
Conducting a Competitive Analysis

The first step in a comprehensive competitive analysis is to determine the competitor set that a
team will analyze. This should include a range of competitor types:
- A brand's largest competitor(s) and those with offerings that are closest to the brand's own
products or services
- More distant competitors from a range of types, including emerging and new companies,
regional products, and more-established niche brands
Typically, a competitive analysis only includes direct competitors; it does not include imperfect
substitutes. For example, a coffee company would include other coffee and hot-beverage companies
in an analysis, but not soft drinks or fruit juices. These are substitute products from an economic
perspective but are not perfect substitutes. Thus, they are not used as competitors for competitive
analysis data collection.
Once direct competitors are established, marketing teams use several data collection tools to
analyze each company. Typically, if market research is available, it may be part of a competitive
analysis; however, it is often outside the scope of such an analysis to commission a new market
research study. Instead, data sources such as the digital competitive data tools discussed in this
chapter, as well as analyst reports, are used to gather data. Teams track statistics on each brand
as well as collect examples of each company's marketing materials. Typical statistics included in
an analysis may include sales numbers, market share, social media following, ad spending, organic
search ranking, paid search keywords, average review site ratings, and sentiment analytics data.
One key feature of data-gathering for a competitive analysis is the use of primary sources. Mar-
keters gather information from a competitor's website, their public announcements, such as press
releases, and their marketing materials. A competitive analysis typically includes samples of com-
petitors’ marketing creative. This can include screen captures of digital media, clippings of print
materials, and product images. To be effective, an analysis should include the full range of each
brand's communications, such as samples from all marketing channels on which a brand is active,
product brochures, web content, and other primary materials.
Organizing a competitive analysis can take many forms. One conventional structure is to look
at each competitor successively, presenting all their promotions, pricing, products, and placement
strategies, with an assessment of the exact nature of the competitive challenges they present to the
marketer's own brand. Another tactic is to present the analysis by channel. For instance, one sec-
tion may look at all print advertising across the sector, gathering together all print ads from each
competitor in that section. Different sections look at the competitive landscape across the 4Ps, with
additional sections dedicated to each marketing channel that a brand team considers relevant.
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How to Conduct a Competitive Market Analysis

https://Awww.campaigncreators.com/blog/competitive -analysis-benefits/
0.6 Benchmarking
Thus far, we have focused on analyzing industry trends, as well as on looking at our competition in
benchmarking
order to position our products, price them competitively, and reach unique customer niches.
Another way in which marketers look at data about other companies is for the purposes of The practice of
establishing data about
benchmarking. Benchmarking is the practice of establishing data about what's normative within a what’s normative within a
specific area of practice, such as display advertising, and comparing our own marketing results specific area of practice,
such as display
with these averages. In this section, we will look at using benchmarking data across the 4Ps.
advertising, and
comparing our own
marketing results with
these averages.
Using Benchmarking Data
Why benchmark? Knowing what is average in any area of marketing allows us to understand
whether our own efforts are successful. It also allows us to know when there is an opportunity for
improvement, setting goals for what an acceptable or stellar performance is. Think of many bench-
marks as a grading scale for marketing, while others can be a set of guidelines to which brands
can either adhere, or which they can challenge. For instance, let's say you manage social media
for a regional diner chain. You have more than ten million followers on Twitter and do not know
whether that is a good number or poor performance. Thanks to an industry benchmark analysis
that aggregates data across several industries, you learn that the average fast-casual restaurant of
your size has two million Twitter followers. By knowing this benchmark, you know that your social
media following is much higher than average. Benchmarking allows marketers to gauge their per-
formance against an external measure which, though not absolute, presents a reasonable marker
of what is acceptable or normal performance.
Sources of industry benchmark reports are scattered. Many are published by industry vendors,
who often have the greatest access to large numbers of digital marketing platform accounts. For
instance, in the email marketing industry, most benchmark reports are published by email market-
ing service providers. They are aggregate, anonymized reports of data collected about the millions
of emails sent using their platforms. Other benchmarking tools are provided by analytics vendors,
such as Google, which benchmarks web traffic data using their popular Google Analytics tool. Still
others are provided by government data or analyst firms, some labeled as benchmark data, while
others available as part of larger industry reports. Much benchmarking is undertaken by brands
themselves under the auspices of their market research programs.
In this section, we will learn about the importance of benchmarking data, how it's collected,
and how to analyze it.
Benchmarking Across the 4Ps
Whether they do it systematically or more informally, most companies benchmark when setting
strategy across the 4Ps.
conjoint analysis Product: Most products are not entirely novel—that is, there probably exists at least one com-
A form of data analysis parable product for most new products launched. If you are selling skateboards, for instance,
that aims to predict the your skateboard design will have much in common with others’. It will have wheels, be long
ideal combinations of enough to accommodate a rider, and have a flat surface for standing. Where your product dif-
features for a product.
Conjoint analysis is an fers will be part of its unique features. Benchmarking features helps establish both what
analytics methodology features a product will have in common with competitors’ and in what ways it will be unique.
often used to create Then, marketers can use that benchmark data for product positioning, communicating with
products that offer distinct
consumers about how their product fits their expectations, and where it offers new, improved
combinations features that
set them apart from their features. In addition, benchmark data about common features available in products currently
competition. on the market plays a key role in conjoint analysis, a form of data analysis that aims to predict
the ideal combinations of features for a product. Conjoint analysis is an analytics methodology
often used to create products that offer distinct combinations features that set them apart
from their competition. We will learn more about conjoint analysis in the Do the Math section
in this chapter.
Price: Knowing what is normative is especially important in certain aspects of the 4Ps. Most
brands want to price their products in a manner consistent with competitive products, for
instance. Unless your go-to-market strategy uses an outlier price to differentiate your product,
you will want to set your prices at a level that is near that of your competition, slightly higher
or lower depending on your pricing strategy, but still aligned with benchmarks. You would
not sell a shampoo, for instance, for $500 a bottle. Knowing what prices are typical in specific
product categories, such as value, premium, and luxury brands, helps companies establish rea-
sonable pricing.
Place: Consumers often form habits as to where they expect to obtain certain products. They
may expect to find soft drinks at a convenience store, for instance, while buying beauty prod-
ucts in drug stores and online. Normative data on distribution channels helps companies
understand the best distribution models for them. As with any benchmark data, a company
can choose to adhere to benchmarks, for instance, by selling their soft drinks in convenience
stores, or create a unique value proposition by challenging industry norms, such as selling soft
drinks in barber shops or other gathering places.
Promotion: Companies must know their competitors’ promotional strategies. However, they
also need to gather data on industry norms for promotion. For example, most organic product
packaging, advertising, and digital media use imagery of green leaves, earth-toned back-
grounds, and copy with words such as “organic.” These promotional norms establish expecta-
tions in consumers’ minds. In presenting a new environmentally responsible product on the
market, a company may wish to challenge trends by presenting it in neon-colored packaging,
avoiding green entirely. Though a feasible approach, the brand team must recognize that this
promotional idea may confuse consumers, who expect certain promotions to signal a specific
featureset or consumer need. Other times, benchmarking may reveal norms around particular
preferred marketing channels. For instance, sports brands typically have strong presences on
Instagram, post frequent videos, and advertise in sports-focused print media.
Benchmarking in Market Research

Benchmarking some factors within the 4Ps is challenging and often must be done through dedi-
cated market research. Just as with competitive and industry data, benchmarks that a company
137
wishes to gather may not exist is readily available from data brokerages, industry
analysts, media,
or other companies. In such cases, market research focusing on normative informati
on is essential.
We will learn more about market research in Chapter 1o.
Benchmarking by Channel
When it comes to marketing channels, companies measure performance in order to monitor the
effectiveness of their efforts. For effective monitoring, it's essential to know benchmarks of average
performance. Vendors across marketing channels provide benchmarking reports as part of their
own marketing, providing valuable data on average performance as free incentives to encourage
marketers to engage with their brands. As we learned, web traffic averages are readily available
from Google Analytics, the largest provider of web analytics software. Social media management
platforms sometimes publish reports on average metrics for different industries in social media.
This benchmark data is often integrated with channel management or analytics tools, allowing
marketers to generate reports that clearly show their own channel performance contrasted with
industry averages. Such benchmarked channel performance reporting is a powerful tool in verify-
ing marketing program success.
Other times, industry trade publications provide benchmarking. These reports are typically
researched and written by the publications’ reporters and research departments. Because they fall
under the heading of journalism, rather than vendor content marketing, such industry trade pub-
lication reports are sometimes more reliable or comprehensive, due to lack of bias toward any
one brand's products and services. Occasionally, academic researchers may benchmark an industry,
especially for novel or emerging activities in a sector. Such academic research is often overlooked
by marketers, yet it is often the only source of data on a specific activity. For example, marketing
faculty at the University of Southern California” researched the social media efforts of Califor-
nia wineries, discovering average numbers of followers for winery social media accounts, social
media management practices for vineyards, and other benchmark data not reported elsewhere.
Harvard University and Suffolk University researchers conducted extensive research on the email
marketing responses of sports fans, establishing the average conversion rates of baseball, hockey,
basketball, and football fans in New England. Though covering only a specific region, this report
offered norms that can inform the work of other sports marketers." These and similar reports are
often published in academic journals covering marketing, economics, and data science.
Given the fractured nature of benchmarking activities, finding benchmark reports presents
challenges. Web searches for “benchmarks” and a channel's name are often a marketer's first step.
Subscribing to vendor newsletters and trade publications also yields much data. In addition, mar-
keters should consider periodically reviewing academic literature to find unknown benchmark
reports they may find useful.
5.7 Do the Math: Conjoint Analysis

Earlier in this chapter, we met Shwoosh, our ski company conducting market research in order to
better position its new line of skis. Shwoosh discovered that casual skiers were looking for some
premium features in their skis, at a reasonable price. “There are some trade-offs here,” says Jamila
on
Frazer, chief ski engineer at Shwoosh, to CMO Michaela Sun. “Some features are easier to build
most to
a budget than others. Did the market research team find out which features matter the
features?
consumers? And how much more are they willing to pay for a ski with certain premium
Before my team starts designing the skis, it would be useful to know customer priorities.’
“We can find that out,” says Michaela. “It goes beyond what typical market research surveys
collect. It requires a specific data-collection method: conjoint analysis. Let's conduct one.”
oO
Conjoint analysis is a data-collection technique that determines the relative value of specific
features of a product or service to consumers. It enables complex measurement of consumer pref-
erence rankings, including features that perform better in preference tests when grouped together.
Conjoint analysis can take several forms:"
¢ Trade-off analysis: The most basic conjoint analysis, a trade-off consists of a series of ques-
tions asking consumers their preference for one feature against another. Unless a product has
only two important features, trade-off analysis can only reveal the relative value of one fea-
ture when considered in contrast with a single other feature. Since most products have several
important features, and moreover, the features work best in combination with other features,
such analyses are of limited utility. They are easy to conduct, however.
For instance, consumers may be asked whether they prefer a ski with a wood core, or a
wider ski. A ski can be made with both features; consumers are asked which is more impor-
tant. Forty-five percent choose a wood core as important, while 55% prefer wider skis. The
wider ski is considered the more desirable attribute, regardless of other attributes identified
in other trade-off analyses.
Discrete-choice conjoint analysis: With discrete-choice surveys, consumers are asked to rank
several hypothetical products, each with a different set of features. This provides data on what
feature sets (groups of related features) are most popular. Each complete feature set is ranked
by the percentage of consumers who selected it.
Max-Diff conjoint: In a Max-Diff analysis, consumers rank their most-desired feature set and
their least-preferred feature set. Through analysis of which sets gained the most top rankings,
researchers can identify the most often preferred product attributes, as well as determining
which ones are most often seen as best when paired.
Full conjoint: Though complex, a full conjoint analysis presents the richest data for product
positioning. Consumers rank all possible product attributes, typically as a relative value on a
scale, ranging from Definitely Would Buy to Definitely Would Not Buy, with options for lesser
approval, lesser disapproval, and neutral sentiment. For instance, a question may ask if con-
sumers would purchase skis with wood cores. Consumers can answer that they Definitely
Would Buy, Probably Would Buy, Would Likely Buy, Don't Know, Would Likely Not Buy, Proba-
bly Would Not Buy, or Definitely Would Not Buy. These responses are converted to numbers:
Definitely Would Not Buy is converted to -3, Definitely Would Buy becomes +3, with all other
options falling proportionately on the scale. Any number of attributes can be ranked using full
139
conjoint analysis; however, respondent fatigue is avoided if the number of features

is limited
to twenty or fewer.
Although, like market research, conjoint analysis can be done without regard to competitio
n,
it most often is used to determine a feature set distinct from other products on the market.
It also
benchmarks consumer preferences across an industry.
o .8 Conclusion
Analyzing the context in which an organization does business is a critical aspect of data collection
for marketers. Whether it's traditional competitive analysis or market research, benchmarking, or a
robust combination of all, this contextual data provides companies with critical information across
the 4Ps.
1. Creating a competitive analysis requires gathering primary and third-party data on multiple
aspects of a competitor's promotions, pricing, placement, and products. Competitive analyses
can focus on specific competitors, with a comprehensive view of all their activities, or focus on
different marketing activities, presenting an analysis of how different competitors engage the
activities.
. Competitive data can be sourced from private, cost-based databases. It can also be obtained
from public records. Primary competitive data is content created by competitors themselves.
. Market research, among its many applications, is a key methodology for assessing a company's
contextual landscape. This includes consumer attitudes, expectations, and product alterna-
tives.
. Data about the context in which a company operates, including its competition, must be con-
sidered when making strategy across all 4Ps. Many organizations leverage this data informally.
Systematic collection, analysis, and application of contextual data renders is more effective for
decision-making.
. Benchmarking allows organizations to set realistic goals, accurately assess the effectiveness of
marketing programs, and plan marketing programs. Benchmark data sources are fragmented,
requiring comprehensive research.
) .9 Questions for Further Study
1. List four traditional sources of competitive data.

2. What are the types of data on a competing company that you can obtain from a data broker?
3. Compare the benefits and drawbacks of using data brokers versus primary sources for com-
petitive research.
4. Which of the 4Ps is most closely impacted by the data available in patent filings? What spe-
cific information is found in patent filings?
5. Why are SEC filings an important source of data?
6. What are some of the limitations of relying on SEC filings for competitive analysis?
7. Which are better: traditional or digital competitive data sources? Or are they equally useful,
in your opinion?
What are some market research strategies that a brand can use to understand their com-
petitive landscape?
You're the marketing director for Floof, a new brand of sustainable pet furniture. You want to
understand how many competing brands are already in the market, their target markets, rev-
enue, and any interesting new products they may be currently developing. Outline how you
would research this competitive information. Include the sources you would use, how you
would interpret the data, and what recommendations you would make to your management
based on the different data collected.
10. Describe three ways you would use social media data to understand a company’s competi-
tion.
at Why is it important to use SEO data when doing a competitive analysis?
pee What are some ways to estimate how many visitors your competitors’ websites get monthly?
Why is this data important to know? How would you use this data if you were a marketing
manager for a new company that does not yet have web traffic of its own?
13. You just joined Beet, a new music magazine. You're the social media manager, and your first
job is to develop a strategy to help the brand stand out on social media. How would you use
social media data to understand the landscape of music media online? What data would you
examine? How can you turn that data into a strategy for your social media presence?
14. What is an analyst report?
15. Name three governmental and three non-governmental sources of data. Select a brand that
you admire. Using governmental and non-governmental sources, research the environment
in which it operates: How large is its industry? What are some of the major challenges and
opportunities in that industry? How is the industry expected to grow in the next ten years?
106; Why is it important to benchmark key metrics in an organization?
ie Describe two key uses of benchmarking in each of the 4Ps.
OR Why is it important to Know the average open rates, click-through rates, and other basic
metrics for a specific marketing channel? How can marketers use this data?
19; How does conjoint analysis help companies apply competitive data to product decisions?
20. Describe the different types of conjoint analysis. How would you use each one to understand
what product features would be most competitive in your market?
. Newberry, Christina. “How to Conduct a Competitive Analysis on Social

Media.” Social Media Marketing & Management Dashboard, November 3,
Endnotes 2020. https://blog.hootsuite.com/competitive-analysis-on-social-media.

. “7 Sources of Competitive Intelligence for Strategic Management.”
Netscribes, August 14, 2019. https://www.netscribes.conV/sources-of-
competitive-intelligence.
. “Gartner Magic Quadrant & Critical Capabilities—IT Research.” Gartner,
2021. https://www.gartner.comV/en/research/magic-quadrant-critical-
1. Winston, Joel. “Facebook and America's Largest Companies Quietly Give capabilities.
Worker Data to Equifax.” Fast Company, December 13, 2019.
. Thach, Liz, Terry Lease, and Marieska Barton. “Exploring the Impact
https://www.fastcompany.com/40485634/equifax-salary-data-and-the-
of Social Media Practices on Wine Sales in US Wineries.” Journal of
work-number-database,
Direct, Data and Digital Marketing Practice 17, no. 4 (2016): 272-83.
2. “7 Sources of Competitive Intelligence for Strategic Management.” https://doi.org/10.1057/dddmp.2016.5.
Netscribes, August 14, 2019. https://www.netscribes.com/sources-of-
- Wu, Jiexing, Kate J. Li, and Jun S. Liu. “Bayesian Inference for Assessing
competitive-intelligence.
Effects of Email Marketing Campaigns.” Journal of Business & Economic
3. Timberg, Craig, and Elizabeth Dwoskin. “How Merchants Use Facebook to Statistics 36, no. 2 (2018): 253-66. _https://doi.org/10.1080/
Flood Amazon with Fake Reviews.” The Washington Post, April 24, 2018. 07350015.2016.1141096.
https://www.washingtonpost.com/business/economy/how-merchants-
. “9 Common Types of Conjoint Analysis and How to Use Them.” Qualtrics,
secretly-use-facebook-to-flood-amazon-with-fake-reviews/2018/04/23/
July 16, 2020. https://www.qualtrics.com/experience-management/
5dad1e30-4392-1 1e8-8569-26fda6b404c7_story.html; Osborne, Charlie.
research/types-of-conjoint/.
“Data Leak Implicates over 200,000 People in Amazon Fake Product
Review Scam.” ZDNet, May 6, 2021. https://www.zdnet.com/article/data-
leak-implicates-over-200000-people-in-amazon-fake-product-review-
scam/,
CHAPTER 6
Measuring the Social Web
Learning Objectives

1. Apply basic social media metrics, such as likes, to an analysis of a brand’s social media
presence.
Articulate the limitations of basic metrics, and explain when they are appropriate to use.
Understand the use of audience demographic data in social media marketing programs.
. Create a plan to measure social media-driven conversions for a business.
oN
ak
. Describe the role of sentiment analysis in measuring social media success.
When was the last time you scrolled through your Instagram feed? Viewed a Snap? Checked out a
family member's story on Facebook? Messaged someone on WhatsApp? Was it this morning? This
past hour? Right now, as you read this book? We hope it wasn't in class—but maybe it was.
Since its inception two decades ago, social media has been a key way for people to connect
with each other and brands. Social media's greatest strength for many companies is the way in
which it facilitates two-way communication between consumers and brands. Marketers consider
these communications much more valuable in the era of inbound marketing than simple broad-
casts of brand messages. But what do we mean by the value of social media in terms of numbers,
such as sales and revenue growth? Measuring the ROI for social media was originally thought by
many businesses to be difficult. Social media marketing's goal is engagement, the impact of which
is less quantifiable in immediate sales. The myth that social media metrics are less revenue-focused
persists in some companies, while many others struggle to identify the full return on social media
investment, as they do with many communications channels where the goals are connections,
rather than sales.
In this chapter, we'll look at social media metrics that help marketers identify return on invest- sentiment analysis
ment (ROI), from growth in revenue to growth in a company’s reputation. More importantly, we'll The practice of analyzing
explore the connection between “soft” social metrics around engagement and revenue measure- consumer feelings about a
brand, often using artificial
ment. Finally, we will explore the world of sentiment analysis, an exciting field that's related to
intelligence.
artificial intelligence. This growing aspect of social media metrification shows that social metrics
have come full circle, from an emerging practice to a core skillset for many marketers.
6.1 Basic Metrics
Elijah Hanson, founder of Blazing Snowboards, was excited. “I just took some great shots of my
last competition on my phone,” he told his social media manager, Jerry Kenyatta. “I'm going to post
them to my Instagram story.”
“That's great!” said Jerry. “Remember to add some hashtags.”
“Do those really work?” asked Elijah.
“It depends on how you define ‘work,” said Jerry. “When we post using hashtags, we get a lot
more likes and comments than when we don't. Also, over time, we get more followers because we
get noticed more with all the likes and comments.’
“Do we get more sales, though?” asked Elijah. “I love Instagram but I never thought it really got
us any Sales.”
“That's exactly what I'm trying to find out with a new experiment,” noted Jerry. “We're posting
shoppable photos of our products every week. Not so much that it starts to make our profile too
sales-focused. We know our followers are snowboarding fans from analyzing their profiles, so we
want to give them what they signed up for in following us—great snowboarding shots. Still, a cou-
ple of times a week, I'm sharing an action photo of one of our influencers on the slopes, using one
of our boards. We're measuring the results to see whether it boosts sales without alienating our
fanbase.”
“That's a really good idea.” said Elijah. “I can imagine it's relatively easy to measure sales—you
just look at clicks, right? How are you measuring whether our fans start to get unhappy with the
sales approach, though? How can you measure attitudes on social media?”
Jerry explained to Elijah that measuring sales from social media, or indeed, most digital mar-
keting channels, was a bit more complicated than looking for clicks to a webpage. To measure
conversions, you need to use web analytics tools to see whether the initial click led to a purchase, or
conversion. Multitouch attribution is also critical: That first click may not have led to a sale, yet the
social media fan may have come back later to complete several purchases. Measuring social media's
overall contribution to sales is critical, using both attribution modeling and calculations such as
lift, which measures growth that coincides with a campaign, even when a direct 1:1 relationship
between channels and sales is hard to identify with conventional metrics. We will explore lift more
in Chapter 9. The bottom line is that measuring sales from social media is complex in the multi-
channel consumer world. And, as marketers know, clicks are only a small part of the measurement
story. Looking at a range of metrics helps fully identify the contribution social media makes to rev-
enues.
“Ok, got it,” said Elijah. “Now, what about measuring our followers’ attitudes toward us?”
Jerry shared the range of metrics he currently used to measure consumer sentiment: He
tracked net growth in followers; if follower counts dropped, he interpreted that as an indicator that
they were not enjoying the account's posts. He manually reviewed qualitative data, such as com-
ments, looking for positive sentiment, or attitudes, especially on the new sales posts. He tracked
aggregate numbers of likes, as well as likes per post, and compared the likes on snowboarding-
related posts to those that featured products for sale. Jerry admitted that it was a lot of work. He
was taking a coding course, learning a data science coding language called Python, in the hopes
of automating some of his analysis of qualitative data, such as the tone and attitude of comments
from fans. “Sentiment analysis is critical to us; we want to be sure our community continues to sup-
port us,” he said.
“Wow, you really are on top of this,” said Elijah. “Many times, social media management seems
like a lot of fun, but it's also very analytical.”
Jerry assured Elijah that the analysis is part of what made his job so rewarding. “Seeing our
followers happy with our posts, getting inspired, and buying from the brand—that means were cre-
ating real value.”
As we see in this example, social media marketers must take a wide range of metrics into
account when examining social media ROI. Traditional measures of marketing success, such as
sales, are critical. However, social media's contribution to sales often hinges on creating positive
sentiment, establishing brand values, and servicing customers effectively. It's also a creative
endeavor relying on media, such as video, with a long-term impact on brand awareness that cannot
be fully measured by short-term metrics such as immediate clicks. With such a complex landscape,
marketers must be wary of simple measures that can easily under- or overestimate the contribu-
tions of social media to the bottom line. Basic metrics typically used in the beginning of social
143
media endeavors, as outlined here, are often valuable. They all can point the way
toward measur-
ing social media ROI. However, as with all basic metrics, they must be
used with caution, as they
present a limited view when used alone. Taken together, in conjunction with the more
advanced
metrics outlined in this chapter's later sections, they create a useful baseline for understanding
a
brand's social media presence.
Audience Size: Followers and Likes
The primary metric of initial interest for many companies is the size of their social media audience.
audience
Different platforms use different terms for audience metrics: Facebook uses the terms “likes,” for
instance, for those who have opted to follow a Facebook page for updates, while Twitter uses the The viewers actively
consuming a profile’s
term “followers.” One can imagine other social media platforms in the future utilizing other terms. social media content.
The specific name is less important than understanding that aggregate audience numbers reflect
only a brand's relative success in attracting an audience to a specific platform. The quantity of likes engagement
or followers does not provide direct evidence of the quality or efficacy of a social media feed. Let's Those metrics that indicate
take two candy brands, for instance: A large global brand such as Reese's may have millions of fol- how interested fans are in
a firm’s messages on
lowers, while a local fair-trade chocolatier may have only 10k-20k. However, consumers often follow social media.
large brands with less commitment to the brand itself than they feel toward a local or niche vendor.
The millions of followers of the large brand may only engage when they are looking for special
offers or may follow common products by default when first setting up their own social media pro-
files. This is especially the case for platforms such as Twitter that recommend certain accounts as
initial feeds to follow to all new users. A niche brand's fans, by contrast, may have a strong relation-
ship with the brand, engaging in a wider variety of ways. They may post selfies with the product,
make new product recommendations, or share tips with other fans. This is not to say that large
brands cannot also achieve strong engagement; it's simply that aggregate audience on social media
measures only the size of the audience, and small audiences can be as beneficial to a brand's sales,
top-of-mind awareness, and revenue growth as large audiences are.
The best use of audience size metrics are as measures of more salient key performance indica-
tors (KPIs):
- Audience growth can be an indirect measure of the success of other marketing campaigns,
including traditional media that includes a call to follow a brand on social channels.
Audience decline can be an early indicator of negative consumer sentiment, especially if it fol-
lows in the wake of negative publicity, a product recall, a pricing change, or other challenges. It
can also indicate that content on the social media channel is poorly received.
« Comparative audience size in contrast to industry peers can indicate market opportunities.
When a brand has far fewer followers than comparable brands, that can indicate an opportu-
nity to increase brand awareness and ultimately market share.
« Stagnating audience size can indicate that a firm's overall marketing efforts can be improved.
Generally, strong offline and online marketing will lead to gradual social media audience
growth of 5% monthly on channels that are experiencing overall member growth.
Let's go back to our artisan chocolate company as an example. One day, they look at their audi-
ence metrics, finding that they have 12,800 likes on Facebook, 8,000 Instagram followers, and 600
connections on WhatsApp. Looking at a nearby retailer with similar product lines, started at the
same time, however, they find this competitor has 50,000 Facebook likes and over 100,000 Instagram
followers, but no connections on WhatsApp. Digging deeper, they find that most of their competi-
tion’s Instagram followers are outside their region; the company has invested heavily in promoting
its e-commerce rather than relying on farmer's markets for distribution. Though strong concern
do not
over having fewer Instagram followers overall would be out of place, as aggregate followers
indicate market share, the differing follower metrics for the two brands indicate deep differences
missed
in go-to-market strategies. The rival brand's online distribution channels mean a potential
opportunity for our chocolate company. Based on the improved reach e-commerce provides the
competition, our artisan chocolate company may also need to invest in more varied distribution
channels to meet the competitive challenge. That might mean taking the other brand head-on with
online sales or securing distribution channels where its rival is absent, such as mass-market retail.
Looking at social media audience, though of limited value when treated as a so-called popularity
contest, can provide data on other firms’ distribution strategies.
Marketers need to put online audience size into perspective, especially when communicating
the value of social media to internal stakeholders. Taken on its own, audience size can be a vanity
metric. When examined strategically, in conjunction with other data, it can provide valuable insight
for online and offline efforts across the 4Ps.
The Ultimate Guide to Your Instagram Engagement Rate
https://www.socialmediacollege.com/blog/your-instagram-engagement-rate/
Engagement
More important to measuring the ROI of social media are measures of engagement on those
channels. Engagement metrics are those metrics that indicate how interested fans are in a firm's
messages on social media. Together, these metrics are in themselves valuable to social media man-
agers. They can indicate that social media efforts are effective in creating interest in a brand.
However, as with audience size metrics, even engagement metrics merit caution. Viral content, such
as games, can garner high engagement volume without commensurate impact on revenues. Just
because a post is attracting engagement, it may not follow that the same post will drive revenue.
Nonetheless, engagement can be a leading indicator of brand growth. An audience that is engaged
with content on social media is often more likely to purchase or recommend products. Engaged
Chapter 6 Measuring the Social Web 145
audiences can also provide valuable qualitative data on product features, pricing, and distribution
channels, if leveraged properly. It is up to companies to produce social media content that not only
engages consumers, but also encourages sales or provides usable input for strategy for products,
pricing, and placement.
When it comes to measuring the effectiveness of social media content for creating brand
presence on social media channels, engagement metrics are often the standard. Both aggregate
numbers and trends of the metrics over time are reliable measures of how effectively a brand cre-
ates social media feeds consumers find relevant.
Post Likes and Reactions
As the name indicates, likes are the metric of how many users indicated a “like” reaction to a post.
On Facebook, reactions can range from highly positive to highly negative, while on other channels,
only a single reaction is possible.
Clicks
Measuring clicks on social media posts is important because it indicates consumer interest in
engaging further with a brand or topic. As with many broad metrics, the aggregate definition of a
click simplifies a wider, more complex range of content engagements. Clicks on conversion-focused
posts are prized; however, often consumers are more inclined to visit a site for inbound content,
such as ebooks or blog posts. Thus, a click may be the first step in a short conversion funnel, as with
clicks on a sales promotion post, or a lengthy conversion path that starts with content consump-
tion. A social media click may not be part of a conversion funnel at all. Many brands curate content
from other content producers, i.e. they share articles, videos, and other links from media sources
and other brands. Clicks, therefore, may not lead social media followers to a brand's own website
and thus not represent prospective conversions.
FIGURE 6.1 Measuring Clicks
eo
Clicks on a sales
promotion post
y
es ¥ Y
ee wR:Vv
Conversion
Conversion
These clicks do, however, measure consumer interest in specific topics. Thus, they provide valu-
able insight into consumer attitudes, product needs, or industry trends.
When measuring clicks, marketers do well to segment click data by the type of click indicated:
immediate ¢ Immediate Conversion: A click on promotional social media content with a clear call to action
conversion to purchase.
A click on promotional First-touch: A click driving traffic to a brand's website, without a sales-focused call to action.
social media content with
a clear call to action to
For companies following an inbound strategy, first-touch clicks will comprise the majority of
purchase. social media click-generated traffic.
Curated-content: Segmented by topic, curated content clicks measure consumer interest in
first-touch
specific aspects of a brand. For instance, a snowboard company may curate posts from a popu-
A consumer’s first lar snowboarding magazine with advanced techniques, a YouTube channel with beginner's
engagement with a brand.
guides to snowboarding, and fashion tips for snowboarders. The aggregate number of clicks on
curated-content each type of curated content tells volumes on what consumers of the brand value. If the major-
ity of clicks are on advanced how-to articles, with a lesser interest in fashion, that indicates
Content from other profiles
or creators that a brand or that most of a brand's engaged fans consider themselves non-beginners. This can have strong
individual shares on their implications for a brand's own content creation, favoring the creation of more advanced mate-
own profiles. rials. It should also influence product research: If the snowboard company’s consumers are
mostly semi-professional, for instance, competition-friendly boards may sell more briskly than
beginner offerings. While no brand should redesign their product line based on social media
clicks, click data segmented by topic can provide insight into consumer priorities. Those
insights can be further explored through other marketing measurement tools, such as focus
groups, survey data, and sales reports.
147
FIGURE 6.2 Measuring the Impact of Social Media
Immediate
Conversion
First-Touch Curated Content
ee eS ae ee ere
ine *Drives traffic to * Measures consumer

brand’s website _ interest in specific
aspects of brand _
Comments
Comments can represent the strongest form of engagement. It takes time to comment on a social
media post, on channels that allow comments, and thus comments indicate relatively strong fan
interest. Again, analyzing the data in context, using a range of factors, is important. Content senti-
ment is as important as volume. A small number of positive comments is generally more desirable
than a large number of neutral ones.
Aggregate comment volume indicates interest. Paired with sentiment analysis, it can indicate aggregate comment
the strength of negative or positive interest. Typically, posts that attract a higher volume of com- volume
ments than a profiles typical post are more likely to attract comments with strong positive or The total volume of
negative sentiment tendencies, rather than comments neutral in tone. comments on a social
media profile’s posts.
It's important to pair comment volume metrics with sentiment analysis whenever possible. On
its Own, comment volume data can measure the scope of social media engagement, but not
whether it is beneficial to a brand. It can indicate volume KPIs:
¢ Overall volume of interest in a social media profile, when paired with follower growth metrics
and aggregate engagement metrics
¢ Comparative interest in one post or a set of posts in contrast to others
« Average daily, weekly, and monthly engaged visitors to a profile
e Net volume of conversation about a brand on the brand’s own channels, when combined with
conversation metrics from all channels on which conversations exist
Comment metrics are a valuable part of calculating a brand's net reach on social media. We will
learn more about the most critical way to use comment data for growth, sentiment analysis, later
in this chapter.
Shares
Unlike comment volume, share volume data implies sentiment in many contexts. Unless a post is share
highly controversial, or a brand is the target of a concerted online attack, many shares of online The action in which a
content imply an endorsement on the part of the sharer. Jonah Berger, in a study of the types of social media users take a
content from news sources that social media users most often share, found that content that is post from another profile
and re-posts it to their
informative, entertaining or helpful is shared most often.” profile.
Shares are also important because they impact another critical social media metric: reach. Sim-
ply stated, the more shares of a brand's content, the greater its reach and hence the brand's reach.
Nonetheless, sentiment analysis of posts containing a brand's shared content is useful. Many
shares may be neutral in tone for a factual content item, while more entertaining content may
attract both positive and negative sentiment. When measuring shares and sentiment, it's critical to
assess the import of both metrics against the goals of any social media campaign. A brand-build-
ing campaign for a consumer goods company will typically aim for highly positive sentiment, wide
reach, and high conversions to sales. A lead generation campaign for a B2B company, built around
thought leadership content, will likely aim for conversion to leads, with lesser expectations of pos-
itive sentiment; instead, the factual nature of the lead-generation content will engender a more
neutral tone. Marketers would not expect LinkedIn shares of a whitepaper on predictive analytics
to contain the same excited language as shares of a fashionable new sneaker among sneakerheads
on Twitter.
Profile and Page Views

Just as with a website, marketers can measure the traffic to a social media profile. Different plat-
forms give this traffic metric different names; the name also changes even for the same platform
at times. On Instagram and Twitter, measures of visits to a brand's profile are called profile views.
Facebook and LinkedIn, which refer to a brand's presence on their platforms as a page, call this met-
ric page views. Though many marketers may view this data as a vanity metric, as trending data,
it provides useful insights. Watching whether page views are trending up or down can measure
the overall social media share of voice; correlated with offline activities, it can also measure the
impact of brand awareness campaigns on a brand's overall web traffic. Some argue that in the age
of owned, earned, and paid media, it's impossible to measure “web traffic” solely by measuring vis-
its to a brand's own website. Instead, adding social media profile views to website visits provides
a more accurate measure of the overall traffic to a brand's owned media. If social media is a core
aspect of a brand’s online footprint, it may make sense to measure total web traffic, including social
media views, as a more accurate metric of how many visitors are engaging with a brand's online
properties.
dayparting Some additional page view data can provide further insight. For instance, Facebook provides
The practice of limiting data, as of this writing, on times of day when a page's fans are most often online. This can provide
when an online ad is valuable guidance when dayparting social media advertising. Dayparting, the practice of limiting
shown to only specific
when an online ad is shown to only specific times of day, can save a company significant wasted ad
times of day.
expenditure. Knowing the ideal time of day to target ads on a given platform can be useful. How-
ever, the dayparting data provided by Facebook to page administrators is limited only to Facebook
users who already like a page. If a brand wishes to target consumers who are dissimilar to their
current fans, this data is of lesser utility. Overall, the basic data provided on page viewers points to
possible insights that should be further explored with survey data, data gathered through paid
advertising, focus groups, and other data-collection methods. As a standalone metric, it can indicate
basic information about the popularity and audience for a page. Changes in trends over time, such
as growth in male versus female page fans, for instance, can be noted if important to a brand.
Mentions
mentions
Mentions are a straightforward metric. They are a measure, across all channels, of the number of
times a brand has been tagged in a post. They measure the volume of social media posts that
Tagging or mentioning
another social media directly tag a brand, using the mechanisms available on each platform. For instance, mentions on
account in a social media Twitter measure the number of times a brand has been tagged using its handle with the “@"
post. included. On Instagram, it's a measure of the number of times the account has been tagged ina
post or comment.
149
What Are Social Mentions and How to Track Them
https://blog.hootsuite.com/social-mentions/
The challenge with mentions is clear: Not everyone who mentions a brand in their
posts will
tag the brand properly. User error, including not being familiar with how to tag a brand social listening
or mis-
spellings of account handles, is common. Thus, the mentions metric only captures a percentage of The practice of monitoring
social media to gather
times that a brand is addressed directly or discussed on social media. Some mentions that are miss-
data.
ing from formal mention counts can be recovered using other data tools. Monitoring a platform's
mentions data should never be used as the sole means to identify users attempting to engage with
a brand or measure the total volume of discussion directly related to a brand. Social listening tools,
applications that monitor social media for mentions of specific brands, are a critical addendum to
understand the full volume of true mentions of a brand, including nontagged content and mis-
spellings of brand handles.” Using social listening tools, in addition to the mentions tool for each
platform, also ensures that more consumers who attempt to contact a brand are identified in time
to engage with those consumers.
Because of its limited accuracy, mentions data should be used with caution. The mentions fea-
ture in most social media platforms and management tools is most useful to monitor messages; it
is not, on its own, a reliable source of actionable data.
Follower Demographics
In addition to measuring the number of visits to a page/profile, platforms typically also provide
demographic information on visitors. Such data includes visitors’ age range, geolocation, gender,
and other basic information. Some platforms also include valuable psychographic information.
LinkedIn, for example, allows company page administrators to see the most popular job titles
among members who follow the company page. Overall, as of this writing, demographic and psy-
chographic data available to page administrators on social media platforms is limited. It is most
valuable if a company’s targeting strategy is based on basic demographics, such as age and gender.
Let's take the example of a new leggings brand, Leggingslux. The brand is targeted exclusively
toward consumers who identity as female or femme, with the ideal consumer living in a bike-
friendly city or town. Phoebe Garmin, marketing manager of Leggingslux, uses demographic data
on the brand's consumers to identify a group who seem to be spending the most on Leggingslux
fashions: women over age 21 who live more than a mile from the nearest subway stop. Focus group
and survey data confirms that working women are buying Leggingslux to wear to work and on
their commutes, especially the brand's fleece-lined collection in colors that are work-appropriate,
such as gray. Looking at the demographic data on the brand's Facebook likes, she finds that con-
sumers in this age, gender, and geographic segment are underrepresented among page followers.
Instead, she finds that most of their Facebook page followers are either in college, don't have long
commutes, or live in the suburbs, where they are likely to commute by car. Thus, they are not
reaching their ideal demographic segments on Facebook. First, Phoebe creates a paid campaign to
promote the page to the desired demographic segments. Next, she analyzes demographics on the
brand's other social media channels, finding that Leggingslux is connecting with their target mar-
ket on Twitter and Pinterest. She starts posting more often to those channels. Eventually, thanks
to the targeted effort to connect with the target demographics, the Facebook audience starts to
resemble more closely the most profitable demographic. By the end of the quarter, sales attributed
to social media have increased by 23%—all thanks to better demographic data analysis. When the
audience for a brand is determined by location, age, gender, income, or other basic demographic fac-
tors, then demographic data is very valuable if used strategically.
6.2 A Closer Look: Post or Profile

Metrics?
When marketers first start to measure social media, they often have questions about what is more
important to measure: metrics on individual posts, or metrics assessing a profile’s performance as a
whole. Should we measure post metrics, because they provide us with data supportive of product
development, content marketing, and further social media efforts? Or should we measure profile
metrics to gain an understanding of our overall brand reputation, audience demographics, and
market share indicators? The answer is that both types of data are important, of course. Where a
marketing team should focus the bulk of their efforts depends on where they need more informa-
tion.
When we measure post metrics, we get a sense of strategic information:
¢ What topics interest our stakeholders
¢ Which products are most attractive to different demographics
How our consumers feel about specific aspects of our brand, product line, or industry trend
What content topics gain the most traffic from target demographics
When we measure profile metrics, we get a sense of broad information:
How popular our brand is with our target markets
When our target markets are most often online, especially on social media channels
Where our customers who use social media are geolocated
How much of online conversation relates to our brand—how visible we are to social media
users
Although it's tempting to think of post metrics as providing tactical information and profile
metrics as a source of strategic information, both types of data are both strategic and tactical. The
key for any marketing team is to measure all relevant metrics, while making the right data available
to each team member to make decisions in their areas of responsibility. The large amount of data
available about social media makes it tempting to gather limited data. As we will learn in the chap-
ter on data visualization, creating different data presentations known as dashboards can make it
easier to sort through data to find needed information. In social media monitoring tools, post and
profile data can be viewed separately or together, making it easier to see data relationships while
also being able to focus on specific information needed.
Essential Social Media Metrics
https://neilpatel.com/blog/essential-social-media-metrics/
6.3 Social Listening

As we have learned, basic social media metrics are useful, but they have their limitations. Mentions
data only captures comments from those users who tag a brand correctly, leaving out those who
mistyped our brand handles, or experience a technical error. Shares and comments tell us some-
thing about how engaged our audiences are, but they don't tell us how positively they feel about
151
our brands. For these reasons, marketers rely on more than just basic social media
monitoring met-
rics.
One key piece of a more sophisticated social media analytics stack is a social listening tool.
Although they vary in features, social listening tools typically provide marketers with both factual
and interpretive data. Factual data consists of data on basic activities and functions of a digital
marketing channel. Social listening tools provide such factual data as the following:
> The number of mentions of a brand, even if the brand was not properly tagged according to
the mechanisms provided by a social media channel
¢ The content of brand mentions
« The number of mentions of competitors
¢ The popularity of specific hashtags important to a brand
FIGURE 6.3 Factual Data Available from Social Listening Activities
Number of mentions
o
oO
@)
ae Content of brand
es mentions
Sz
a2
eee Number of mentions
of of competitors
©
@)
w~
Popularity of
specific hashtags
In addition, social listening tools also provide interpretive data: data, which provides marketers
with strategic direction. Such interpretive data available from social listening tools can include the
following:
« Reach: the total possible audience for a social media post or account reach
The total possible
- Sentiment: the tone of social media posts about and addressed to a brand, typically measured audience for a social
on a scale from negative to positive media post or account.
- Most engaged followers: a list of the followers who showed highest engagement with a brand
sentiment
over a given period
key seg- The tone of social media
- Audience analysis: a profile of typical followers, most engaged followers, or other posts about and
ments of followers addressed to a brand,
typically measured on a
scale from negative to
positive.
FIGURE 6.4 Interpretive Data Available from Social Listening Activities
Nn
Ow
2%
Oo)O
Sentiment
£ oOo
c 2
®oO _
25
—_
~”
He Most engaged
& followers
Oo
Ce:
&
Y)
Audience analysis
This data is interpretive for a variety of reasons. It provides marketers with more than the
simplest facts about their social media results; instead, it provides insight into paths to reaching
desirable demographics, critical gaps in a social media presence, and opportunities to grow a brand
on social media. By showing marketers who their most engaged followers are, for example, social
listening tools help marketers determine whether the audience(s) they reach on a social channel
align with their most profitable market segments."
Most social listening tool metrics are at least somewhat proprietary. That is, the way in which
one tool measures a brand's most engaged followers can vary, depending on the weight it attributes
to comments in contrast to likes or shares, or if it weights different types of engagement at all. In
this way, while tools allow marketers greater power to interpret their social media results by provid-
ing more comprehensive metrics, the tools apply some interpretation to data in the ways in which
they calculate their metrics. A marketer using a social listening tool may or may not agree with the
specific factors that make up the tool's algorithms. Or the marketers may not be informed of pre-
cisely how a metric is calculated, depending on the tool. As with much in marketing analytics, some
uncertainty is inevitable. Nonetheless, social listening remains a critical aspect of most marketers’
data toolkits.
In addition to measuring the impact of social media marketing, social listening is critical to
another key function of social media data collection: enabling better execution on channel mar-
keting efforts. Social media is a real-time platform; consumers messaging a brand on social media,
whether their posts are inquiries or comments, expect immediate responses. While, for some mar-
keting channels, metrics are part of an asynchronous effort to optimize future programs, for social
media managers, data is critical to effective daily operations. Often, when news about a brand is
breaking online, round-the-clock monitoring is needed to provide an effective response to con-
sumer interest and concerns.
153
6.4 Paid Social Media Metrics
Across the web, marketers spend more than $50 billion advertising on social media channels“ such
as Facebook, Instagram, and LinkedIn. In addition to standalone ads, many brands “boost” or
“pro-
mote” their organic postings, paying to show these posts either to a higher percentage of their own
fans or to a new audience. Research has shown that, on average, 5.5% of consumers see the Face-
book posts of brands whose pages they followed.® In addition, social media growth often entails
undertaking a paid campaign to win followers, reach more consumers, or reinforce a brand. Paid
elements are vital to many brands social media efforts, and they have their own unique metrics. In
this section, welll take a look at those metrics with what they can tell us about the success of those
campaigns that include paid exposure on social platforms.
Quality Score/Quality Ranking

Many social media platforms measure the overall quality of the experience offered by an ad. This
metric helps the advertising platform determine whether an ad is relevant to those targeted by a
brand as well as whether the brand is providing a quality experience for users with their landing
pages or other creative that supports the ad, such as their video channel. Social media platforms
use these rankings in a manner similar to Google's Quality Score. Recall that Quality Score is
Googles proprietary algorithm that automatically and continuously measures the relevance of an
entire ad and its allied creative to consumers. Google uses this data to determine what ads to show,
what to charge the advertiser, and to optimize the user experience.
These quality metrics have different names on the different platforms that use them. Facebook
uses Quality Ranking. It measures the consumer's overall experience with an ad, starting with
the relevance of its targeting to the consumer's experience with the brand's creative after clicking
on the ad. Twitter uses Ad Score, which, according to the platform's own materials, measures an
ad's “resonance, relevance, and recency.” This latter measures how recently a promoted tweet was
posted. Newer tweets rank higher in ad score, even when they are equal in relevance to an older ad.
Achieving a high quality rating means that an ad is more likely to be shown to consumers. It can
also mean a greater likelihood that the ad will convert.
If marketers find their quality metrics on social media advertising are low, it can mean that the
audience they target with the ads needs to be adjusted. They can look at the response rate from
different audiences, targeting only those with the highest response rates to an ad. Removing those
audiences with whom the ad did less well will increase the quality rating. They can also look at the
ad creative, including images and ad copy, to ensure that their target audience finds it interesting.
They should also look beyond the ad to the ad's landing page, ensuring that it contains content
closely related to the ad. Given the complexity of diagnosing quality rating scores, brands often
utilize A/B or multivariate testing to gather additional data on the performance of a low-quality
ad. This can help identify areas to improve creative or optimize targeting. They can also use focus
groups to test ads or analytics from other platforms, such as email data, to identify appropriate
messaging. At its core, quality rankings are an indicator that an entire campaign needs further opti-
mization of its targeting, creative, or timing. A low quality ranking is a data point that typically
indicates the need for further data collection.
Engagements and Actions
When brands create ads on social media, a direct conversion, such as an immediate sale, is a stretch
goal. Much more common are micro-conversions, such as opt-ins to an email list. Indeed, even
micro-conversions occur less often on social media than on other channels, such as email or search.
Thus, measuring the success of a social media campaign often means measuring engagement. Dif-
ferent platforms use different terms for actions consumers take to indicate some level of interest in
an ad. These terms also change periodically. Twitter defines such actions as engagements; Facebook,
as of this writing, calls them both engagements and actions, depending on the specific behavior.
Facebook ads provide for an extensive range of consumer behaviors, each of which can be mea-
sured, including visits to a brick-and-mortar store, app downloads for a promoted app, views or
partial views of videos, and new messaging connections. Most platforms offer extensive data on the
actions consumers take once they decide to respond.
Conversions
While conversions from social media are rarer than on some other platforms, they do happen.
Social media platforms directly track conversions from ads. This includes all types of conversions,
whether they are e-commerce transactions, lead form completions, or other types of behaviors.
assisted conversion One common challenge for marketers tracking social media conversions is that the data pro-
Conversions that invoive vided by the platforms does not always match conversion data from other sources, such as Google
engaging a consumer on Analytics. This can be because social media platforms often cannot gather all data about a conver-
multiple marketing sion, such as the role other channels may have played in an assisted conversion. Assisted
channels, such as email
and social media, before a conversions are those that involve engaging a consumer on multiple marketing channels, such as
conversion occurs. email and social media, before a conversion occurs. Those channels that played a role in the conver-
sion without being the primary channel that drove it are said to have assisted the conversion.
Because social media platform metrics focus on actions centered on just that platform, they can
often miss the full picture of more complex conversions.” Other reasons for data mismatch can
include improper installation of social media ad tracking code, different terminology used for con-
version actions across platforms, and different models of how they measure attribution, such as
having a social media account configured to a different time zone than a brand's Google Analytics.”
Since small discrepancies in conversion data are common, marketers often rely on the conver-
sion data in their web analytics platform rather than that found in their social media platform
ad manager. It’s important for analytics to maintain consistency so that data is reliable. Thus, pre-
ferring analytics data for tracking social media conversions is reasonable. The reason to look at
conversion data in a brand's social media ad manager is to look for severe discrepancies, which can
indicate problems with underlying tracking codes, as well as to provide a quick glimpse into con-
version data conveniently inside the ad management platform.
When it comes to tracking conversions, social media ad management tools excel at tracking
simpler, more straightforward ones, such as an e-commerce transaction or filling out of a lead form.
More complex conversion proxies, such as time spent on a page, are harder to track. When the
conversion is a simple one, conversion data inside the social media ad platform provides a quick,
informal measure of a conversion ad's performance.
User Actions: Likes, Shares, Swipeups, and Retweets
Any ad on social media can inspire engagements that are the same as those that would occur with
an organic post. For instance, consumers may swipe up on a Snapchat ad just as they would on
an organic snap, like or comment on a boosted Facebook post normally, as they would for one that
155
is not boosted, or retweet a Twitter ad. Most social media ad management platforms
track these
actions for paid messages in the ad manager. In many cases, they provide additional
data on these
normal user actions when they take place with a paid ad. The data may include details
on the
time of day for each action, user demographics or psychographics, and conversion rates associated
with these actions. In addition, they provide detailed data on users for business account owners
who advertise on the platform. The precise data provided varies by platform, though most provide
demographic, geographic, and interests data. Each platform is also continuously evolving the data
they provide. Privacy laws change what data can be collected, while, in contrast, more powerful
tools allow for more precise tracking of audience interests. Thus, marketers need to update their
knowledge of the audience data provided by their preferred platforms continuously. As of this writ-
ing, social media ad platforms provide rich insight into the types of consumers who respond to a
brand's ads while protecting the privacy of individual users by making the disclosure of personally
identifiable information, such as names, opt in:
+ Facebook and Instagram provide detailed data on consumers who engage with an ad, including
ages, locations, and genders.
+ Snapchat, in its Business Center, provides basic demographics such as age and gender, as well
as household income levels, interests, and other more targeted metrics.
+ LinkedIn provides job titles, industry, and demographics such age for ad respondents.
6.5 Advanced Social Media Metrics
We've now learned about some of the fundamental metrics for paid and organic social media posts.
In this section, welll examine some of the most important advanced metrics, ones that take some
more time to measure but pay off in a deeper understanding of the efficacy of social media cam-
paigns across both organic and paid efforts.
Reach, Unique Reach, and Frequency
Reach is the measure of how many social media users may have seen a message. Like impressions, it
measures only how many people may have seen content, not whether users understood, paid atten-
tion to, or engaged with that content. It is important in measuring both organic and paid social
promotions.
Reach is useful for understanding the impact of social media campaigns on a brand's aware-
ness, measuring the audience for a message, and as part of calculating the conversions from social
media campaigns. Reach is available as a metric for both paid and organic social media content.
Paid reach measures the number of users who saw a paid post. Typically, they were reached by
selecting a specific audience, such as those interested in a given topic, fans of a brand, or consumers
within a demographic. The reach number, reported as an absolute number, is tracked within a
platform's advertising portal. Paid reach can be increased by selecting a wider audience, as well as
spending more on social ads, including promoted posts.
Organic reach includes all of the individual users on a social media channel who saw a post;
brand's
it includes a brand's followers on a channel, as well as the followers of users who share a
ion T-shirt company, FunkyTees. One
content. For instance, imagine you run an organic, limited-edit
Facebook page, and Twit-
morning, you post a photo of your new design to your Instagram account,
reached
ter account. You also post a TikTok of yourself in the shirt, talking about the design. You
* 15,000 Instagram followers,
* 200 people on your Facebook page,

* 100,000 Twitter followers, and
e 8,000 users on TikTok.
Your reach for your posts would be the total of your reach on all channels on which you posted
about the new T-shirt: 15,000 + 200 + 100,000 + 8,000 = 123,200. That is a lot of users who now know
about your newest design. However, later on the same day you made your post, something exciting
happens with your posts: a fashion blogger, May Moon, with over three million followers, shares
your original Instagram post. Further, Jane Gomez, the editor at a leading skater fashion magazine
retweets your tweet to their following of four million skaters. Now, your reach has increased by all
the followers of those influencers who saw their posts—that is, by seven million. Now, your reach is
7,123,200—or is it? You have many followers in common with May Moon. You have fewer followers in
common with Jane Gomez, but you do have a few. You also don't know how many of those follow-
ers saw each post—a post does not reach everyone who follows a user. You can calculate estimated
reach, however. Typically, a post is seen by 2% to 5% of an account's followers." Thus, for every mil-
lion followers an account has, 20,000 to 50,000 will see a given post.
You also have fans who follow you on all of your social media channels. If you are calculating
organic reach manually, those users are counted several times, once for each channel and user
they follow. For this reason, many brands don't use reach as a metric, especially if they receive
many shares from users with whom they share many common followers. A more accurate metric is
unique reach. Well-designed social media tools deduplicate reach, counting each follower only once.
Some duplicates may still be counted in unique reach; someone may follow an account across many
channels, and their accounts on different channels may not have trackable relationships to each
other or be traceable to the same individuals. For this reason, marketers are careful to report reach
on each social media channel separately, i.e, Twitter reach or Facebook reach. When total reach
across several social media channels is presented, it is best to assume that duplicates are included.
It's also vital not to calculate total reach manually by adding one's own followers and then those of
all users who shared one's content. If this manual method is the only one available, reach is a less
reliable metric.
Reach is typically a lower number than impressions. Remember that impressions measure
views of your content. Some people may view your Snap more than once, or read your tweet a few
times. Impressions divided by unique reach will give you the number of times a given user likely
viewed your content, or your frequency. For instance, let's say your next T-shirt design post has a
unique reach of two million users. It garners four million impressions. This means that each unique
user saw your post twice. Together, reach, unique reach, and frequency give marketers information
on the overall scope of a message's exposure. Knowing this data can help measure how many con-
sumers may be aware of a brand.
Taking these metrics a step further, we can calculate our social media click-through rate (CTR).
Remember, CTR is the percentage of people who received a message who clicked on the message.
We can divide clicks by unique reach to calculate the CTR of our organic social media posts. For
example, if your T-shirt post had two million in unique reach, that means that two million people
saw the post at least once. Of those, if 100,000 clicked on the post to buy, then the CTR is 100,000 /
2,000,000 = 0.05 = 5%. That is a high CTR from social media.” The post was very effective in driving
interested consumers to FunkyTees’ e-commerce site.
Share of Voice
Share of voice (SOV) is similar to reach in that it measures the overall volume of conversation
share of voice (SOV)
about a brand online. Unlike reach, however, SOV is a comparative metric: It measures the total vol-
The percentage of total
online conversations that ume of conversation on a channel about a general industry, product type, or concept. From that
center on a brand. total, it details the percentage of those conversations that center on a brand.
Chapter 6 Measuring the Social Web 157
Let's take the example of a trendy new smartwatch. It’s a direct competitor to major brands
such as the Apple Watch. It targets women consumers, providing fitness trackers geared toward
womens goals. The brand is a specialized product, yet it wants to gain widespread buzz. The social
media team behind the watch uses a social listening tool to determine that each month, users post
over one million posts about smartwatches, fitness trackers, and wearable devices. Of these, they
decide to focus on the two most specific topics, smartwatches and fitness trackers. These topics gar-
ner the majority of those posts, at 750,000 posts a month. Their goal is to appear in 10% of these
posts; that is, to obtain a 10% share of voice. To be accurately calculated, share of voice specifically
excludes a brand's own posts about itself. Otherwise, brands would simply share large numbers of
posts about themselves in an effort to increase SOV, which would drive away followers, who would
consider such extreme posting to be spam.
When calculating SOV, the first step is to determine what conversations make sense to track.
As we see in the women's smartwatch example, the brand could have chosen to track a very broad
range of conversations: not just posts about smartwatches and fitness trackers, but all posts about
wearables. They decided not to, because they only compete in the smartwatch and fitness cat-
egories. They could even further narrow the conversations tracked to only those about fitness
trackers.
The size of conversations tracked has a significant impact on SOV numbers. For example, if a
fast-casual vegetarian restaurant brand opts to track all conversations about “hamburgers,” they
may be tracking millions of daily conversations of which mentions of their brand are a very small
percentage. On the other hand, if they track total daily conversations about “vegetarian burgers,”
the conversation is smaller and their SOV will consequently be larger. Defining conversation should
be realistic yet not so broad as to include potentially irrelevant data.
6.6 Growth and Conversion Metrics
We've learned about some of the first metrics that many marketers use when they evaluate their
social media efforts. Many are useful, providing valuable insights for optimizing marketing efforts.
As social media metrics programs become more sophisticated, marketers typically look to addi-
tional metrics that help them further refine their channel strategies. In this section, we will look at
metrics that measure conversions influenced by social media and metrics of brand growth.
FIGURE 6.5 Key Social Media Metrics
Growth
¢ Look at % by which followers are growing rather

than followers at a given time.
Most Popular Posts
e See which topics your audience likes best

e Use weighted measures to compare engagement
Impressions
¢ How many times your post was seen
Conversions
e Includes direct and assisted

e Web analytics platforms
Growth
As we learned in the previous section, many basic metrics are most valuable when examined for
trends over time. Numbers of followers, shares, and other data are most useful for decision-mak-
ing when we look at whether they are trending up or down. As absolute numbers, they only give
us partial information. As companies mature in their analytics, they come to understand that it's
growth that counts: how robustly channels are growing, how many target customers are reached.
Reporting followers, likes, shares, mentions, and other metrics that indicate impact and popularity
as growth is the next step once companies have matured past looking just at raw numbers of fol-
lowers.
Many marketers measure growth as their primary metric for follower count, reach, and other
basic measures. This means that, rather than report on the number of followers at any given time,
they look at the percentage by which their followers are growing over a given period. The same
can be said for likes or other metrics; it's best in some reporting contexts to bypass reporting on
absolute numbers and report primarily on growth rates. Rather than report X number of followers
for a given month, a marketing analytics dashboard may downplay the number and report instead
the percentage of growth a channel has seen.
The decision to track growth rates is complex. Most dashboards report both absolute numbers
and growth. It’s often a matter of which data point is emphasized. When a brand is new, they may
have few followers and relatively small reach; however, that reach may be growing rapidly. Track-
ing growth is more realistic a measure of social media success than focusing on absolute numbers.
The same is the case when a paid campaign is underway with the specific goal of growing a brand's
audience. In such cases, a focus on growth metrics is especially important.
This does not mean that marketers do not look at the number of followers or the reach of
their content on social media. Rather, this is to emphasize that, as companies mature in their social
159
media monitoring activities, they focus more on measuring growth rates for
social media platforms
to make the most important metrics more prominent in their reporting
.
Most Popular Posts
Weve talked about content marketing in our chapter on search metrics. Content marketing
is the
practice of creating valuable, entertaining, or informative content to engage consumers. While con-
tent is critical to SEO efforts, it is also a core part of most companies’ social media. Think about a
celebrity's latest video that you may have seen on their Snapchat. Or a blog post from a fashion
brand you read for styling tips, which you may have first seen on Twitter, All of those items are con-
tent, and they are the key to social media engagement.
Measuring a brand's most popular posts is key to identifying content pieces that worked: blog
posts that gained many Twitter shares, videos that won many views on Facebook. Comparing
engagements on a brand's posts over time can show marketers which topics engage the most fans.
Such topical analysis allows content marketing teams to assess the impact of specific topics on con-
versions. For example, let's say you are following a food blog. Every week, they post several recipes
to Instagram. Some are vegan, some are gluten-free, while others are hearty home cooking-style
recipes. If you were the social media manager for that blog, how would you be able to tell which
recipes your audience likes best? The sentiment of comments, of course, would be one way. So, too,
would requests for more of a specific type of recipe.
However, there is another way to measure the popularity of specific topics, as well. Looking at
the number of positive reactions per post, adding the number of comments, shares, and re-posts,
will give you an aggregate measure of a post's popularity. Imagine that the last five vegan recipes
each received an average of 1,200 likes, 300 shares, and 100 comments each, mostly positive. Now,
imagine that the homestyle recipes each received 5,000 likes, 200 shares, and 800 largely positive
comments. Clearly, the homestyle recipes are more popular. This can indicate to the food blog's edi-
torial team that they may wish to create more such posts.
As you can see, a post may have more engagements in some ways, but not in others. The home-
style recipes averaged many more likes, but slightly fewer shares. If the engagement on one type
of post is greater, but the engagements are relatively low-value, such as likes, while other posts had
fewer overall engagements but more high-value ones, popularity measurement gets more compli-
cated. One way to ensure we are comparing posts with different engagement types effectively is
to use weighted measures. Marketers can assign relative weights to different types of engagement,
depending on how valuable they are to a brand. For example, a comment may be worth five times
what a like is worth, so one comment is equal to five likes. There is no single formula for weight-
ing each type of engagement. Marketers must use other metrics, such as conversions, to determine
the value of each engagement type. For instance, if posts that get large numbers of positive com-
ments are twice as likely to create conversions than those that get fewer comments, weighting
comments in proportion to their likelihood of indicating strong conversions makes sense. Mar-
keters should use conversion metrics to determine the correlation of different engagement types
with leads, conversions, or other core KPIs. They should then try different weighting systems to
attribute appropriate values to different engagement types.
For instance, imagine you run a tattoo studio with an active Instagram presence. Each week,
you post your artists’ latest work, with clients’ permission. You find that character-based ink
designs get the most likes, while inspirational mottos get the most comments. Which type of post
is more popular? How can you tell when engagements are so different? Since comments take
more effort than a like, you may be tempted to weight a comment as counting as twice as much
engagement as a like. However, you find that about 60% of new clients who find you on Instagram
mention the character work you post there: its intricacy shows the skills of your artists. Therefore,
your conversion metrics say that, although one type of post garners mostly likes, exposure to those
types of posts correlates strongly with conversions. Thus, there is little reason to believe that a high
number of likes with a low number of comments are a sign that a post has been less well-received
than a post with many comments. For this particular business, it may not make sense to weight
likes less than comments. However let's say across the street from the studio is the office of a local
arts organization. It posts to Facebook several times daily, sharing news from the local arts commu-
nity. It finds that its posts that have more than twenty comments are twice as likely to generate
donations than posts with fewer comments, even when each post has the same number of likes. It
decides to weight a comment as worth twice as much as a like reaction, because for it, one comment
is often twice as likely to indicate a high-converting social media post as a like. With time, it refines
the metric, taking into account some posts that get thousands of likes, relatively few comments,
and high conversions. It decided to approximate that a comment is worth 1.7 times more than a like.
As it gathers more data, it can analyze the data using statistics, and find its guess was right. Analyz-
ing the correlation between likes, comments, other engagements, and conversions over hundreds
of posts, the organization discovers it’s possible, using basic statistical methods such as regression
analysis, to determine the predictive value of each engagement type as a predictor of conversion.
We will learn more about regression analysis and other statistical methods in Chapter 12.
Impressions
Impressions are the measure of how many times social media content was seen. Marketers can
impressions
measure impressions for a single post or, more commonly, total impressions across all social media
The measure of how many
times social media content channels. Impressions measure the overall exposure brands had to consumers’ attention. Impres-
was seen. sions do not measure engagement. Consumers may not have noticed a piece of content as they
scrolled through their feeds; however, if the content was displayed on a consumer's screen, that dis-
play counts as an impression, even if it was only on-screen for an unnoticed moment. Impression
metrics are nonetheless a good estimate of a brand's net exposure. They can show how often con-
tent from a brand appears as part of the environment of a social network.
Given the large volume of bot traffic on the web, marketers are increasingly concerned that
metrics measure only human traffic. In advertising, impressions triggered by bot traffic, and thus
ads that are not seen by humans, are a cause of millions of dollars in wasted advertising expendi-
tures. For regular social media posts that are not advertisements, impressions from bot traffic are
less common. As a result, marketers are less concerned about the accuracy of impression counts for
social content. In addition, no money is wasted if content is occasionally scanned by bots, as mar-
keters are not paying by the impression for content views for non-ad posts.
When looking at impressions, it's important to remember that an impression represents the
opportunity to engage customers.
Understanding Social Media Metrics
https://Awww.taggermedia.com/blog/engagement_reach_impressions_understandinganalytics
Conversions and Assisted Conversions
Tracking conversions from social media is essential for proving the ROI of the channel for most
organizations. As social media has matured as a channel, more organizations understand that it's
a channel for building relationships and brand reputation, as well as managing customer service,
Nonetheless, companies want to confirm that social media activities contribute to conversions.
161
There are two ways of tracking conversions on any channel: direct and assisted. As we
learned
in the introductory chapters, a direct conversion is when a consumer responds to a
brand's message
on a channel, immediately engaging in the desired action, such asa sale. An assisted
conversion is
when a consumer is exposed to brand messaging on a channel but does not immediately convert.
Nonetheless, the exposure to the message contributes to the consumer's later decision to convert.
Web analytics platforms typically allow users to track conversions originating from social
media, both direct and assisted. Provided conversion goals are set up properly to track desired
consumer actions, analytics tools provide clear visualizations of the conversions originating from
social media posts.
Many brands find that organic social media contributes more ROI through assisted conver-
sions than direct. This can vary greatly by brand. Skilled use of attribution modeling is needed to
determine how much weight to attribute to a social media post that played a role in a conversion
path. We will learn more about attribution modeling in the chapter on web analytics. Even assisted
conversions do not tell the complete story of social media's impact. Although technology is improv-
ing, cross-device tracking is still not perfect, which means that it can be difficult to measure all
engagements consumers may have online with a brand across all of their devices, such as their
phone, voice assistant, wearable, and computer. If a consumer only liked or commented on an
organic post, but did not click, it takes complex integrations with Google Analytics or other analyt-
ics tools, as of this writing, to track those non-click behaviors to later conversions. It can be done;
however, smaller brands often lack the technical capabilities to do so. Finally, if a consumer simply
saw a social media post, but did not click on it, it may not be tracked back to the consumer by name
or subsequent action at all.
To overcome some of these tracking issues, companies can use paid ads, which provide better
tracking of behaviors, or use additional tools and integrations beyond Google Analytics and each
platform's integrated analytics. Tagging links with tracking codes can overcome time limitations on
tracking cookies, for instance. However, a conceptual limitation remains: Many consumers are not
on social media to shop; they are there to connect with other people. Thus, they may see a brand
post but not wish to engage with the brand during their social media session. Nonetheless, the post
can leave a positive impression in the mind of the consumer that later leads them to click on an ad
or visit a store. Social media can have a strong impact on a consumer's propensity to buy from a
brand, without leading to direct action inspired by any one trackable social media link.
Marketers cite the complexity of tracking social media conversions as one reason that conver-
sions are only one metric of social media success. Nonetheless, as conversions from all channels
become increasingly easy to track, management often expects marketing to provide data on how
many conversions originate from each channel.
6.7 Sentiment Analysis

When we measure the impact of social media, the numbers alone only tell a partial story. Think
of a tweet that gets thousands of shares within an hour. That may appear to be good news. If the
tone of those shares is positive, those many shares will have a positive impact on the brand, leading
to better brand awareness, potentially more followers, and increased conversions. However, what if
those shares are not positive? There is a difference in the impact of 4,000 shares with statements
such as “My favorite brand!” or shares that say, “Dont buy this terrible product!” Analyzing social
media data requires more than just analysis of volume metrics, such as the number of shares, fol-
social
lower growth, or conversion rates. It also requires sentiment analysis: measuring the tone of
media conversations about a brand.
For
Generally, sentiment analysis applies to posts about a brand rather than from a brand.
own tweets—it would not
example, you would not typically conduct a sentiment analysis of your
be useful, as your team already understands how you feel about your own brand. One excep-
tion would be to determine whether your tone reads the way you intend. However, using focus
groups or hiring consultants to audit your messaging is a better way to get feedback on whether
your humor is understood, your positivity shining through—or whether you could potentially be
falling flat. This highlights one of the challenges of sentiment analytics: currently, no computer is
as accurate as a human in assessing the emotional tone of human writing. Sentiment analysis has
improved greatly over the past decade. Nonetheless, it is best to combine sentiment analytics tools
with manual reviews of content to ensure comprehensive results.
When do sentiment analysis tools provide value? They are essential for analyzing posts about
a brand originating from social media users. Few marketing teams can read thousands of social
media posts a day about their brands, assessing them for emotional tone. Sentiment analysis tools
provide data on the overall attitudes expressed in social content.
Few brands see exclusively positive or negative sentiment. Sometimes, much sentiment is neu-
tral, which can mean a post without any evidence of a specific feeling, or where the sentiment
behind the post is difficult to ascertain. Some tools express the range of sentiments as a total sen-
timent score, such as 80% positive or 70% negative sentiment. Others report data as a chart broken
down into what proportion of posts are positive, which are negative, and which are neutral.
Five Real-World Sentiment Analysis Use Cases

https://reputation.com/resources/articles/5-real-world-sentiment-analysis-use-cases/
Both have their advantages. When starting out with sentiment analysis, brands may simply
wish to know how they are perceived on social channels overall. More sophisticated data efforts
require a breakdown of sentiment into positive, negative, and neutral categories. More powerful
tools will provide data on sentiment segmented by user demographics or by individual posts. For
instance, with a full-featured sentiment analytics tool, marketers can determine whether a specific
post received positive sentiment only in a specific geographic location, or whether video posts get
more positive comments than text-based content. This can be valuable for determining what types
of products resonate with specific consumer segments, or what content types generate the most
positive awareness of a brand. Paired with data on clicks, shares, and conversions, sentiment analy-
sis helps paint a fuller picture of consumer needs, the effectiveness of specific marketing materials
and campaigns, and the consumer attitudes towards a brand. For this reason, sentiment analytics
are now a vital part of most social media measurement programs.
machine learning While sentiment analysis may seem simple, its technical basis is among the most complex of
The science of helping all marketing analytics technologies. This is because analyzing human language is a challenging
computers understand task for today’s computers. Typically, sentiment analysis tools are built using machine learning, a
complex phenomena and computer engineering and data science discipline related to artificial intelligence. Sentiment analy-
make predictions or
interpretations based on sis can exist apart from machine learning—for instance, reviewers can manually assess sentiment
that understanding. in smaller datasets. However, when it comes to large-scale mining of data for sentiment, machine
learning and data science play key roles. In this section, we will learn about the computer science
methods underlying sentiment analysis.
Machine Learning
Machine learning is the science of helping computers understand complex phenomena and make
predictions or interpretations based on that understanding. Human language and emotions are
very complex; no computer today can fully interpret much human behavior. Take a lot of the things
we post to social media every day. Let's say you are heading out to class when you realize you are
163
running late. You put on an old T-shirt, sunglasses, and jeans that are not your favorites. You
later
post a selfie, hashtagging it #stylediva. All of your friends understand the joke. A computer would
not. Computers do not understand sarcasm, irony, or most jokes. Yet, understanding when peo-
ple are joking is critical when analyzing social media posts about a brand. If you are running the
social media account for a rideshare service, and a disappointed user tweets at you, “I'm so glad
you consistently get me to my destination late,” you don't want to categorize that post as a positive
comment. Customer service is a vital application of social media data analysis; marketers need tools
that flag customer posts that require a helpful response, such as complaints.
This is where machine learning helps. Machine learning allows data scientists to train com-
puters to detect and understand complex patterns in language. Scientists use large datasets and
provide computers with sets of rules called models about a phenomenon. For example, they might
collect ten million social media posts and run them through a computer program using a model
that indicates that certain words appearing together, or specific hashtags, often indicate that a
user is joking. Gradually, the computer program learns what posts are likely to be positive, which
are jokes, which are neutral, and more. The more data it processes, the more accurate it will
become—but only if the data scientists running the program test outputs, make corrections to
models as needed, and ensure that the data processed is properly formatted for training and analy-
sis. It's a myth that machines are now able to think thanks to artificial intelligence. Most sentiment
analysis is simply a complex predictive model using advanced statistics that machines can perform
more quickly than humans—however, the systems still require extensive input from people.
Machine learning requires powerful computers, large datasets that accurately represent the
audience that will be analyzed, and skilled human managers to ensure precise analysis. Most mar-
keters depend on outside tools to provide sentiment analytics capabilities rather than attempting
to build their own. Many social media tools have built-in sentiment analysis.
Natural Language Processing

The subdiscipline of machine learning that pertains to analyzing human language is called natural
language processing (NLP). You have probably experienced NLP. If you have ever received online
customer service from a website's chatbot, you have been treated to NLP. It’s also the core science
behind everyday digital phenomena such as autocorrect, auto-suggestions when you type a search
into a search engine, and email spam filters. NLP is everywhere online. NLP is one of the main
methods used to perform text analytics, also known as text mining. In text analytics, written texts
are analyzed using machine learning methodologies, including NLP, as well as statistical modelling,
to look for patterns.
NLP involves mapping the parts of speech. Data scientists who specialize in NLP break down
sentences into individual words, then find the roots of those words, identifying the common mean-
ing of different versions of a word, such as “painting,” “painted,” and “painter.” Common themes,
such as “words related to paint” are thus made clear to the computer. We learn how to tell the
different meanings of words at a young age; computers need a map. Words are transformed into
integers—numbers—so that a computer can process them.
The Basics of NLP
https://towardsdatascience.com/real-time-sentiment-analysis-on-social-media-with-open-
source-tools-f864ca239ate
complex operations
Data scientists create that map. All of this is simple grammar; next, more
words appear together
are formed. Every pair of words is analyzed to look for patterns of what
most often. From there, sophisticated computer programs look for patterns, such as what types of
words and symbols often appear together when a speaker is excited, such “amazing,” “#blessed,”
and many exclamation marks. Using this method, data scientists working in marketing have found
common patterns in spam emails, for instance; emails that are spam often have exclamation points
in their subject lines. As a result, even promotions that your customers want, such as your latest
deals, will be automatically flagged as spam by many email platforms. NLP makes processing mar-
keting activities that depend on human language more efficient, but this efficiency comes at the
cost of accuracy. Just as legitimate emails will be stopped by spam filters that block any subject line
with exclamation marks, so, too, does sentiment analysis often oversimplify what people are really
saying on social media.
Marketers performing sentiment analysis must strike a balance between efficiency and accu-
racy. A reasonable workflow is to process all social media using sentiment analysis tools, while
keeping marketing teams active in reading posts to gain a full understanding. Such manual review
can be made consistent with the use of manual coding tools, a methodology borrowed from social
science research. In manual coding, human reviewers read through text, such as social media posts.
They note patterns, develop codes for those patterns, then mark up the text with those specially-
developed codes. With this method, companies can realize some of the consistency of NLP paired
with the accuracy of human review.
FIGURE 6.6 Mapping and Workflow
Sentiment e Assessing emotional tone

Analysis ¢ Provides data on overall
attitude (positive, negative, neutral)
¢ Helps computers understand complex

Machine phenomena and patterns
Learning e Makes predictions
¢ Sentiment Analysis tool
Natural | + Subdiscipline of ML that

Language || pertains to human language
Processing | * Mapping parts of speech
6.8 A Closer Look: Turning Sentiment

Analysis into Consumer Insights
Isabella Nguyen is excited: She just opened her twentieth new comfort-food truck across the
Northeastern United States. Business is bboming—all thanks to social media. Isabella started out
the year when she graduated from culinary school with just one truck in her hometown, and now
she owns trucks in most metropolitan areas in New England and the New York area. She had heav-
ily promoted that first truck, posting not only food images to Instagram, but also starting
Tumblr
and Pinterest accounts with comfort-food recipes, a podcast on comfort food traditions around
the
165
world, and a Snapchat account to share her personal story as a young entrepreneur. As the business
grew, her social media presence came to include candid posts from employees and truck managers,
guest recipes from celebrity chefs, and many guests on her podcast.
With such an extensive social media presence, Isabella feels she has a good understanding of
her consumers. “They tell us when they love something,” she tells her new general manager, Stacey
Angelo. “They also tell us when something is not to their taste. We need to get better at learning
how to take what they're saying to us and translate it into action. That's the way we will grow to
our 100th food truck.” Last fall, for instance, they couldn't keep their new apple crumble in stock; by
12:30 every day, it was sold out. “We should have ordered more apples,” says Isabella. “When it first
debuted, we posted the recipe. It got raves from our fans on every channel. We should have realized
we had a huge hit and that wed be selling a lot.”
“What about when they don't like something?” asks Stacey. “Does noticing that a new food is
less popular on social media help you decide to pull something from the menu?”
“I wish it did,” says Isabella. “Last year, we tried a brussels sprouts fricassee. It tested well in
focus groups, but it was panned by influencers, then our fans. The recipe got the fewest re-pins of
any pin we have ever created on Pinterest. We ended up with 100 pounds of Brussels sprouts per
truck at the end of the first week because we didn't listen to consumer sentiment. We donated the
veggies to a community dinner, but this unpopular dish could have been avoided if we were sys-
tematic about gathering sentiment data, turning it into consumer insights, and taking action on
that data-driven insight.”
“We can do this,” says Stacey. “You are already using social media management tools to engage
with your consumers. What will turn this engagement into a product strategy is text analytics. We
can start simple. We can analyze how often certain words, like ‘delicious, appear in tweets, along-
side what other words with which they appear, such as ‘apple fritter. Looking for patterns will help
identify what products are most popular. The computer science can get complex, but the founda-
tional idea is simple: seeing what words appear together, how often they appear—the patterns of
language. Mining that will identify product preferences, as well as the strength of those prefer-
ences, such as the degree of positivity toward a new coffee flavor.”
“That's great!” exclaims Isabella. “Text analytics will help us turn our social media data into a
driver of our entire business. We'll mine the texts of social media posts to learn what our customers
think about different products, develop new product ideas, and project demand so we can manage
our supply chain.”
“Sounds like you already know exactly what youre going to do with the data,” says Stacey.
“Having a clear goal in mind is exactly the way to mine text data. Different techniques process
data in different ways, such as eliminating common words to make processing faster. By knowing
the information that you want from text analysis, a data scientist will be able to apply the right
process to all those tweets, Instagram comments, and Facebook posts, making the data easier for
computers to see patterns in human language. First, the data scientist applies data cleansing and
pre-processing to the data: fixing misspellings, removing common words if it's appropriate, shorten-
ing long words into their root words. That all makes it easier for a computer to understand because
it reduces the complexity of our very complex human language. Then, an algorithm analyzes the
simplified text for patterns, such as how often positive words appear alongside a product name.”
“It then outputs charts to make the analysis easier for humans to understand. It’s a complex
interplay between human language and computer algorithms. And it looks like it will give you the
product insights you need!”
6.9 Do the Math: Sentiment by Reach

It's wonderful if your customers tell their friends about the high quality of your products. If some
of your customers have thousands of friends, or millions of followers, that's even better. The pos-
itive sentiment about your product has reached even more consumers. That is why an increasing
number of social media analysts measure sentiment in conjunction with reach. Measuring senti-
ment by reach allows marketers to rank posts by how many consumers may have seen a positive,
negative, or neutral evaluation of a brand.
Let's say you note a positive tweet from an influencer with four million followers. We know
that organic reach measures every social media user who could potentially have seen a message.
The tone of the sentiment is highly positive. The influencer noted, “I love this lip balm!! It is truly
the most effective product I have ever used. I was not paid for this message. This is sincerely the
only lip balm you should use!” Your sentiment analysis tool rates all sentiment on a scale of -10, for
most negative, to +10, for most positive. This tweet is rated +10, and its reach is two million. To report
its sentiment by reach, multiply reach by sentiment score:
Sentiment by Reach = Reach x Sentiment Score

2,000, 000 x 10 = 20, 000, 000
FIGURE 6.7 Negative and Positive Sentiment
Negative
Sentiments (-) Positive
Sentiments (+)
Note that this does not mean that 20 million users saw the post. What it means is that this
tweet was worth 10 times a neutral post in terms of positive brand impressions. To accurately
report sentiment by reach for a brand, calculate the sentiment by reach of all posts in a given time
frame, and then add all the negative numbers to get total negative sentiment by reach and all the
positive ones for total positive sentiment by reach. In this way, marketers can determine the level
not only of positive or negative sentiment but also whether one significantly outweighs the other
in the minds of the public. This metric can help measure the overall impression a brand is making
on social media users."”!
Sometimes, a product has equally strong positive and negative sentiment, with equally large
audiences. In such cases, a brand is polarizing, meaning that consumers feel strongly about it
in both sentiment directions. In other cases, one sentiment predominates, with most consumers
exposed either to positive sentiment or negative. In either case, measuring sentiment by reach
gives marketers insight into a brand's reputation, both in quality and the number of users who have
heard good or not so good things about a brand.
167
6.10 Case Study: Tweets for Seats

The American Marketing Association (AMA), Boston, is one of the five largest chapters of the
American Marketing Association. Catering to marketers throughout New England, the organiza-
tion offers mentorship, networking, and professional development to marketers from senior-level
to newcomers.
The core programming of local AMA chapters are monthly events. They include casual net-
working mixers as well as lectures, workshops, and panel discussions. The Boston chapter had a
robust program of formal workshops with industry-leading speakers. These workshop presenters
included national authors, chief marketing officers (CMOs) of Fortune 500 companies, and leading
technical talent. The events themselves were held in attractive locations, including Boston sports
venues, universities, elegant dining establishments, and luxury hotel ballrooms. Moreover, aside
from the informative speakers, the attendees enjoyed cocktail receptions where they mingled with
other marketing leaders.
With such attractive programming, the board was unsure of what features were drawing the
most attendees. Were people coming out to meet and greet fellow marketers? Enjoy the venues?
Or was it the topic of each workshop, which ranged from public relations to brand-building? What
about the speakers? Were many in the audience there to learn from these talented industry veter-
ans?
Social media analytics provided some answers. Moreover, analysis of the data helped turn
those answers into a course of action that further grew ticket sales. Then vice president of social
media, author Christina Inge, examined Google Analytics data for a complete year of AMA pro-
gramming. She found that more than 15% of traffic originated from Google searches for the names
of recent speakers. These visitors were coming to the AMA website, spending above-average
amounts of time on the site after finding it through a search about these noted individuals. In addi-
tion, about 20% of web traffic was attributable to social media. Click-throughs on social media posts
were evenly distributed, however, between clicks on event-related posts and those related to job
postings or general chapter news. In addition, there were few clicks on links to venues.
Noting that the names of event speakers were top keywords in driving quality web traffic, Inge
proposed a program of actively promoting speakers as the key draw for event attendees. Dubbed
Tweets for Seats by then-chapter president, Myles Bristowe, the program involved two types of
tweets:
1. Posts by the official account and volunteers featuring the speakers, tagging their professional
Twitter accounts
2. Posts by the speakers, announcing their AMA workshops
Within three months, the Tweets for Seats program accounted for more than 25% of event
ticket sales. In addition, over half of events were near-capacity in the following year, with several
capacity events. Tweets for Seats, created using data, drove measurable impact in event ticket sales,
while engaging a wider community.
6.11 Conclusion
Social media analytics provide both real-time and longitudinal data on the performance of social
media programs. They also provide insight into consumer needs, allow companies to respond to
online customers any time, and illuminate emerging industry trends. A special area of social media
analytics is text analytics using natural language processing (NLP). This allows companies to ana-
lyze the text of social media posts for patterns, which includes consumer sentiment analysis. While
many brands focus on simple metrics such as likes and shares, a most systematic analysis of multi-
ple metrics across time yields more complete decision-making data.
Basic social media metrics, such as likes, are the starting point for analysis of a brand's social
media presence. These measurements offer insight into a brand's overall visibility. Most brands
need to combine basic metrics with more advanced techniques. Looking at data over time, mining
posts for sentiment, and topical analysis are advanced techniques that allow marketers to make
informed decisions about social media strategy, broader promotional programs, and across the 4Ps.
Audience demographic data provides insight into basic facts about the fans of a social media
profile, those who engaged with specific posts, and ages, genders, income levels, and locations of
consumers of specific social media content. This data is useful for targeting. Measuring social
media-driven conversions for a business is complex. It requires tracking of both direct and assisted
conversions. Sentiment analysis both measures social media effectiveness and is a means of using
social media posts by consumers as a data source to inform other marketing programs. Sentiment
analytics requires the use of machine learning (ML), especially NLP, an important discipline of ML.
NLP is a method of performing text analytics also known as text mining, which is the mining of
written texts for data. Data scientists use multiple methods for text analytics. It is important to set
specific goals for text analytics, so that accurate, appropriate methods are applied.
169
. Name some ways a company can measure the effectiveness of their social media content
for creating brand presence on social media channels.
. What are some basic metrics that companies use to understand their social media pres-
ence? How do they assess growth?
. What two types of data do social listening tools provide? Give an example of each one.
. What do mentions tell us about the strength of a brand?
. Why do marketers measure social media shares?
. Name a few applications of page views and profile views—how is this metric used? What
information can these metrics tell marketers? How can marketers use this information?
. How can one use weighted measures to compare engagement value and determine popular
posts?
. What do comment volume and share volume data indicate?
. Does the number of followers a brand has at any given time matter? Explain your reasoning.
. What is the difference between reach and share of voice?
. What is the difference between impressions and engagement?
. Give an example of a conversion and another example of assisted conversion. Which one
contributes more ROI?
. Describe machine learning’s role in sentiment analysis. What types of complications may
arise during this process?
14. You have just taken over as social media strategist for a regional hockey team. You want to
know what efforts have been successful to date in engaging fans, in selling tickets, and in
building the team’s brand. What metrics will you examine? What action will you take based
on the data revealed by each metric?
15. You run digital marketing for a grocery chain. You want to grow awareness of your special
offers. What data would you use to measure current levels of awareness of your brand?
Current social media users’ exposure to your special offers? What actions would you take,
based on the data, to increase reach?
16. Your car company is launching a new electric SUV aimed at working, recent college gradu-
ates living at least ten miles outside large cities. Your goal is to promote sales using social
media. What data would you collect to determine how well you currently connect with this
audience?
VY. Your company just launched a lavender flavored lip balm. Sentiment is mixed, with some
consumers calling the product the “next pumpkin spice” while others are less impressed.
How would you measure the overall impression your new product has made on consumers?
18. How does text analytics help companies make product-line decisions? Explain how com-
panies can use text analytics to predict consumer demand, refine new product ideas, and
shape product line directions.
19. Why do we say measuring conversions from social media is complex? What are some of the
factors that contribute to the complexity of addressing conversions that originate from social
media?
20. Imagine you are creating a new promotional campaign for a soft drink. You're introducing
the drink in a limited edition, with plans to distribute more widely if the product launch is pos-
itive. You want to measure the comments related to posts about the product to determine
the new drink’s reception. How would you analyze comments to glean early data on a new
product launch?
. Mercer, Chris. “How Google Analytics Attributes Traffic from Facebook:

Social Media Examiner.” Social Media Examiner |Social Media Marketing,
Endnotes January 23, 2019. https://www.socialmediaexaminer.com/how-google-

analytics-attributes-traffic-facebook/.
. Rohe, Danielle. “Solving Facebook Data Discrepancies.” UpBuild, June 17,
2020. https://www.upbuild.io/blog/facebook-data-discrepancies/.
. Schleyner, Eddie. “19 Social Media Metrics That Really Matter-And How
to Track Them.” Social Media Marketing & Management Dashboard, April
. Berger, Jonah, Contagious. London: Simon & Schuster, 2013. 26, 2021. https://blog.hootsuite.com/social-media-metrics/.
. Tran, Tony. “What Is Social Listening, Why It Matters, and 10 Tools to 10, Lincoln, John E. “What Is a Good Click Through Rate? CTRs by Industry.”
Make It Easier.” Social Media Marketing & Management Dashboard, April Ignite Visibility, April 15, 2021. https://ignitevisibility.com/what-is-a-good-
9, 2021. https://blog. hootsuite.com/social-listening-business/. click-through-rate/#socialmedia.
. Tran, Tony. “What Is Social Listening, Why It Matters, and 10 Tools to ili Mayo, Matthew. “A General Approach to Preprocessing Text Data.”
Make It Easier.” Social Media Marketing & Management Dashboard, April KDnuggets, May 12, 2021. https://www.kdnuggets.com/201 7/1 2/gen-
9, 2021. https://blog.hootsuite.com/social-listening-business/. eral-approach-preprocessing-text-data.htmI.
. “US Social Trends for 2020.” eMarketer, July 30, 2021. https://www.emar- 12. Neves-Silva, Rui, Marta Gamito, Paulo Pina, and Ana Rita Campos. “Mod-
keter.com/content/us-social-trends-for-2020. elling Influence and Reach in Sentiment Analysis.” Procedia C/AP. Elsevier,
. Roeder, Laura. “How Good Is Your Facebook Reach? A Step-by-Step June 13, 2016. https://Awww.sciencedirect.com/science/article/pii/
Guide.” May 20, 2021. https://meetedgar.com/blog/how-to-find-out-if- $22128271 1630467X.
you-have-good-facebook-reach-2/.
. “Bidding and Auctions FAQs.” Twitter, May 12, 2021. https://busi-
ness.twitter.com/en/help/troubleshooting/bidding-and-auctions-
faqs.html.
CHAPTER 7
Over 100 Billion Emails a Day?
Learning Objectives

1. Define subscriber, campaign, and program-level email marketing metrics.
2. Understand the importance of list health metrics and analyze an email marketing program
using list-health criteria.
3. Describe the importance of email list growth and measure growth using standard metrics.
4. Create a testing and optimization program for email or marketing automation using both A/B
and multivariate methodologies.
5. Measure the contribution of marketing automation to organizational key performance indica-
tors using campaign and subscriber metrics.
Every day, businesspeople send more than 124 billion emails, according to the research firm Sta-
tista."! While you may use email only for a few reasons, it remains the standard method of commu-
nication in business. Internal communications mechanisms, such as Slack, have taken over much
of the messaging traffic within a company; however, when it comes to communicating outside one's
organization, email remains the standard. In this chapter, we will learn about how to measure the
effectiveness of email marketing campaigns.
In addition to being a key means of communication among business professionals, email mar- marketing
keting is also a core component of marketing automation. Marketing automation is the practice of automation
providing an automated series of messages or interactions, triggered either by consumer actions or The practice of providing
in atime series. Often, these messages are emails or start with email messages. Marketing automa- an automated series of
messages or interactions,
tion provides consumers with personalized content, offers, and event triggers, such as abandoned triggered either by
shopping cart reminders. It engages more consumers than traditional, non-personalized messag- consumer actions or in a
ing, resulting in a higher return on investment (ROI) than broadcast messaging alone.” In this time series.
chapter, we will also learn how to measure the impact of marketing automation.
7.1 Basic Email and Marketing

Automation Techniques
With billions of emails received every day, measuring even basic data about email marketing cam- email marketing
paigns is complex. In this section, you will learn the fundamental metrics most marketers use to Marketing via email, such
determine whether an email campaign is a success. as newsletters, updates,
and promotions.
Before we begin our discussion of email marketing and automation metrics, it's useful to define
the major types of messages marketers use on these platforms. Each type of message shares some
common metrics, while having some metrics that are especially relevant only to them. These mes-
sage types form the core creative and structural units of an email marketing campaign:
1. Newsletters
. Announcements
. Offers and promotions
. Transactional emails
. Lead nurturing emails
WO
fF
oO
N . Customer journey messages
FIGURE 7.1 Types of Email Marketing Messages
Offers and
Newsletters Announcements promotions
Customer
Transactional Lead nurturing
journey
emails emails
messages
newsletters
Newsletters are common in B2B, nonprofit, and small-business marketing. They contain what
their name implies: news about an organization, its offerings, and its programs. Newsletters are
Emails containing news
about an organization, its often connected with content marketing, containing digests of blog posts, embedded videos, or
offerings, and its other informational content. Announcements are single-purpose emails that contain vital news,
programs. such as a product announcements. Offers and promotions flood most consumers’ inboxes every
day, with many retail brands sending daily coupons.
announcements
Single-purpose emails that Transactional emails are messages related to a specific transaction. They include shipping
contain vital news, such as notifications, shopping-cart abandonment reminders, and upselling messages. They have the high-
product announcements. est open rates of any type of email. Lead nurturing emails connect with leads that have not yet
converted during a long sales cycle. They include follow-up sales messages, content marketing, such
transactional emails
as solicitations to view a webinar, and promotional messages. Often, they are sent to prospects in a
Messages related to a pre-set cadence, representing many companies primary efforts at marketing automation.
specific transaction. They
include shipping
notifications,
shopping-cart
abandonment reminders,
and upselling messages.
173
Customer journey messages are a diverse range of emails, typically part of a marketing
automation campaign. They are designed to reflect and shape a customer's journey as customer journey
they engage messages
with a brand, from initial contact to ongoing relationships after the initial sale. They include
simple
automations, such as software onboarding series, wherein consumers who sign up for Messages, typically part of
a new app marketing automation
get messages daily explaining the features of the product. They can also integrate sophisticated campaigns, that reflect
lead-nurturing messages, customer support, and satisfaction surveys. What sets them apart from and shape a customer’s
transactional, lead-nurturing, or promotional emails is that they are designed specifically around a journey as they engage
with a brand, from initial
customer journey map. The intent of such emails is to provide customers with “just-in-time” mes- contact to ongoing
saging that supports what they need from the brand. relationships after the initial
sale.
CUSTOMER JOURNEY ROAD

INTEREST RETENTION
FINISH
é
‘
AWARENESS PURCHASE ADVOCACY
When marketers measure the impact of any email campaign, a few fundamental metrics are
commonly essential to any analytics effort.
By tracking email metrics, organizations can engage their most loyal customers, understand
their markets better, and create personalized messages that meet consumers needs. Let's look at
some of the data that can help companies build better email connections.
Opens by Campaign
A key consideration for any marketer sending emails is whether consumers opened the messages.
After all, the first step to a consumer taking action is for them to read the emails contents. Tracking
email opens is somewhat complex, however.
Open Rate
The most common metric of how many recipients opened an email is the open rate. This is open rate
expressed as a percentage of those who received an email. For example, if 10,000 email addresses The percentage of those
received an email, and it was subsequently opened 1,000 times, the open rate is 10%: who received an email
who opened it.
10, 000/1, 000 = 10
email market-
Open rates are commonly reported in the dashboards (main control screens) of most
track when assessing a recently
ing applications. They are the first metric many email marketers
of an email by the same
sent email. Open rates measure all opens, including repeated openings
recipient. Thus, it measures simply how often an email was opened, not how many recipients in
total opened it.
Unique Open Rate
To determine the exact percentage of recipients who opened an email, marketers use the unique
open rate. This metric tracks the percentage of recipients who looked at the contents of an email.
Unlike the open rate, the unique open rate does not count multiple opens by the same recipient.
It is a metric of how many unique recipients opened an email. Taken together, the open rate and
unique open rate measure how many recipients welcomed the opportunity to learn more about a
company’s email message by reading at least part of the message, or looking at its contents.
Marketing Metrics You Should Be Tracking

https://hurrdatmarketing.com/digital-marketing-news/email-marketing-metrics-you-should-be-
tracking/
Technical Challenges of Traditional Open Rate
The traditional method for measuring email open rates requires the use of a tracking pixel. A track-
ing pixel is an invisible image, the size of a single pixel, embedded in an email. Email marketing
platforms track when this pixel is called, or downloaded, from the server on which the email orig-
inated. It is the downloading of this invisible image that is tracked by email marketing platforms
rather than in-app actions by a consumer reading an email."
For most email messaging aimed at consumers, tracking pixels accurately measure email
opens. Consumers typically use email clients, or tools used to access one's email, that do not block
images by default, or if images are blocked by their client, consumers typically accept images from
trusted brands, especially for offers and transactional emails, which normally contain important
content within their images. It is a different case for B2B email messages. Many companies use
email clients that block images for security reasons. For this reason, open rates, whether standard
or unique open rates, can be less accurate for B2B email marketing. Regardless of whether they
target B2C or B2B, email marketers should be aware that many opens are difficult to track as an
increasing number of users consume emails without accessing embedded images.
Click Rate and Click-to-Open Rate

When we send out an email, our goal is typically conversions: getting recipients to take some
click rate
desired action. They may make a purchase or a donation, based on the content they read in the
The percentage of
recipients who clicked on email. We want our emails to appeal to consumers, inspiring them to take action. Measuring the
any link within an email. click rate is the first step in determining whether an email is achieving the goal of engaging users.
This metric tells us whether any of the contents of the email inspired a reader to click on links in
the email, thereby reading more, shopping on a site, or taking any other action.
The click rate is the percentage of recipients who clicked on any link within an email. They
may have clicked on one link, a few, or all of the links in an email—the click rate will typically be
the same, since it tracks users who clicked rather than individual clicks. Note that the click rate also
measures Clicks as a percentage of all recipients who received the email, not just those who opened
the email.
175
oO
E
Understanding
Mailchimp
Open & Click
Rates
Let's look at an example.

Let's say youre in charge of a big fundraising campaign for a local nonprofit, Save the Dogs.
Your goal is to engage past donors, asking them to give to your organization's annual charity dance
event. You send a fundraising appeal to 10,000 past donors. The email features photos of furry
friends that were adopted last year through your programs, along with a strong call to action: a big,
brightly-colored button that says, “Support Dogs Now!” The email also contains links to your web-
site's homepage and your social media profiles as well as to a page featuring adoptable pets.
You are certain that your email will engender many donations to the event. Of the 10,000 peo-
ple who receive the appeal, 1,000 users click on links in the email, resulting in a click rate of 10%.
10, 000/1, 000 = 10%

However, only 1,800 recipients actually opened the email at all. Thus, most of the 10,000 recipients
did not even see the links in the email. They never saw the dog photos, nor the Support Dogs
Now button. Looking at the click rate is thus a poor metric of how engaging they found the con-
tent—they never read it! For this reason, the click rate is only an approximate engagement metric.
More accurate is the click-to-open rate (CTOR). This measures the percentage of the people
who opened the email, who also clicked on any link within the email. Going back to your animal-
charity appeal, you find a click-to-open rate of 55.5%.
1, 800/1, 000 = 55.5%
This means that over half of all people who read the email felt inspired to take action. This is a
strong indicator that, once opened, the email was highly effective at engaging its readers. You did a
great job at writing an interesting email!
Click rate and click-to-open rates are only part of the click landscape. Marketers often closely
examine which links received the most clicks in a given email to measure which topics were most
interesting to users. Going back to your fundraising email, you find that the clicks are evenly
divided between clicks on the donation button and clicks leading to the page showing adoptable
dogs: 45% of users clicked on the Support Dogs Now donation link, while 40% clicked on the link
to adopt a dog. The remaining 15% of clicks went to your website's homepage or your social media
links. This means that even though the main purpose of the email was to raise funds, many users
did not respond to your main call to action. Instead, they took other available actions. Measur-
ing the click or click-to-open rate of the email would not have provided this vital data. By digging
deeper, gathering data on specific links, you were able to identify your donors interests. You can use
this data to craft future emails, making sure to focus readers’ attention on only one call to action,
to prevent distraction. Conversely, you may decide that it's acceptable if recipients do not donate if
they adopt a dog instead.
Email click metrics provide data, but they do not provide direction. It is up to individual mar-
keters to decide what an email's goals are and interpret click data based on those goals. If your goal
is solely to raise funds for your dance event, the email is a mixed success. However, if your goal is
to find good homes for pets, your email was highly successful. Email click data is most useful, like
most marketing data, when analyzed against specific goals.
Forwards
The forward rate is the percentage of email subscribers who forwarded an email to a friend by
forward rate
using the “Forward to a Friend” feature that is included in many email templates provided by email
The percentage of email
service providers (ESPs) or marketing automation platforms. It does not typically include users
subscribers who
forwarded an email to a who forwarded an email using their own email client's forwarding capability. Thus, the forward rate
friend by using the is a limited metric. It can indicate an email's popularity. However, since it does not capture many
“Forward to a Friend”
instances in which an email will be forwarded, it should be used with caution. It can be part of a
feature that is included in
many email templates. reporting dashboard that includes other, more accurate metrics.
email service
providers (ESPs)
A company that provides List Growth
email marketing tools and
functionality.
Most organizations want to grow their audience. Regardless of channel, marketers monitor the
list
growth of the number of engaged members of their community: Social media followers, website
In email marketing, a visitors, and YouTube channel subscribers are all key statistics companies track. For email market-
group of subscribers to a
brand’s email marketing
ing, the metric that tracks audience growth is the list growth rate. This measures the net number
messages. of people on an email marketing list. For instance, let's say your email list currently has 200,000
subscribers. This month, you add a net of 2,200 more: 2,350 people signed up for your email list,
while 150 unsubscribed, resulting in net growth of 2,200:
2, 350 — 150 — 2, 200
List growth can be expressed as an absolute number or a percentage. You can simply state that your
list grew by 2,000 new subscribers or that it grew by 1%. List growth is a strong indicator of poten-
tial future sales growth. If email list growth increases, this increase reflects growing interest in a
brand, which can often be an early indicator of new sales. It also tracks the popularity of the email
program itself. Maintaining a strong email list is critical for most brands, both B2B and B2C. Hav-
ing consumers’ email addresses means that brands can engage with each consumer directly, and
closely track each consumers’ actions and interests. In the next section, we'll explore how brands
track the health of their email lists.
List Growth by Channel
Often, when marketers measure list growth, they want to know what drove that growth. One key
reason to measure marketing is to optimize it. Thus, marketers want to know what contributed to a
success in order to replicate it. Email lists grow through different means: Customers may be asked
to provide their email addresses at checkout registers, they may text their address to a short code
in exchange for a discount, or they may sign up via a company's website. Tracking list growth by
channel allows marketers to know which method for signing up email list subscribers is most suc-
cessful.
177
Conversions by List Acquisition Channel
Once a brand knows how they are signing up the most consumers to their email
list, they also want
to know whether consumers acquired via each channel are likely to convert. unsubscribe
For instance, cus-
tomers may feel pressured to give their email address at a register, without really wanting To remove one’s email
to join from a mailing list.
an email list. Email addresses acquired under such circumstances may not lead to high conversion
s,
and, indeed, such consumers may be likely to unsubscribe or even issue spam complaints. Thus,
to
fully measure the impact of list-growth initiatives, companies must also measure the conversio
n
rates of different groups of consumers who signed up for an email list via different mechanisms.
FIGURE 7.2 Email Metrics
Email
metrics
Open rate Click rate Forwards List growth
Unique Click-to-
open rate open rate
7.2 A Closer Look: Building a Loyal

Base
Geraldine Trent has always loved drumming. As a child, her first instrument was a drum kit, and
though she tried guitar, she loves the drums. As the drummer for Carpet, a band she started with
her dorm-mate, Chloe Amador, shed like to get more fans to their shows. As a marketing major,
Geraldine has a plan to engage fans on multiple channels: She posts images from Carpet's shows
on Instagram, along with videos. She creates posters and fliers. However, the best way to bring fans
to shows has been her email list. The band has a sign-up sheet at shows, as well as a sign asking
fans to text the word “join” to a short code to receive an automated text message that will help them
sign up for Carpet's email list. Twice a month, Geraldine sends out an email with a list of upcoming
shows, links to buy songs and merchandise, and exclusive photos from shows that are not posted
to social media.
Whenever the band members ask show attendees how they found out about the show, about
one-third say they read about it in the newsletter.
“That's great news!” says Chloe.
“It is, but I think we can grow our audience more. When the email goes out, only about half the
subscribers open it,” says Geraldine.
“Is that a low number?” ask Chloe.
“I don't know,” says Geraldine. “Maybe other bands have more people reading their emails, if
they send them. Wonder what the average percentage is of people who open mass emails?”
“Well, you're the marketing major! Do you think you can find out?”
“Of course—I'm going to research this. Maybe 50% is actually a great percentage of people read-
ing what I send. Also, I'm going to research ways to make our emails stand out more.”
A few weeks later, Carpet plays their first sold-out show; the next week, they sell out another
show at an even bigger venue.
“Wow” says Chloe, “The latest email really brought our fans out! How did you do it, Geraldine?”
“It turns out, a 50% open rate is actually really good for an email list, so 1 knew that our fans
really like to get our messages. Knowing that, the key was to work on getting more fans to attend
after reading our updates. I did some A/B testing, testing different email layouts to see which got
the most interest, as measured by traffic to our website. That really helps in creating more eye-
catching emails, so that once people opened it, they read all the updates and went to our site. I also
tracked what times of day got the highest open rates, making sure to send emails on days more peo-
ple read them. Finally, I created a list of super-fans: people who have been to three or more of our
shows, bought songs or merchandise, or who read every issue of our newsletter. I sent those fans
special emails with extra content and ticket giveaways to show our appreciation of them. Those
super-fans are the ones here tonight, and they brought their friends!”
“It looks like email metrics really helped us connect with our loyal fan base,” says Chloe.
7.3 List Health Metrics
In the previous section, we covered many fundamental email metrics, including list growth. In this
section, we will explore data about email lists in greater depth. A brand’s email list is a critical
marketing asset. Its growth, value as a marketing tool, and effectiveness are critical measures for
brands.
Bounce Rate
bounce rate The bounce rate in email marketing refers to the percentage of emails that were found to be unde-
liverable. There are two types of bounces:
In email marketing, refers
to the percentage of + Hard bounces are deliveries to email addresses that no longer exist. The email owner may have
emails that were found to moved to another company or the mailbox have been suspended for another reason.
be undeliverable.
+ Soft bounces are deliveries to email addresses that exist but are not accepting emails at the
moment. That can include the addresses of users who have set a vacation autoresponder or to
a mailbox that is full.
The bounce rate is an indicator of how well-maintained an email list is. Typically, a list that
is updated frequently will have a bounce rate lower than 2%,"! since the marketers managing the
email list will frequently delete outdated addresses. In addition, an email program that is popular
with recipients will have a low bounce rate, because subscribers will update their addresses proac-
tively in order to continue to receive messages. Bounce rates are an early indicator of customer
churn or brand loyalty. In e-commerce and media, a high bounce rate may be associated with infre-
quent purchasing patterns on the part of consumers: Buyers may purchase so seldom that they
do not login often enough to update outdated contact information. By contrast, e-commerce and
179
media brands with high customer loyalty will see low bounce rates.
Consumers will login often,
thereby keeping their contact information updated.
WHY EMAILS BOUN

CE
Bounce rates are a key metric for marketers to examine for signs that their subscriber or cus-
list hygiene
tomer base is engaged and loyal. There is another reason for marketing teams to be mindful of
Maintaining an email
bounce rates; email service providers use the bounce rate as an indicator of effective list hygiene
marketing list to ensure it
practices. A sender with consistently high bounce rates may have a list containing the addresses of is accurate and frequently
consumers who do not truly wish to receive emails from the brand. At times, this can result in the updated.
sender being barred by an ESP, especially if high bounce rates occur alongside other poor list
hygiene indicators, such as spam complaints. spam
Unsolicited email sent to
consumers who find such
an email unwelcome or
can reasonably be
Complaint (Spam) Rate expected to find the
message unwelcome.
Marketers should always be careful to send emails that are welcomed by recipients. Emails that
trigger a high volume of spam complaints risk getting the sender banned by most reputable ESPs,
as well as their emails themselves being blocked from consumers inboxes by spam filters.
Some spam complaints are inevitable, even for the best-designed email marketing programs.
A consumer may erroneously believe that marking an email as spam is the most efficient way to
unsubscribe from a list. They may experience negative emotions about a specific message, marking
the email as spam as a result. However, in an effective email program, spam complaints are min-
imal. The complaint rate, also called the spam complaint rate, is the percentage of recipients of a
given email who mark the email as spam. This should typically fall around 0.1-0.3% for an email
program with effective list hygiene and well-designed messaging." If the complaint rate is higher
than a single percentage point, the brand risks being banned. Some ESPs bar users who garner over
0.5% spam complaint rates."
Complaint rates above 0.5% can indicate a range of addressable issues:
1. Creative and content issues: Limited use of branding elements in email design, such as small or
missing logos, may be confusing subscribers, making them unable to identify an email's sender.
Frequent changes in design may also confuse users into believing they are not receiving email
from a trusted sender.
2. Limited list hygiene: A subscriber list that is infrequently updated can result in subscribers
receiving emails that they no longer wish to receive. Recipients may no longer remember that
they subscribed to a list, thus marking it as spam.
3, Lack of segmentation: Emails that are sent to specific segments, with content tailored to the
needs of that segment, have higher engagement than unsegmented emails—those with the
same message for every consumer. Unsegmented emails may have content that is so irrelevant
to aconsumer that they do not recognize the sender and mark the email as spam.
4. Outdated subscription and onboarding practices: When a consumer joins an email list, they
should have options to self-identify their interests as well as their preferred frequency of
receiving messages. Each email should also have a highly visible link to unsubscribe, to prevent
users’ resorting to the spam complaint as a means to unsubscribe.”
As a metric, the complaint rate shows there is a problem with an email program. Managers
must gather additional metrics to identify root causes and courses of corrective action. Brands with
increasing complaint rates should conduct testing to identify the root causes of complaint rates.
Brands can test different creative to determine whether greater recognizability reduces complaints.
They can test different approaches to subscriber onboarding, to segmentation, and to list hygiene.
Together, the bounce and spam complaint rates are the two most important metrics for deter-
mining sender reputation. Sender reputation is a complex metric used by ESPs and email spam
filters to determine whether emails from a specific sender are legitimate. Sender reputation affects
whether an email will be filtered into a recipient's main inbox, into their promotions or other folder,
or blocked entirely as spam. It can also, as we have learned, impact whether an ESP will even be
willing to send emails on behalf of a sender. Sender reputation is connected to the domain name
of the sender. For instance, if your web URL is errandcompany.com, and you send emails from
the address “info@errandcompany.com,” your sender reputation is the reputation of the domain
“errandcompany.com.” Many dedicated data tools will provide marketers with their complaint rate
information.
Unsubscribe Rate
Most users who wish to leave an email list do not initiate spam complaints. They simply unsub-
scribe from a list. A certain percentage of unsubscribes from a list is normal. Indeed, it can be a part
of effective list hygiene. For instance, imagine you run an errand service in metropolitan Boston,
catering to college students. Your service only runs errands for customers within ten miles of the
city. Many of your subscribers will move away after graduation, so they will naturally no longer be
able to use your services in their new cities. They would thus unsubscribe from your email mes-
sages. It is better if they unsubscribe than if your email list starts to have a high bounce rate as they
181
stop checking their college email addresses and their mailboxes fill. Unsubscri
bes keep lists up-to-
date, thus supporting other list health metrics.
Unsubscribe rates indicate issues requiring action when they are unusual for a brand
or
according to the benchmarked norms of an industry. As with many marketing metrics, benchmark-
ing is critical for putting the unsubscribe rate into context, allowing for accurate interpretation of
the data. Benchmark data shows that, across industries, the unsubscribe rate for an average email
is 0.17% according to the leading ESP, Campaign Monitor" while the conversion optimization firm
OptinMonster has found the average rate to be 0.2% or lower."! However, as our errand company
example shows, businesses that cater to changing populations can see higher rates.
In addition to measuring the overall health of an email marketing program, the unsubscribe
rate can monitor sentiment for specific campaigns. Higher than average unsubscribe rates for a
campaign can indicate that the campaign was perceived negatively by its recipients. For example,
what if your errand company sent a campaign featuring a controversial sports celebrity. Though
popular with some fans, your spokesperson is viewed as unsporting by some detractors, who
question their aggressive playing. When you first sent the email featuring your influencer, you
believed that the email was uncontroversial, even though it had a photo of this controversial player.
Other metrics did not indicate controversy: Your social media sentiment remained positive, you
received few negative comments on social channels, and your sales were steady. However, the email
triggered a 3% unsubscribe rate—an extremely high percentage of your consumers asked to be
removed from your mailing list after seeing the email. Would you say that the controversial player
may have led to negative sentiment about your brand?
Because typical email unsubscribe forms collect little qualitative data, they can indicate con-
sumer sentiment but are not fully indicative of sentiment alone. Let's think again about your email
promotion featuring the controversial sports celebrity. It looks at first as if seeing that person led
many of your consumers to leave your email list. However, when we look at other data about the
high unsubscribe rate, a fuller picture emerges: The email campaign launched in late June. Remem-
ber, your company caters mainly to college students. Many of your customers unsubscribe when
they graduate and leave the region. Comparing your unsubscribe rate for this June campaign to
those of prior years, you find that your unsubscribe rate peaks every year around graduation. Last
year’s unsubscribe rate in June was 2.5%. The rate is still higher this year. However, it is not as dra-
matic a datapoint as it would be taken out of context. As is the case with much marketing data,
the unsubscribe rate must be interpreted in context; this context includes historical organizational
data.
When unsubscribe rates do climb, marketers should first look at historical rates, looking for
seasonal or other cyclical variation. They can also look at data from multiple sources, such as social
media metrics, web analytics data, and search data, to indicate shifts in consumer preferences,
brand reputation, or campaign effectiveness. An unsubscribe rate peak may indicate a larger trend,
such as shifting product demand, increased competition, or changing consumer sentiment about a
brand. For instance, subscribers may unsubscribe from an email list focused on SUVs at the same
time consumer interest in fuel-efficient vehicles increases. Marketers leading digital efforts for an
SUV brand can look at search data, finding that searches for “SUV” and related terms dropped by
35% during the same time period that their email list saw a 1% unsubscribe rate. This indicates
not a problem with the email program, but a shift in consumer demand. At the same time, the fol-
lowers of a leading electric sedan on Instagram grew by 300%. A proactive marketing team, seeing
this unsubscribe rate in context, would see it as an indicator of larger industry shifts. Rather than
focusing too much on optimizing their email promotions, they would instead use this data to focus
their product development efforts, creating more sustainable vehicles to meet changing consumer
requirements.
Sometimes, however, a high unsubscribe rate really does indicate that a specific email did not
resonate well with consumers. In such cases, marketers can course-correct by testing new creative.
sub-
By testing different messages, segmentation, and design approaches, brands can re-engage
scribers. We'll learn more about testing later in this chapter.
Churn Rate
The churn rate is the rate at which an email list changes its membership over a year. Up until now,
churn rate
we have talked about measuring how many new subscribers join an email list, and we have exam-
The rate at which an email
ined how many subscribers leave a list. The net result of all joins and unsubscribes is the churn
list changes its
membership over a year. rate. Generally, a churn rate of 50% is typical, according to the email marketing firm Return Path."*!
While list growth is paramount, marketers do need to monitor their churn rate. Very high
churn rates may indicate that a product has only short-term demand among its current consumers
or that demand is seasonal. It can indicate an unstable market, such as for a commodity product,
which consumers buy on the basis of price alone. It can indicate a transient audience for a local
good or service. It can also indicate weaknesses in the marketing program itself, such as emails that
do not engage users. Looking at other metrics in conjunction with the churn rate can paint a fuller
picture. For instance, if unsubscribes are most common when an email subscriber first joins the list,
that may be an indicator that the emails themselves are unengaging or even offensive to readers. If
churn coincides with an uptick in marketing activity, it could indicate that emails are becoming too
frequent, especially if the same target market is also seeing messages on social media, pay-per-click,
and banner advertising. If a specific target segment is churning at a higher rate than the list aver-
age, this can be an indicator that the brand, messaging, or offers are a poor fit for that segment.
Finally, economic data can indicate reasons for churn. If a market for a product has become volatile,
the churn rate may be part of a larger set of indicators showing a greater need to build a stable cus-
tomer base. On its own, the churn rate can only tell us that subscribers are joining and leaving the
list, not their reasons for doing so.
FIGURE 7.3 Email List Health Metrics
List health
metrics
Bounce Unsubscribe
Churn rate
rate rate
Reconversion and Re-Engagment Rate

Not all consumers who unsubscribe from a list are lost to a brand forever. Many consumers unsub-
scribe from lists when the need for a one-time or seasonal purchase has passed, only to re-engage
with a brand's emails when they have a new need for its products. Consider a crafts store, Franny’s,
Every Halloween, they see significant growth in their email lists, as consumers sign up to receive
coupons, design ideas, and inspiration for their homemade Halloween costumes. Because a large
portion of Franny’s customers only makes things during certain holidays, these subscribers often
unsubscribe after Halloween. They are replaced by consumers preparing for the holidays, who sign
up for holiday gifting, decorating, and homemade present ideas. And then, come J anuary, these
sub-
183
scribers also leave. This is a typical list churn triggered by seasonality. Franny’s marketing team
views this as normal, though they would prefer if consumers stayed on the list year-round. After
all, they reason, people should be doing more creative activities.
When a lapsed subscriber re-joins a list, they are said to have reconverted. While some email
lists see little reconversion, some, such as those that promote products purchased infrequently,
see significant reconversions. Markers should all measure their reconversion rate periodically, to
determine their long-term relationships with subscribers. Marketers with seasonal, infrequent-
purchase, or durable-goods businesses should closely measure reconversion rates as a key metric of
customer loyalty.
Sometimes readers do not unsubscribe from an email list; they simply stop opening emails. re-engagement rate
When this happens, a subscriber is classified as inactive or not engaged. Inactive subscribers are The percentage of inactive
easier to re-engage than those who have unsubscribed entirely. While not every business sees subscribers who open an
active reconversions, most companies have many inactive subscribers on their email lists. Nearly a email after a period of
dormancy.
third of subscribers on the average email list are not engaged.” The re-engagement rate measures
the percentage of inactive subscribers who open an email after a period of dormancy. This metric
can have different definitions according to the context of a company’s email program. The largest
variance is in how a marketing department defines a “dormant” email subscriber. Generally, a sub-
scriber who has not opened any of the last three email campaigns is often considered inactive;
however, frequent email senders may define dormancy by time, calling a subscriber inactive if they
have not opened any emails for three or six months.
7.4 A Closer Look: Shopping Cart

Abandonment Campaign
ttpsisees
company, Green-
Sawyer Nowak has a challenge, or at least he thinks he does: His home decor
of all the visitors who add
Houses, has a shopping cart abandonment rate of 60%. That means that,
purchase. Sawyer feels his
items to their shopping carts, 60% leave the site before completing the
research that finds the aveiase shopping
number is high, though they have seen benchmarking
than average,” says Sawyer to
cart abandonment rate to be upward of 70%. “We want to be far better
his new email marketing consultant, Bradley Groves. “How can we get more shoppers to complete
their purchases?”
“One key way to engage shopping-cart abandoners is through email,” says Bradley. “We can
send any consumer who leaves something in a shopping cart an email, with an image of the prod-
uct. The emails can include a fun message to remind shoppers of what they risk missing. For
example, if someone abandons a cart with seating products such as chairs or sofas, the shopping-
cart abandonment email can say ‘Hey! Are you going to just sit on the ground?’ That way, the
message is engaging without being too aggressive.”
“I like that!” exclaims Sawyer. “Let's give it a try. What happens after someone receives this
shopping-cart abandonment email? Do they just get that one reminder? Do they get dropped from
the email list if they still don't buy?”
“Not at all” Bradley says. “If they make a purchase, they receive the usual follow-up emails: one
telling them their order is being processed, another with the shipping information as soon as it’s
processed, then another after the product is delivered with a customer-satisfaction survey. If they
don't make a purchase, they'll receive emails featuring different products in the same category as
the one they abandoned, plus other items, in case they truly want some other home decor item
entirely. For instance, if they abandon a shopping cart with a Victorian-style chair, they'll receive
emails with chairs in other styles, such as modern. Those emails will also include other furniture
items, lamps, pillows, and other options, to maximize the chances of showing consumers what they
need. Purchasers also receive follow-up email marketing with related items—throw pillows, for
instance, if they just bought a couch from us.”
“So youre really going to show consumers lots of options, giving them multiple product offers?”
asks Sawyer.
“We are. Plus, we include discount codes, in case consumers are price-sensitive,” adds Bradley.
“That's a complicated series of emails. How are you going to track all of that?
“With the right marketing automation system, we will be able to tell what leads a consumer to
buy as a result of our messaging. By tracking what messages they open, what products they click
on, and what offers they redeem, we eventually develop a full picture of each customer's needs.
Then, we send them ever-more target products and offers automatically. This will cut down on the
number of shopping carts that are abandoned, as customers get to the products they really need
more quickly.”
“That sounds like data-driven automation will be a time-saver for consumers, while allowing
us to make more sales,” says Sawyer.
“Exactly,” notes Bradley. “By looking at the data, we can get the right product to the right cus-
tomer, reducing the number of abandoned shopping carts while having more satisfied buyers.”
7.5 Advanced Email Metrics
By now, you should have a strong idea of the basic metrics around an email campaign. You also now
know about the importance of monitoring list health. In this section, we will take a deeper dive into
advanced email metrics. Well examine sophisticated measurements that help optimize email mar-
keting campaigns, as well as advanced metrics specific to marketing automation.
185
Subscriber Metrics
Marketers market to people. Even in B2B marketing, it is individual business decision-m

akers who
view marketing messages, including emails. Thus, when measuring the success of an email
market-
ing program, teams must focus on subscribers to an email program to fully measure its impact
on
ROI.
Marketing automation personalizes marketing messages for each subscriber. If subscriber
metrics are key to any email marketing program, they are the core metrics for a marketing automa-
tion program. In marketing automation, each subscriber receives a tailored message, thus render-
ing the concept of a single email campaign less relevant. Instead, marketers look at metrics related
to how each subscriber engaged with the customized messages they received.
Most email service providers allow users to click on a subscriber's name and see the following:
+ How many emails they have opened and their overall open rate as a percentage
¢ The exact emails they have opened
+ The exact links on which they clicked, along with the time at which they clicked, and if they
clicked multiple times on the same link
¢ What emails they forwarded and to whom
¢ What times of day they read emails
Marketing automation platforms provide this data, along with data on consumer actions taken
after the email click, such as website visits. Subscriber data provides valuable insight into a specific
consumer's interests, preferences, and habits. In addition, by segmenting subscriber data according
to marketer-defined segments, this data can provide aggregate data on the behavior of any given
target segment.
Opens by Subscriber
Open rates can be measured by subscriber. At the most basic level, this data can provide insight
into the types of subject lines most interesting to a given consumer. This data, in turn, highlights
the consumer's interests, buying habits, and product preferences. For instance, let’s say you make
nail salon supplies. Your mailing list for your company, Darling Nailart, consists of nail salon own-
ers, buyers for larger chains of salons, and independent nail technicians. You have a loyal subscriber
in Nancy, a salon owner. She has opened 70% of your last twenty emails. On the other hand, Chad,
an independent nail technician, has only opened 5% of your last twenty emails. Which subscriber
do you think is more likely to open your next email? More importantly, who do you think is more
likely to purchase from your company, recommend your brand, or follow your accounts on social
media? Tracking opens by subscriber allows brands to identify their most engaged readers, target-
ing them for special offers or other unique messaging.
When it comes to marketing automation, tracking opens by subscribers is

even more important. Typically, marketing automation programs include emails
sent in sequence. A consumer may receive their first email when they sign up for
a special offer. If they open that email, click on the link to get the offer, and make
a purchase, they will receive emails about the benefits of the product they pur-
chased, invitations to join a brand's online community, and deals on related
products, all in sequence. If, however, they do not open that initial special offer,
they will receive a different set of follow-up emails: They may get another email
resending the same offer, in case they missed the first one. They may then receive
F
a range of different offers, with the goal of testing to see what offer will induce
them to open an email. Eventually, if they do not make a purchase, they will be dropped from the
email list as an inactive subscriber, an essential action for list hygiene.
Clicks by Subscriber
Another way to measure email or marketing automation on the subscriber level is to track clicks by
subscriber. This metric measures the number of clicks engaged in by any given subscriber. Taken
in aggregate, this shows us how engaged a subscriber is with the messaging they receive. Broken
down by what links the subscriber clicks on, it can tell marketers what specific topics, offers, and
content engage each subscriber the most. This enables better targeting of a given consumer, as well
as allowing marketers to detect new segments more easily. For example, let's go back to Geraldine
Trent, Chloe Amador, and their band, Carpet. As you recall, Geraldine created a segment she called
“super-fans,” which included regular show attendees, those who made any purchase, and regular
email readers.
By tracking clicks by subscriber, Geraldine gradually notices a pattern among certain sub-
scribers: They open all the band’s emails but never attend a concert. This is a pattern Geraldine did
not expect, but it makes sense: Some fans are unable to attend. Digging a little deeper into the email
list data, she finds that most of the fans who fit this pattern live out of state. However, she sends
out an email to learn more about the fans who open emails yet don't attend shows: A significant
percentage live locally and are prevented from attending because they are under 21 or use a wheel-
chair or have other mobility issues and cannot access handicap-inaccessible venues. Knowing this,
the band are appalled that fans have been kept away because venues are only friendly to typically
abled fans. They vow to play only accessible venues; they also aim to play more 18+ venues for the
sake of younger fans. By mining click by subscriber data, the band is able to treat their fans better,
building greater loyalty.
Performance by Segment
Segmentation is key to effective marketing. Different market segments have varied interests, focus
on different needs, and respond to different messaging. Digital marketing in general offers the abil-
ity to customize messages to specific segments. Channels that reach individuals directly, such as
text and email, are the most personalizable marketing platforms. Consumers expect the messages
they receive on these channels to contain messages uniquely relevant to them; after all, these mes-
sages are addressed directly to them.
behavioral segments Email marketing is also very simple to target by segment. Most email service providers allow
A customer segment subscribers to opt in to specific lists. Email marketers can create lists of all consumers in a particu-
based on customers’ lar pre-defined segment, such as consumers within a certain income range, with the click of a
behavior rather than other
button. In addition, they can automatically create behavioral segments based on how users engage
factors such as
demographics or attitudes. with emails, such as a segment of all users who have opened a recent promotion. Because of email's
highly effective segmentation capabilities, many marketers incorporate segment analytics into
their email metrics programs. Measuring email performance by segment allows marketers to see
how well a given email campaign, offer, or message performed with a given segment. Moreover, it
also allows marketers to test how well a given promotional idea performs with a segment before
launching the same promotion on other channels. For instance, let's go back to Save the Dogs. Imag-
ine that you found that, although the average open rate for your email promoting your annual
fundraising dance event was 10%, people who own pit bulls opened the email at a rate of 20%. Bet-
ter still, owners of golden retrievers opened the email at a rate of 35%. Clearly, fans of certain dogs
are especially devoted to Save the Dogs. You decide to send an email only to these two groups, who
make up 40% of your email list. The results are strong: a 30% open rate with a 25% click-to-open-
rate (CTOR).
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Engagement and Conversions by Segment
Segments can vary widely in their engagement with any marketing channel. Tracking engagemen
t
and conversions by segment shows marketers which particular target segments are engaging
most
with email messaging, converting at the highest rates from emails, and generating the most ROI
from email marketing efforts. In addition, marketers can track which specific messages or message
sequences created the most conversions for any tracked segment.
Knowing conversion activity by segment is often more valuable than tracking aggregate con-
versions. It's critical for marketing automation, as it enables greater personalization of messaging,
sending consumers just the right messages in sequence that have proven to encourage conversions
in consumers with whom they share demographic, psychographic, or behavioral similarities.
Segment Growth Rate
We talked earlier in this chapter about list growth rate as an important metric. Many times, com-
panies are less interested in broad growth than in focused growth within key consumer segments.
Thus, tracking segment growth alongside overall list growth is vital to measuring whether target
segments are joining the email program rather than less-relevant segments. For instance, let's go
back to Darling Nailart, our nail product company. They have decided that salon owners, rather
than independent technicians, are their key segment, as they make larger purchases. The com-
pany's email list is growing, which is good news. Even better news, however, is that the biggest
growth is among nail salon owners: The list is growing by 500 subscribers every week; the “salon
owner’ segment represents 430 of those 500 new subscribers. Thus, not only is list growth robust,
but it's aligned with overall company goals for specific segments to which they wish to market.
Revenue per Subscriber and Revenue by

Segment
Growing your audience among your most profitable segment, engaging that segment, and encour-
aging them to convert are all key metrics. They help companies understand how well-received or
not their message is with target audiences. Conversions by segment also provide some data on how
often target segments are buying or taking other desired actions. However, many marketers feel
that the most important segment data for marketing automation and email marketing is revenue
by subscriber. This measures how profitable email marketing is to specific groups of customers.
Revenue by subscriber identifies the average revenue generated via email marketing or mar-
keting automation for each member of the marketing list. For instance, let's say Darling Nailart
makes $4 million in sales each year from their email efforts. They have 10,000 subscribers on their
list, to which they send both broadcast emails and marketing automation messages, such as an
onboarding sequence of style lookbooks and technical tips to each new customer. Their revenue
per subscriber is $400:
$4, 000/$10, 000 = $400
Remember, however, that Darling Nailart’s marketing strategy focuses on salon owners. They wish
to grow sales from salon owners. In this case, it makes sense to measure revenue by segment. Rev-
enue by segment is the net sales within a segment. In this case, marketers simply add the sales to
members of the salon owner segment to arrive at revenue by segment. There is no need to divide
by sub-
by individual subscriber, unless the marketing team wants even more specific data: revenue
scribers within a segment.
However, most marketers simply measure the total sales to a segment that originated with an
email message of any kind.
There are some challenges in measuring revenue per subscriber or per segment. One is attri-
bution. Most consumers today see scores of marketing messages a day. They will likely see several
messages, on multiple channels, from a company with which they do business. For instance, Dar-
ling Nailart’s email subscribers often receive direct mail from the company, including catalogs,
postcards, and samples. They also follow them on social media. Even if they ultimately click on a
link in an email message to make a purchase, it's most likely that receiving a sample, or a mailing,
or seeing the company’s newest nail designs on social media influenced the purchase. Thus, with
the reality of multichannel marketing, attributing a conversion to any one channel is challenging.
Many marketing tools allow tracking of every touchpoint with a customer, tracking how often they
received samples in the mail, their social media habits, and other engagements with the company.
When calculating revenue per subscriber, generally, sales that originated with an email click are
divided by the number of subscribers to an email list, which can miss sales that were influenced
by an email message that occurred on another channel or, by contrast, over-count the role of email
in generating sales. Even with these challenges, however, revenue by subscriber does measure the
net sales in which email clearly played a key role. This measurement is valuable in tracking the net
contribution of email marketing to company revenues.
189
FIGURE 7.4 Email Subscriber Metrics
Subscriber Revenue per

metrics subscriber
Opens by Clicks by Performance Revenue by

subscriber subscriber by segment segment
Engagement
and conversion
Segment —
growth rate
7.6 Marketing Automation Data

Increasingly, brands are using marketing automation to reach customers, keep leads engaged, and
understand the needs of their customer segments. Marketing automation tools are software that
allows a brand to automate different activities in a personalized way—for instance, sending dif-
ferent emails automatically to customers who purchase different products, or following up with
prospective customers who have expressed interest in a brand. If you have ever received an email
message, seen a website popup, or gotten a text message from a brand that seemed inspired by the
pages on their site that you had just browsed, that was likely a form of marketing automation. Tools
for automation allow thousands of a brand's consumers to each receive useful, targeted informa-
tion based on their actions or interests.
For marketers, marketing automation is a convenient way to increase the impact of messaging. triggers
It's also a wealth of data. All those emails, texts, and web traffic metrics provide specific informa- In marketing automation,
tion on each consumer, which grows every time that consumer engages in any message from the any action or milestone
that triggers an email
brand. Marketing automation campaigns are built around trigger. A trigger is any action or mile-
message or other
stone that causes an email message or other communication with a consumer to be sent communication with a
automatically. Suppose a client goes on GreenHouses website and views six pages related to light- consumer.
ing. The company already has the client in their customer relationship management system (CRM),
as they are a past customer. Now, the client has returned to the site, showing a strong interest in
lighting. In the marketing automation system, viewing more than three pages about the same type
of product is a trigger, meaning that an automated action will be deployed to target the consumer
who engages in the trigger activity. In this case, whenever a returning customer views more than
three pages about the same type of product, GreenHouses' marketing automation system will auto-
matically send them an email promoting that product. Thus, the customer who looked at six pages
of content about lighting will automatically get an email promoting lighting. As you may imagine,
this type of automation generates a great deal of data about individual customers. In addition to
generating rich data on individual customers, automation tools also provide ample aggregate data
that can be used in marketing strategy decisions. In this section, we will explore the different types
of marketing automation data and their uses.”
Individual Contact and Segment Data

One of the greatest strengths of marketing automation is that, if it is integrated with a CRM, which
most full-featured automation systems are, it collects detailed data on every contact in that CRM
system. When you send an automated message to a contact, the system will save data on the trig-
gers that led to the automated action, the response to that automated action, and the customers
subsequent actions. It can also track the customer lifetime value of contacts who engaged in spe-
cific trigger actions or responded to a given set of automated messages. For instance, let's go back
to the GreenHouses customer who browsed those six pages about lighting, then received an auto-
mated email promoting lighting. We'll call her Jill. She had been looking for some lights for her
new office. Once she received the automated email that promoted lighting products to her based
on her web browsing behavior, she returned to the GreenHouses website, purchasing their most
expensive chandelier. In the CRM system, the GreenHouses team can track all of Jill's actions. They
now know that she is interested in high-end lighting, responds to email promotions, and visits the
GreenHouses website infrequently, but makes large purchases when she does. This data is valuable
in understanding Jill as an individual customer.
In addition, the team can aggregate data about customers with the same behavioral patterns as
Jill to understand their customer segments better. Let's imagine they discover that consumers who
receive emails triggered by the number of pages on the website they viewed tend to make larger
purchases, but only if they are in the market for lighting, accessories, and small furnishings. They
can then use this data to build out customer segments based on product interests, then continue
tracking these behavioral segments to understand their needs and preferences. In addition, many
marketing automation systems allow marketers to upload their personas, or their profiles of spe-
cific types of customers. They can then track the behavior of different customers to build a better
persona, one built on evolving data. For instance, let's say that Jill most closely resembles Green-
Houses’ Savvy Shopper persona. The marketing team sees their Savvy Shoppers as cost-conscious
buyers who nonetheless will spend on luxuries if they are long-lasting. By watching the responses
of Jill and other customers who correspond to this persona to automations, they can learn what
specific luxury items they are willing to buy.™! This can lead to more effective personas, and, indeed,
the development of entire new personas based on incoming data.
Marketing automation data, when paired with CRM data, can lead marketers to a deeper
understanding of customers, both individually and across different groups. It can provide brands
with data that can lead to higher customer lifetime value (CLV), better segmentation, and a closer
relationship with individual customers.
Lead Conversions
One key metric that every brand needs to measure is the number of leads generated. Leads are
prospective customers who have contacted the brand in some way, from attending an online work-
shop to filling out a form online for information.
Leads can be tracked by their source, for instance, whether they originated as a workshop
attendee, called the company after finding them online, filled out a form, or some other form of con-
tact. Knowing the source of leads is important because brands will want to invest in those channels
that are delivering the most leads.
191
‘iii
‘ilu
CONVERSION RATE
In addition, leads can be tracked by how many of them convert, or make a purchase or become
lead nurturing
a Customer, in response to different lead nurturing activities. Lead nurturing is the activity of com-
municating with leads in an effort to get them to become customers and is often partially The activity of
communicating with leads
automated using marketing automation. For instance, leads may get emails a week after their ini- in an effort to get them to
tial contact with a firm, showcasing the company's past successes. A week later, they may become customers.
automatically receive follow-ups, inviting them to a web workshop, if they haven't converted by
that time.’
This conversion rate is important to track because it measures the impact of different
approaches in getting prospects to become customers. For instance, if all of a brand’s recent cus-
tomers converted after a web workshop, then it's worthwhile to conduct more workshops rather
than running more ads that target them after they visit the website. If, on the other hand, the
most effective lead nurturing activity is a phone call followed by three emails, then the marketing
automation data will prove that. Marketing automation data in a properly configured system
tracks every engagement with a prospect. Thus, brands can readily track the specific activities that
convert leads to customers.
Marketing Automation Trigger Metrics

As we learned at the beginning of this section, marketing automation depends on triggers. For
instance, let's return to our friends at Darling Nailart. The brand can set up a trigger to send an
email after one week to any client who places an order. The email contains a satisfaction survey, as
well as tips on how to use the specific products the consumer purchased. Another common trigger
is aconsumer's birthday; companies typically send discounts on that date to any subscriber.
Performance by Message Trigger
Setting up marketing automation campaigns can be time-consuming, so it's important to track

which triggers create value and which do not. Tracking performance by message trigger can take
many forms. Performance first must be defined. It can be defined as any conversion, a revenue-
generating conversion, such as sales, or revenue itself. Once the most important performance
is defined, marketers can track which message trigger generates the most impact. For example,
perhaps birthday coupons generate more immediate sales, but email follow-ups to a sale with add-
on product recommendations build a more lasting relationship with a customer. If performance
is defined as sales, the birthday message trigger is higher-performing than the sale follow-up.
However, over time, sale follow-up triggers produce greater revenue. Measuring performance by
message trigger often first involves identification of organizational performance goals, defining
, : hs)
success as immediate sales, for instance, versus long-term customer value.
Segment Preferences by Message Trigger
Message triggers also differ in their impact on specific consumers. A birthday coupon may generate
many sales among new customers, while a longer sequence of tips and training videos, sent ina
email or text, may be more effective with long-term clients. Measuring the impact of a message trig-
ger with a specific customer segment allows optimization of triggers and sequences for maximum
alignment with customer needs. As with any measure of performance, the first step is to define per-
formance. In addition, to compare performance of one segment against another, the definition of
performance must remain consistent for each segment.
FIGURE 7.5 Message Triggers
Marketing
automation
trigger metrics
Segment
Performance by performance
message trigger by message trigger
7./ Message Testing and

Optimization
When it comes to measuring marketing performance, we typically measure in order to improve.

Think of marketing as a race. Brands are competing for consumers’ attention, for market share, and
for some of consumers’ spending. If you run competitively, you measure your race times, not to
congratulate yourself, but to see how to do better next time. If you play a team sport, you know
that the score for any game only tells you so much on its own. It's up to you, your teammates, and
your coach to examine how well you played, so you can play even better in the next game. That is
how marketing analytics works: You look at the “score,” at the numbers, in order to gain guidance
on how to do better each time. You also need to interpret everything you learn skillfully, in order to
turn insight into improvements.
Fortunately, in marketing, there is another way to collect data on what works, and what does
not. It allows marketers to test different approaches in order to find the best ones. Imagine if,
instead of just running each race as best you can, you could try different approaches simulta-
neously, to see which made a difference in winning a race? What if you could try two different
warmups for instance, under identical race and personal conditions, in order to see which helped
you gain the most speed? That is what marketing testing and optimization does. It allows mar-
keters to test various approaches under controlled conditions, in order to gather precise data. In
this section, we will learn about email testing and how it helps emailers collect accurate data. By
the end of this section, you will be able to do the following:
1, Articulate the importance of testing to successful digital marketing, and especially to email
marketing.
2. Differentiate between A/B and multivariate testing.
3. Explain which testing approach is most appropriate to meeting a given data-collection goal.
4. Understand the importance of testing multiple elements of an email program to ensure per-
formance.
A/B Testing
Sometimes, email marketers have a clear set of alternatives for which they wish to determine effi-
cacy. For example, let's go back to Save the Dogs. After the relative success of your fundraising
campaign, you still have questions. Remember, you sent a fundraising email to over 10,000 people
who had donated before to the charity, with only 1,800 of those people opting to open the email.
Those who opened clicked to donate or adopt in large numbers, so you know that the contents of
your emails are effective once someone reads them. The challenge for you is to get more donors
to open your emails. You have a theory: Sometimes, when you send out an email with an animal's
name, the response is very strong. Last month, for example, you sent out an email with the subject
line: “Will You Give Charlie a Chance?” In it, you told the story of a bull terrier, Charlie, who awaits
a home. He was immediately adopted. Importantly, the email itself had a 45% open rate, a full ten
percentage points higher than your typical email, which averages opens of 35%. You glance through
fifty of the last emails you sent: Overall, emails that use an animal's name in the subject line have
been getting some of the highest open rates. However, other factors may be at work. You realized
that you often send these more story-driven emails later in the week, when you are feeling particu-
larly creative. Perhaps it was the day of the week, the list segment to which you sent the emails, or
some other factor that led these emails to be opened so frequently.
Q
wishpond
PART 6
A/B Testing
Email Marketing
Campaigns

With A/B testing, you can isolate a single variable and test its impact under controlled condi-
A/B testing many
tions. It is effective for many types of marketing creative; it’s a core data-gathering feature of
Testing any marketing
email marketing platforms. Rather than wondering whether a specific style of subject line is effec-
materials, such as emails,
tive, for instance, you can test two variant subject lines under controlled conditions, determinin g
by testing two variations of
the same variable, such as which is more effective.
two versions of the same
email subject line.
A/B testing
In an A/B test, marketers first determine what element of an email to test. They can test the
subject line, calls-to-action within an email, offers, or any other factor. The important thing for an
A/B test is that only a single element is tested at one time. Once the element to be tested is identi-
fied, marketers must form a hypothesis to test. The hypothesis must be a theory that an A/B test
can prove or disprove. In our dog-rescue case, the hypothesis is that subject lines containing pets’
names engender higher open rates than subject lines that do not have a pet's name at all.
Once the hypothesis is defined, email teams must create two variants that accurately reflect
the question being tested. One variant, the test variant, contains the feature being tested. The other
variant, the control, lacks the feature. In this way, that feature can be identified as the one thing
that was different between the two email variants. For instance, if testing whether emails with
an offer as the main graphic perform better than those featuring product images, marketers may
design one email with a large “40% off” coupon at the top of the email and one with an attractive
photo of a best-selling product in the same location. Those two designs accurately reflect both the
“with prominent offer” and “with prominent product photo” conditions.
For our rescue, you might write one subject line that features a dog’s name, such as: “Meet
Phoebe and Learn Why She's Becoming a Therapy Dog.” To test whether this subject line is more
engaging than one without a pet's name, you will write a control subject line—that is, a subject line
without the feature of a pet's name. This subject line might say something like: “Find Out About
the Therapy Dog Program.” Notice that this subject line also mentions therapy dogs, just without a
personal name. It’s important that the control creative be as close to the test creative as possible, so
that testers can truly say that the test variable was the only differentiating factor between the two
emails.
195
FIGURE 7.6 A/B Testing
Determine Create two

Form
variants Analyze
element to hypothesis
test yp ) (control and results
test group)
Multivariate Testing
Testing only two factors at a time can isolate a specific message factor that stands in strong con-
multivariate testing
trast with other options, such as comparing a serious subject line with a humorous one. As we've
learned throughout the book so far, however, marketing promotions often work in synergy. An Testing any marketing
materials by testing
email campaign may be more effective when it coincides with print ads in popular media and an multiple variations and/or
Instagram ad campaign. A TV campaign may be integrated with Facebook videos and an in-store multiple elements.
augmented reality event. Even within a single marketing message, different factors work together
to create impact. Thus, many marketers wish to test several factors in an email at once to gather
more nuanced data on what email features perform best. This type of data-gathering is
multivariate testing.
Multivariate testing allows for testing several factors in an email or other marketing creative at
once. For instance, Save the Dogs could test combinations of subject lines, images inside an email,
and calls to action. They can test a subject line that mentions a pet's name, Charlie, along with a
photo of just the pet, and a call to action that says, “Donate Now.” They can then test that same sub-
ject line, but with an image of the pet with several other animals, playing, and a call to action that
says, “Help Charlie and His Friends.” The team can try multiple combinations of text, images, offers,
calls to action, and any other feature. They can also test multiple factors with different segments.
With multivariate testing, marketers can collect data on more factors quickly, as well as understand
the interactions between different factors for email success.
One challenge with multivariate testing is ensuring that enough recipients receive each vari-
ant to gather statistically significant data. Statistical significance, in this case, means you can have
confidence in the data from your analysis. If your email list has only 1.000 members, and you con-
duct a multivariate test with twenty-five combinations of variables, then each combination will
only reach a maximum of forty recipients. That small sample size is unlikely to generate a statis-
tically significant result. The number of variables should be aligned with the size of the available
audience, in order to generate results in which marketers can have confidence. Logistically, the
more complex the test, the more complex it is to manage the testing process. Multivariate testing is
powerful. Tests designed thoughtfully can generate data that cannot be found in other ways. The
keys to successful multivariate tests are careful project management, tailoring the number of vari-
ables to the scale of the audience, and having a clear set of key performance indicators (KPIs) for all
tests.
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7.8 Do the Math: Revenue by

Subscriber
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mah Vt Ves Fa camgeny has mage & mailion im sales from email as measured by last-click
NEST, Ging That VV Mrargna IS Ww, then theit net rewenue from email is $500,000.
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This company has 20,000 on their email list. For this metric, we specifically want to include all sub-
scribers, including inactives and those who have not made a purchase. The reason is that revenue
by subscriber aims to measure the overall ROI of the entire email program. With 20,000 people gen-
erating $500,000 in sales, our revenue per subscriber is $25. This can be an indicator of many things.
Perhaps too many subscribers are inactive. Perhaps promotions are driving consumers to make
smaller purchases. Further analysis using the techniques outlined in this chapter will reveal the
underlying causes. Importantly, the marketing team now knows that email marketing ROI needs
improvement. As a diagnostic tool, revenue per subscriber is efficient and ROI-focused.
7.9 Conclusion
Email marketing and marketing automation drive much revenue. They allow direct, measurable,
and tailored engagement with consumers for both B2B and B2C companies. Email and direct mar-
keting are highly measurable, with a range of metrics on the subscriber, campaign, and program
levels.
¢ Tracking basic email and automation metrics such as open rates indicates the number of con-
sumers interested in a company's messages and offers. They can be measured by campaign or
the individual email-opening patterns of given subscribers or subscriber segments can be ana-
lyzed.
- Email list growth is a critical metric. Most importantly, marketers measure list growth within
key target audience segments.
- Email program health metrics measure the quality of an email program: its perception as a
valuable messaging channel rather than spam, subscribers’ ongoing interest in receiving mes-
sages, and the quality of the underlying email address database. All of these factors influence
email service providers’ willingness to transmit a company's messages, making them essential
data to track.
Message triggers are conditions that lead to the sending of an automated email or other mes-
sage, such as an abandoned shopping cart. Metrics related to marketing automation include
performance by message trigger and segment performance by message trigger, which both
track marketing automation’s impact on any marketer-defined KPIs.
» Measuring email effectiveness requires testing. Tests gather data on the desirability of certain
creative elements, offer types, and target audiences. Testing can be A/B or multivariate. Both
offer varied advantages.
ee
1. Name three basic email marketing metrics, along with their primary uses.
2. How are open rates typically measured? What are some of the limitations of that measure-
ment method, from a technical standpoint?
3. What is meant by unique open rate? How is it different from open rate? Why would it make
sense to track both metrics? What is the difference between click rate, and click-to-open
rate? What are the advantages of using one over the other?
4. What can unique open rate tell us about subscribers?
5. In email marketing, what is a bounce rate? What are the two different types of bounces?
Why do we track them separately?
6. How can marketers track list growth?
7. Why are list growth metrics important? Are they important for marketers to track in managing
the day-to-day operations of an email program, important for reporting the success of email
marketing to management, or both?
8. Ifa list is not growing, is that always a sign of poor performance in an email marketing cam-
paign? Why or why not?
9. What is another word for the complaint rate? Why is this metric important? If this metric is
high, is that a sign of an effective or of an ineffective email marketing program?
10. Contrast the churn rate and the unsubscribe rate. Can marketers measure only one of these
two metrics? Why might they measure both?
11. How do marketers typically re-engage with lapsed subscribers? How can measuring the
re-engagement rate help with engaging subscribers and help increase conversions from
existing contacts?
12. Why does it make sense to measure email metrics by segment? Give some examples of
segments that you would measure in an email marketing program.
13. Name some examples of message triggers in marketing automation. Why would you mea-
sure each trigger independently?
14. Explain the difference between A/B and multivariate testing. When would you use A/B test-
ing? When would you opt for multivariate tests?
15. Why does it make sense to test email marketing with different segments?
16. What are some of the factors to consider when designing a multivariate test?
17. You have just been hired as the email campaign manager for SnackSafe, an allergy-friendly
food delivery app. Your goal is to increase the number of times users order from your ser-
vice each week. You would like to explore list segmentation, so you divide your list by allergy
(peanut, dairy, gluten, and other), location (one segment for each major district or neighbor-
hood in your city) and the current frequency of usage. You send targeted messages to each
segment. How will you measure whether your strategy is successful overall? How will you
measure which segment is the most successful?
18. You created an app that allows you take a picture of anything: you, your pet, even a plant,
and turn it into an animated video with fun filters. In the first month, you get one million down-
loads, but next month, a competitor has emerged; downloads are slowing. You have email
addresses for all your users and decide on a re-engagement campaign. What metrics will
you use to determine whether your efforts are successful?
19. You run a calendar site that helps fans of your favorite musical style find affordable concerts
within a twenty-minute radius of their homes. Some of your customers seem to only care
about cost, while others are more interested in location, and some follow only certain bands.
Still others have a mix of these needs. You decide to test different messages to these differ-
ent users. You do not currently have any segments set up for your list. What testing methods
would you use to gather data on your consumers’ preferences?
20. You have been running a subscription service for over a year that sends skateboarding gear,
with the option to purchase, once a month to users. Your email program focuses on tips on
how to use the new gear, along with interviews with well-known skaters. From these emails,
users can add additional products to their subscription box, or make a one-time purchase.
Your boss wants to know whether these emails are generating any revenue. What will you
tell her? Are there metrics that tell you what revenue an email program has generated? If so,
what are these metrics? How do you calculate them?
. Santora, Jacinda. “10 Proven Ways to Reduce Email Unsubscribe Rates.”

OptinMonster, April 15, 2019. https://optinmonster.com/10-proven-ways-
Endnotes to-reduce-email-unsubscribe-rates/.
10. “Email Benchmarks: Almost Half of New Subscribers Churn Within a Year.”
Marketing Charts, November 28, 2018. _ https://www.market-
ingcharts.com/digital/email-online-and-mobile-106603.
. “What Is a Good Unsubscribe Rate?: Email Marketing.” Campaign Mon-
itor, 2021. https://www.campaignmonitor.com/resources/knowledge-
. Johnson, Joseph. “Daily Number of E-mails Worldwide 2025.” Statista, base/what-is-a-good-unsubscribe-rate/.
April 7, 2021. https://www.statista.com/statistics/456500/daily-number- . Wainwright, Corey. “The Metrics You Need to Measure Marketing Automa-
of-e-mails-worldwide/. tion Effectiveness.” HubSpot Blog, April 15, 2021. https://blog.hub-
. Moosend. “Top 10 Marketing Automation Statistics You'll Wish You Had spot.com/blog/tabid/6307/bid/3 1655/the-metrics-you-need-to-measure-
Known Earlier.” Email Marketing Automation Platform for Thriving Busi- marketing-automation-effectiveness.aspx.
nesses, April 27, 2021. https://moosend.com/blog/10-marketing-automa- 13. Kitova, Margarita. “Knowing What to Look for: Key Metrics for Evaluating
tion-statistics-need-know/. Your Marketing Automation Efforts.” DemandGen, August 4, 2017.
. “Email Open Rates.” Campaign Monitor, 2021. https://help.campaign- https://www.demandgen.com/knowing-look-key-metrics-evaluating-mar-
monitor.com/email-open-rates. keting-automation-efforts.
. “6 Ways to Reduce Email Bounce Rate & Improve Deliverability.” Ful- . Wainwright, Corey. “The Metrics You Need to Measure Marketing Automa-
crumTech, 2021. https://fulcrumtech.net/resources/email-bounce-back/, tion Effectiveness.” HubSpot Blog, April 15, 2021. https://blog.hub-
. ActiveCampaign. “How to Reduce a High Spam Complaint Rate.” Active- spot.com/blog/tabid/6307/bid/31655/the-metrics-you-need-to-measure-
Campaign Help Center, April 27, 2021. https://help.activecampaign.com/ marketing-automation-effectiveness.aspx.
he/en-us/articles/3600001 50570-How-to-reduce-a-high-spam-com- . Wainwright, “Metrics to Measure Marketing Automation Effectiveness.”;
plaint-rate. Kitova, Margarita. “Knowing What to Look for: Key Metrics for Evaluating
- “How Spam Complaints Work.” Campaign Monitor, 2021. Your Marketing Automation Efforts.” DemandGen, August 4, 2017.
https://help.campaignmonitor.com/spam-complaints. https://www.demandgen.com/knowing-look-key-metrics-evaluating-mar-
. Campaign Monitor, “How Spam Complaints Work.” keting-automation-efforts.
8. “What Is a Good Unsubscribe Rate?: Email Marketing.” Campaign Mon-
itor, 2021. https://www.campaignmonitor.com/resources/knowledge-
base/what-is-a-good-unsubscribe-rate/.
CHAPTER 8
Measuring the Web’s Data
Learning Objectives

1. Define basic web analytics metrics, such as visits, bounce rate, conversions, new versus
returning visitors, and unique visitors versus visits.
2. Analyze a dataset to determine effectiveness of marketing channels in driving traffic to a web-
site and the relevance of that traffic to a site’s business goals.
3. Define basic site visitor data, such as geolocation, and assess its importance to a website’s
effectiveness as a marketing tool.
4. Understand how to use metrics to determine user behavior and marketing effectiveness.
5. Translate site traffic data into insights into the efficacy of online and offline marketing chan-
nels in driving conversions.
6. Measure visitor engagement with specific website content, and apply those measurements
to an assessment of content effectiveness.
Every day, consumers around the globe access more than 200 exabytes (an exabyte is one billion
gigabytes) per second of web content.” All of this web traffic generates a wealth of user data. Search
engines and advertising platforms leverage such data to optimize revenues derived from selling
consumer data or ad placements. In the same vein, owners of any website can leverage or monetize
user data. For example, website owners naturally wonder who is visiting their websites, what users
do on the site, and whether some website visitors are more engaged than others. Figuring out the
answers to these and other questions enables companies to enhance products and services, refine
pricing and business models, and improve the effectiveness of their marketing strategies. Thanks to
increasingly sophisticated processes called web analytics, these answers and many others are read-
ily available to website owners.
8.1 What Is Web Analytics?

Web analytics, the practice of gathering data on website visitors and their behavior, processing it, web analytics
and using it to understand their behavior and attitudes, is one of the oldest forms of digital mar- The practice of gathering
keting analytics. Digital marketing analytics is the practice of analyzing data about digital data on website visitors
marketing: any marketing effort that takes place primarily online, including the web, on mobile and their behavior,
processing it, and using it
phones, or using smart devices such as smartwatches or speakers. It's also one of the most robust, to understand their
with free tools accessible to any site owner who wants to measure website user actions in extensive behavior and attitudes.
detail. Indeed, one of the main challenges facing marketers using web analytics tools is the sheer
overwhelming volume of content generated by default by web analytics tools. In this chapter, we
will learn what web analytics is, key metrics used in measuring site traffic, and ways marketers can
sort through the many web analytics reports generated to find insights for products, promotions,
pricing, and placement (the “4Ps’).
In this chapter we will first explore basic metrics, then go deeper in these simple metrics to
learn how to mine web analytics reports that often receive superficial treatment. We will also
demystify more complex reports that often go underutilized because they are insufficiently under-
stood. In doing so, we will understand how to apply web analytics data across the 4Ps. We will start
with basic analytics.
Google Analytics
In this chapter, many examples refer to Google Analytics, the web analytics platform provided free
Google Analytics
in one form by Google. This is because Google Analytics is the most popular web analytics platform,
The web analytics platform
provided free in one form
with more than 29 million websites using the tool.”
by Google. If you wish to try Google Analytics yourself, you can utilize a free Google Analytics Demo
Account, which presents live data, by following the directions at this link: https://support.google.
com/analytics/answer/6367342?hl=en,
oO
WHAT IS
oi GOOGLE ANALYTICS?
8.2 A Closer Look: Hats Off to a Great

Launch
Jeff Sharaf has always been interested in making. He learned to knit in his Montessori school as
a child, and by high school was making hats for himself and fellow snowboarders. After a unit on
the environmental impact of fabric his junior year, Jeff started making his hats entirely from upcy-
cled yarn, which he dyes bright colors. Soon, he was selling hats faster than he could make them.
His brand grew organically: He always wears his own designs when he competes in snowboarding
competitions, and with several regional wins this year, he has gained a lot of media coverage for his
snowboarding—and his hats. He has been getting a lot of media attention since he won a national
competition, with interviews in more than ten leading fashion blogs. “This could really turn into a
business, and maybe even help with college tuition,” Jeff tells his friend, Julianne MacHeath. The
friends build a website to take e-commerce orders. They wait for the orders to roll in—after all, they
had told several of their friends about the new site, posted about it on Instagram, and even put up
a flier in the campus center and at local eateries.
203
By week 3, they had one order, from Julianne’s roommate. Clearly, they needed to do more
to
drive traffic to the website. They decide to make a major effort to raise awareness of the site. They
write guest blog posts on popular snowboarding blogs as well as on fashion sites. They start a VSCO
account with snowboarding how-tos. They post twice a day to Instagram with photos of people in
the hats. They engage on snowboarding forums. They create a Google Ad, place interactive ads on
popular winter sport magazine sites, and send a coupon via text and email to members of local win-
ter sports clubs. Sales skyrocket in the coming months. By March, the hats are sold out. “All that
advertising, emailing, texting, putting up fliers and making videos worked!” says Jeff. “I’m feeling
hopeful about the future of this idea. But I'm also exhausted. It has taken twelve hours a day to
create all this content and get it in front of consumers, not to mention thousands of dollars. If only
there were a way to figure out which of these marketing efforts did the most to drive sales. We
could focus on those, making just as much revenue at lower cost, for greater profitability.”
“Good point,” says Julianne. “At the very least, it would be good to know how many people came
to the site from the email versus the ads, and from which ads. I'd also like to know a bit more about
who our web visitors are, where they're located, and whether they are interested in snowboarding
or some other winter sport. Do they come to our website often, looking around before making a
purchase? Or, do they see an ad, immediately click on it, and buy something right away? Knowing
all of that would help us better focus our hard work where it really matters.”
The team decides to look at the Google Analytics data for the site. Julianne had installed the
tracking code when they first built the site but had found the data confusing.
After taking a class on web analytics, Jeff and Julianne felt ready to dive into the data again.
They looked at overall traffic data; the number of visitors to the website increased by 578% after
they started their marketing campaigns. They found that most of the web traffic came from the
guest blog posts on winter sports sites, Instagram links, and Facebook posts. Almost no traffic came
from the email campaign, with even less from the text ads. Finally, although the snowboarding
forums sent traffic to the website, none of those visitors made a purchase. “It looks like your time
is best spent on blogging and Instagram, with some Facebook efforts,” says Julianne. “Based on the
data, those efforts did the most to get interested customers to the website.” They decide to focus
their efforts there, dropping the costly ad campaign.
Looking at how often visitors came to the site before buying, Julianne noticed that most sales
were to returning visitors—those who had come to the site before. They visited the site at all
hours of the day, with strong concentrations of visitors at lunchtime, in the evenings, and on week-
ends. Site traffic was also steady throughout the year, rather than being concentrated in the winter
months. Visitors were also located all around the world, with a surprising number in regions with
warmer climates, such as Southern California, indicating that people were purchasing the hats as
they planned winter trips or were wearing them as fashion accessories.
“Knowing all this data, we can not only focus our marketing efforts, but we can also under-
stand our consumers better” says Julianne. “For instance, we now know that Instagram and blog
posts are a great way for people to find out about us. We know people shop on their lunch breaks,
in the evenings, and over the weekend, often when they arent likely to be snowboarding soon.”
“That's good to know,” says Jeff. “Thanks to web analytics data, I really feel like we not only
understand how our website is working, but also how our customers behave. With this data, we can
serve our customers more effectively while being smart with our marketing budget.”
8.3 Basic Web Metrics
Many basic web metrics provide robust information on the overall results of a marketing cam-
converted
paign. They can reveal such data as the length of time visitors spend on a site, what pages they view,
Said of consumers, to take
any desirable action on the
how they found the site, and where they are located geographically. These metrics can also uncover
website, such as making a what percentage of users converted—that is, took any desirable action on the website, such as
purchase. making a purchase. These metrics form the core of most digital marketing reporting programs.
Web analytics, though centered on web traffic, are also a general-purpose data resource with
wide application across the 4Ps. A common myth among marketers is that web analytics can only
measure the results of digital marketing. This is simply not true. Web traffic is driven not only by
online efforts, but also by offline ones as well. Think about the last time you saw aa billboard or
a poster at a bus stop that piqued your interest. You may have decided to check out the product
advertised on your phone, or later, when you got to your computer. Offline marketing often leads to
increases in web traffic, and its contribution can be tracked by various means that we will explore
in this chapter.
Web analytics can also measure more than simply the success of promotions, whether online
or offline. It can also track consumers’ interest in products, their interests in specific brand attrib-
utes, or their awareness of industry trends. In this chapter, we'll start to learn more about how web
analytics helps us measure these important marketing datapoints. Throughout the chapter, we'll
pay attention to the 4Ps as we learn about the most basic, foundational types of web analytics data.
205
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i i
Traffic Data
The first question most brands ask when looking at their web analytics data is how much traffic
hit
their site receives. The answer appears at first to be simple: the number of hits to the site! In reality,
traffic data contains more complex nuances that make a big impact on how we interpret the A request to a web server
to send a file to a user,
amount of interest in a brand as well as the impact of marketing campaigns. To start our discussion often incorrectly used to
of web analytics, welll learn about the foundational data points related to web traffic. describe sessions.
Sessions
Most companies do start by measuring the number of visits to their site, a fundamental and
sessions metric
straightforward metric. The sessions metric is the count of visits to a website within a given time
The count of visits to a
frame. Such sessions may be of short or long duration, include many or zero actions—all sessions website within a given time
are included. In addition, multiple visits from the same user at different times are included in the frame.
sessions metric.
In the past, website sessions were called visits. In the early days of the web, they roughly visit
equated with requests to a web server to send a file to a user, also known as a server “hit.” As a result, An older term for website
some people erroneously use the term “hits” as synonymous with the sessions metric, although this sessions.
term is technically inaccurate. A single webpage consists of numerous files, all of which are
requested by your browser every time you visit a website; thus, your one visit necessitates many
server “hits.” However, the term “hits” came into use many decades ago, when webpages were sim-
ple enough to be contained in a single file. Thus, it is still common to hear the term “hits” used
within companies when sessions are measured, so marketers should be prepared to encounter it,
encouraging colleagues to use the correct terminology.
Measuring sessions provides marketers with a basic yardstick of the volume of traffic to a site.
A site with a million sessions a day is clearly more popular than one receiving only 100. As a data
tool for setting marketing strategy, the sessions metric allows marketers to do the following:
- Measure overall traffic to a site against benchmarks, diagnosing whether a site is receiving
strong traffic, too little traffic, or average traffic. This can help marketing teams determine
whether a brand needs to focus on driving more visitors to their site, if traffic is relatively low,
or work on converting more existing visitors, a strategy that may have higher ROI if traffic is
above-average.
Benchmarking this data requires experience on the part of a marketer. Though some
industry benchmark data exists, many times, the confidentiality of individual companies’
web analytics data means that such benchmarks lack accuracy. Knowing industry trends,
understanding the overall size of a brand's addressable market, and experience across a
wide range of brands within an industry give many marketers an estimate of what con-
stitutes average traffic in a sector. Whether derived from benchmark reports or direct
experience, measuring an individual site's sessions against expected traffic volumes can
determine whether traffic is sufficient to meet revenue goals.
Determine whether increased marketing efforts have resulted in growing brand awareness.
Generally, the higher a brand's recognition among consumers, the more sessions its website
will attract.
Assess whether a specific marketing campaign has reached consumers and inspired them to
action. This is especially true for measuring offline marketing programs, such as print media.
Digital marketing campaigns’ effect on web traffic can be measured directly, tracing visitor
clicks back to the exact online channel, and indeed the precise advertisement, that encour-
aged a viewer to visit. While measuring sessions can also trace digital marketing’s effectiveness,
its strongest use as a measure of marketing impact, when used alone, is in measuring offline
programs. Such programs cannot be measured using other means, such as acquisition reports,
discussed later in the chapter, which precisely trace digital media. Instead, often the only sign
that an offline promotion has been effective is a surge in web traffic.
While sessions data provides a quick measure of a site's popularity, or its growth in traffic since
the start of a promotion, it does not provide details on the nature of these site visits. To learn
whether a site visit resulted in a sale, where it came from, and who the (anonymous) visitor might
be, marketers must look to other web analytics data. Fortunately, a range of reports within web ana-
lytics tools provide this information. In the rest of this chapter, we will learn more about the rich
data obtainable using web analytics reports.
Users
Many companies also track users. This is the number of different visitors who came to a website
in a given period. This metric is less accurate than visits, as it currently does not always correctly
determine whether visits from multiple devices all originated from the same individual. Think
about how many different devices you own: your phone, your laptop, maybe a smartwatch. Then
think of how many other devices to which you have access: a shared computer in the library or at
home, your friend's phone on which you quickly look up information together, your mom's e-reader
you borrow for a plane trip. All of these devices are registered to other users, yet you may originate
web traffic from them. Later in this chapter, we will learn more about cross-device tracking, which
tracks web traffic from the same user, regardless of the device on which they visit a website.
For the purposes of studying the user metric, it's important to note that it does not, as of this
writing, fully eliminate duplicates resulting from a single visitor coming to a website from multiple
devices, However, users is still a frequently used metric. It provides a largely accurate metric of how
many visitors a website attracted in a given time period. As such, it can track a site's overall popu-
larity, as well as the efficacy of different marketing programs in driving visitors to a site.
Chapter 8 Measuring the Web's Data
207
New Versus Returning Visitors
Another important visit metrics is the ratio of new visitors to returning visitors. New visitors
are
those visitors who have never visited a site in the past. It is typically used as a measure of how
effective a marketing campaign has been in attracting new potential customers. Thus, seeing
the
proportion of new visitors grow is often a KPI for promotions, especially those that aim to intro-
duce a brand to a new target audience.
Returning visitors are a measure of visitor loyalty. While a continuous influx of new visitors
is generally desirable, it is possible for a site's proportion of new visitors to be too high. For an
established brand, having more than 50% returning visitors is both common and healthy. This is
particularly true if those returning visitors convert at a higher rate than new visitors, which is also
common for brands with strong brand loyalty. It costs more to acquire a new customer than to
retain a current one. Indeed, customer loss costs U.S. companies over $138 billion a year." Thus,
most brands measuring new versus returning visitors should aim for a balance between new visi-
tor acquisition and existing visitor retention, closely monitoring conversion rates for each. This is
no one right proportion of new visitors to returning ones. Companies need to set this ratio based
on their new customer acquisition goals, possible changes in their target audiences, and goals for
customer retention.
Again, as with users, this metric does not reach 100% accuracy, as it cannot completely distin-
guish between visitors who are not logged into Google services and are on a different device than
the one used for their original visit.
Geolocation
One underutilized metric for many organizations is web traffic geographic data. This can pinpoint
the countries, regions, and cities of web visitors. Because this data can be segmented by user
behaviors, it can reveal regional differences in consumer interests across the 4Ps. For instance, an
e-commerce site owner can track page engagements for product pages by user geography.
This can determine what products are browsed by visitors from specific cities. Some of these geotarget
differences may be obvious; for instance, we would expect visitors from Minneapolis to browse Target consumers
snow shovels more often compared to visitors from Miami. However, other data can be surprising according to their
geographic location.
and instructive. Site owners may find that certain colors are popular in a specific region, or patterns.
For example, let's say you sell furniture online. Looking at your geographic data for your web visi-
tors, you find that visitors from the Midwest spend 20% more time on product pages with bright
colors or floral patterns than visitors from the southern United States, who seem to prefer your
plaid upholstery. Using this data, you can geotarget your advertising with each region's preferred
products. More importantly, you can incorporate the design aesthetic of each region in advertising:
banner ads targeting the Midwest can be brighter, while southern-targeted ads can feature plaid
backgrounds.
When it comes to product development, geographic data can tell marketers more about the
product mix popular in different regions. While sales data is a more reliable predictor of future
sales than aggregate web traffic, web traffic data can provide insight into consumer preferences by
region.
Pricing data, too, can be gleaned from web traffic analysis. If lower price points win more web
traffic in a certain region, this can be an indicator that consumers are more price-sensitive in that
area. Again, web traffic data alone cannot be used to set pricing models; however, it provides front-
Like
line evidence of the types of price levels that induce consumers to engage with a webpage.
attitudes.
product-related data, it provides an additional datapoint for understanding consumer
8.4 User Behavior and Marketing

Effectiveness Data
Once we learn how much web traffic our sites attract, our next question is often: What do our vis-
itors do on our site? For instance, if we have an e-commerce site, how long do customers browse
before buying? If we have a blog, how many articles do users read? A related question is: How
appealing is our site to visitors? Are our e-commerce products presented attractively enough to
encourage those browsing shoppers? Does our blog layout make for enjoyable reading? Finally, now
that we understand a bit more about how our consumers behave on our websites, we might want to
know what brought them to our site in the first place. Like Jeff and Julianne, we might be investing
significant efforts in attracting consumers to our sites through social media, advertising, signage,
and other online and offline efforts. Are those efforts working? And if so, which efforts are working
best in bringing interested consumers to our site? In this section, we'll explore foundational metrics
around the interrelated topics of user behavior and marketing effectiveness.
Engagement
Measuring engagement is a key goal for most marketers. If consumers are engaged with a page,
engagement
they are more likely to buy, to recommend a brand, and to return to a website.
Any action that shows a
consumer finds a brand’s Engagement is also an early indicator of the success of specific marketing campaigns, such as
communications
content marketing efforts. It's central to winning customers and keeping their loyalty.
interesting, entertaining, or
informative. To measure engagement, it’s useful to have a working definition. Engagement is any action that
shows a consumer finds a brand's communications interesting, entertaining, or informative. On
social media, that engagement may be expressed with a reaction, comment, or sharing action. Ona
website, engagement is more challenging to define and measure, as it may be a relatively more pas-
sive action on the part of the consumer. A consumer may indicate their interest in a webpage by
reading it at length, clicking on content on the page, or utilizing interactive elements such as chat-
bots. All of these actions are important in engagement metrification. In this section, well define
metrics for measuring consumer engagement and related behavior. Let's begin.
209
Bounce Rate
The bounce rate for a site or a page is the number of visitors who viewed only one page, then exited
bounce rate
the site. A site's overall bounce rate reflects the number of visitors who viewed only one page,
regardless of which page they viewed. For instance, let's say a site has 100 visitors a day. Twenty of For a site or a page, the
number of visitors who
those visitors viewed only the homepage before leaving the site, while another five viewed the lat- viewed only one page,
est blog post before leaving, and twelve watched a video on a single page. The total number of then exited the site.
visitors who viewed a single page includes all who viewed, as their only page on the site, any of
those pages:
20+5+
12 = 37
Out of 100 visitors, thirty-seven looked at only one page, even those were different pages. Thus, the
total bounce rate for that example day is 37%.
A page also has a bounce rate. That is the total number of visitors who viewed that one specific pageview
page, then exited the site entirely. As you can see in the above example, the homepage was visited A view of a webpage.
by twenty users who then exited the site after a single pageview (a view of a page). Of the 100 visits
that day to the page, eighty visits included the user going to the homepage. That means that twenty
out of those eighty homepage viewers left the site after looking at just the homepage. Thus, the
bounce rate for the homepage is:
80/20 = 25%
Bounce rates, as we have learned elsewhere in the book, are of relative importance. Many sites have
all the information a user needs to convert on a single page and thus can have very high bounce
rates and still be successful. For instance, a tattoo parlor might have their hours, location, and prices
on their site's homepage. Someone who learns about the parlor from a friend's recommendation
may only need that information in order to book an appointment. Thus, the bounce rate alone tells
brands little. Instead, it's important to consider the bounce rate in the light of other information,
such as conversion metrics or growth in overall sales.
What is
Bounce
Rate?
A page with a form

Some pages, on the other hand, are designed to have a very low bounce rate.
the page. In this case, a
on it, for instance, should lead users to fill out the form rather than leave
marketers should consider the
high bounce rate is cause for concern. In interpreting bounce rates,
following:
1. The purpose of the page

2. The actions a user is likely to take based on the page’ information and capabilities
3. The sources of traffic to the page, and the likelihood of traffic from those sources converting
Only with this information can bounce rates be accurately analyzed. If the purpose of the page
can only be fulfilled with a low bounce rate, then it indicates an area in need of optimization.
It's important to track bounce rates consistently over time. Bounce rates that stay at a con-
sistent level while a site has overall strong conversions are typically desirable. If bounce rates
indicate potential problems with conversions, such as high homepage bounces on an e-commerce
site where multiple pages must be viewed to complete a transaction, marketers should try different
approaches to correcting the bounce rate. They should then monitor changes closely to see if
the modifications have the desired effect. Overall, all site owners should know their bounce rate
and investigate changes of more than 10% that last more than one week. In this way, they can
address early issues that impact conversions, while still focusing on more important metrics, such
as unique visitors, for more-regular monitoring.
Acquisition Channels
Geolocation data tells us where, physically, website visitors are. The acquisition channels report
acquisition channels
tells us where, on the web or offline, they found the website. When a brand invests a lot in market-
The marketing channels
that drive consumers to a
ing efforts, they want to measure the ROI of that investment. Traffic to a website is an indicator
website. that the investment in promotions is working, at least in driving visitors to the site. For this reason,
marketers often begin their web analytics measurement efforts by analyzing acquisition channels.
An acquisition channel is a marketing channel that sent web traffic to a site.
organic search For instance, in the above example, we can see that for this e-commerce site, the majority of
Traffic that comes from traffic, 57.6%, came from organic search—that is, traffic that came from people finding the website
people finding the website in search engines. Next after that, direct traffic, or traffic from people who simply entered the site's
in search engines.
web address, brought the site 17% of its visitors. Referral traffic, traffic that originates from links to
the website on other websites, brought 13% of visitors. The remaining traffic originated from clicks
direct traffic
on paid advertising in search engine results, or paid search, social media links, display ads, and
Traffic from people who
affiliates, or websites paid to place a link on their sites in exchange for a percentage of sales from
simply entered a site’s
web address. website visits generated by those paid links.
Acquisition channel reports available by default in many web analytics tools, including Google
referral traffic
Analytics, are often limited to measuring only major digital channels. For instance, Google Analyt-
Traffic that originates from
ics reports on traffic acquired via social media, organic web searches, paid search (PPC) advertising,
links to the website on
other websites. and direct traffic. Some of these reports offer further details on the specifics of the major channels:
The social media reports show whether traffic originated with Facebook, Instagram, Twitter, or
affiliates other large platforms. PPC traffic reports trace traffic to the keywords and ads that originated the
Websites paid to place a traffic. However, these acquisition reports still leave large gaps. For example, they do not, by default,
link on their sites in track offline efforts such as print advertising. Marketers can track these channels through custom
exchange for a percentage reporting efforts. By going beyond the defaults in acquisition reports, marketers can track the
of sales from website visits
generated by those paid effects on web traffic of a much wider range of promotional channels, including print media.
links.
Methods of improving acquisition reporting can require advanced technical skills. One com-
mon method is the use of tagged URLs. You have probably seen these special web addresses every
day; they include a range of characters and words after the main part of the web address, typically
to the right of a backslash (/) after the final com or page name. Web teams create trackable web
addresses by adding these special characters, all of which have important meanings, to their site's
standard web addresses in order to track clicks and traffic. Creating these trackable links used to be
time-consuming. Today, marketers can use Google's Tag Manager product, which is free, to track a
wide range of parameters, from a link's intended audience to the campaign of which a webpage is a
211
part. Many marketing automation tools, such as HubSpot and Marketo, also
allow marketers to cre-
ate tracking URLs using a straightforward tool.
A tagged URL consists of the normal web address and UTM codes with details on
the cam-
paign’s name, target audience, channels, and other details:
https://www.example.com/?utm_source=summer-
mailerSutm_medium=email&utm_campaign=summer-sale
Tags can also be added to URLs that are added to offline marketing efforts,
such as signs and fliers. You may have seen one common tagging method that
works well for both online and offline materials: URL shorteners. These tools,
which include the services Bit.ly and Owlly, create easier-to-remember web
addresses that have tagging already built in by the services.
With proper tagging, marketers can track traffic not only to a specific chan-
nel not included in default reports but also gain accurate reporting on the exact
ad campaign, time of day, and ad design that originated a website visit. Indeed,
any aspect of a digital promotional campaign is trackable using tagging. Thus,
acquisition reporting’s accuracy for digital media is limited only by an organiza-
tion's capacity for effective tag management.
Let's go back to Jeff's Hats for an example. Julianne has decided to advertise
Jeff's Hats on Instagram, promote it via ads in mobile apps and on winter sports
websites, feature videos of Jeff knitting on VSCO, Instagram, YouTube, and Face-
book, and create a PPC ad targeting consumers who search for “hand-knit hats”
and related keywords. Adding to the complexity, Julianne is also curious to know
what specific features of the hats are most appealing to consumers, inspiring the
most purchases. She plans to emphasize the upcycled yarns’ sustainability in
some ads, while others will promote the bright colors. With promotions for Jeff's
products on so many channels, featuring two different messages on each chan-
nel, Julianne could simply track any upsurge in web traffic. That would tell her
which marketing channels were most effective, through the acquisition reports. Source: Shutterstock.com
It would be time-consuming to parse all of that acquisition data in the web analytics tool, even
using spreadsheet software. However, even that would not tell her which message was most effec-
tive in driving sales. Instead, she wants to track exactly which promotion, on which channel, was
most effective in promoting Jeff's Hats.
Julianne turns to tagging for answers. Using a tag manager, she tags the URLs link in each ad
she creates to track the messaging, target audience, and placement of each ad. She adds similar tags
to all URLs associated with each promotion on any channel. After a month, she can see what mes-
sages received the most clicks on which channel. She finds that social media users are drawn by the
colorful style of Jeff's hats, while those responding to ads in snowboarding publications were more
interested in sustainability. In this way, she knows what types of messages to promote where and
to whom. This can really optimize Jeff's modest promotional budget.
Session Duration
more
When users find certain website content, such as blog posts and videos, they tend to spend
of time visitors spend on a site can indicate visitors’ level
time on the site. Measuring the amount
of interest in a site's contents. Time on site is often measured in multiple ways:
1. Average session duration across all visitors. This can be measured at a point in time, or as a
historical trend. Measuring time on site on a specific day or daypart can gauge whether a spe-
cific time of day is better for web engagement. Measuring time on site after the launch of new
content or web design changes can determine whether the new efforts caused greater visitor
engagement. Marketers can also measure average time on site as a trend over time. This can
measure changes in overall engagement, or the results of ongoing marketing campaigns, such
as social media, designed to increase consumers engagement with a brand.
2. Segmentation of visitors based on their session duration. This can identify especially-engaged
consumer segments, such as those in a specific demographic or acquired via a certain channel.
3. Time on specific site content. This can measure the impact of specific areas of a site, such as a
blog, product pages, or job listings, on overall consumer engagement.
For instance, in the report below, we compare mobile and tablet versus “desktop” users (a metric
that includes visitors on laptops). We also track the session duration of those who make a purchase
in contrast with the average user.
We can see that session duration varies little for mobile versus desktop users. However, we do
see a distinctly longer session length for customers who make a purchase—most of the time. It
will bear investigating why, at times, session duration for those who make a purchase dips down
to close to that of average users. It may have been the result of a promotion that encouraged rapid
purchases, such as an ad that drove consumers to a single product page with a quick-checkout but-
ton. Overall, however, we see that visits from customers who don't purchase are very brief, while
those from purchasers are very long.
FIGURE 8.1 Conversion Path Report

Conversion path report showing how users came to the homepage, as well as the pages they visited next. As we can see, most visitors came to the
site as direct traffic, and most went to the New Products page after first visiting the homepage. Knowing how visitors arrive at our websites, as well
as what pages they visit once on the site, shows us how customers are moving along the path to conversion.
400 a a eS eset s=rstnilelenslpuesieme
“Desktop ™ Mobile ™ Other
300
n
[=
oS
B 200 ©
9)
100
0 > BaP e S :
3/23/2022 3/25/2022 3/27/2022 3/29/2022 3/31/2022 4/2/2022 4/4/2022 4/6/2022 4/8/2022 4/10/2022 4/12/2022 4/14/2022 4/16/2022 4/18/2022 4/20/2022
Device Sessions Sessions to New Contact to B ounce i

Session
Type contact rate contacts customer rate EE A ibe Rate Length
(“% Desktop 2,798 0.71% 20 25% 5 83.13% 104 seconds
{4% Mobile 1,587 0.76% 12 16.67% 2 81.92% 87 seconds
(4 Other 125 143.2% 179 6.7% 12 96% 33 seconds
Total 4,510 4.68% 211 9% 19 83.06% 96 seconds
When looking at session duration, it's important to remember that it's a relative metric in many
cases. Marketers should look at trends, such asa significant increase or decrease in time
on the site,
rather than focus on absolute numbers. There is no such thing as a minimum number of minutes
213
consumers must spend on a website for the number to be an indicator of brand health. In other
words, there is no absolute “good” session duration, below which a brand is in trouble. E-commerce
sites naturally need consumers to spend enough time engaged to make a purchase; however, in this
age of improved user experiences and mobile shopping, this time is shrinking. Session duration
must be measured in the context of other metrics, such as conversions. If consumers are spending
more time on a site, but making fewer purchases, then growing time on site is not a positive indica-
tor. However, if consumers are spending more time on a website and making more purchases, then
it may be an indicator of greater engagement leading to higher sales. Or the higher conversion rate
may not be related to longer periods of time consumers spend on the site at all. Session duration
is only a part of the picture of website performance, and the data only makes sense when viewed
over time, and with a close eye on whether it correlates with other, revenue-based metrics.
Longer times on site may even indicate negative performance in a brand. How many times
have you struggled to find what you seek on a website? You may have clicked on many pages, each
possibly having what you need, before you found what you sought. Or you may have abandoned
the website entirely. When user experience is poor, longer times on site indicate user struggles
rather than strong engagement. If visitor feedback indicates that a site is confusing, a brand may
redesign its website to make navigation simpler. In such cases, reduced times on site may be an
indicator that consumers are having an easier time navigating the site, which may ultimately
lead to higher conversions. It's important for marketers measuring this ambiguous metric to ask
themselves: What may be causing this number to be high or low? What does it mean about our con-
sumers’ experience with our site? Does movement in this data correlate logically with metrics that
really matter, such as conversions or sales? When used as a leading indicator of other KPIs, session
duration is a valuable metric to identify successes early or address challenges.
For instance, let's imagine a new online music portal that allows fans to connect with their
favorite bands. On the site, users can find musicians, purchase music, watch videos, track tours, and
purchase concert tickets. Early feedback is that the new site is less user-friendly than its existing
competitors. Unlike more established music platforms, for instance, this platform requires exact
spellings to find a band—misspell a band’s name, and you have to scroll through an alphabetized
list of band names that start with the same letter of the alphabet as the word you typed. Purchas-
ing music is no easier; users must scroll through albums for a given song rather than searching by
song name. Session duration is long, over 15 minutes. However, conversions are low. Users are leav-
ing frustrated because they cannot navigate the site easily to achieve their goals. This is evident in
low conversion rates: Only 7.8% of visitors make any kind of purchase. The brand decides on a com-
plete redesign of their portal, making it easier to search, simpler to navigate, and user-friendly. The
result is that time on site actually decreases to 8.1 minutes. However, conversions increase substan-
tially to 16.4%. In this instance, longer time on site was an indicator of poor user experience, and
decreasing time on site showed an improved conversion path.
For some brands, session duration is a core KPI in itself, not requiring context to be a meaning-
ful metric. Media brands, for instance, exist to engage viewers who come to a site to read articles,
post to forums, or watch videos. The longer consumers spend on a website, the more engaged they
likely are with the site's content. Since content consumption is the goal of the site, and consump-
tion is indicated often by time spent reading or viewing, time on site isa reasonable KPI for a media
brand.
FIGURE 8.2 Example of New Visitor Report
"New Returning
3k
Sessions
Traffic Metrics Engagement Metrics
Total Sessions % New Sessions % Mobile Sessions Bounce Rate Page Views Per Session Avg. Session Length
52,349 76.36% 56.9% 82.51% 1.46 0:01:07

4 45.68% ¥5.17% 44.79% ¥1.23% 41.39% 49.84%
Pageviews and Time on Page

Similar to time on site, time on page measures the amount of time viewers spend on a single page.
When a page is a critical component of a brand's content strategy, measuring the time users spend
on the page can tell marketers how effective the page is in engaging them. Conversely, when a page
has been flagged as having a poor user experience, tracking time spent on the page can indicate
whether a page is, indeed, confusing to visitors. The same methods apply to analyzing time on page
as those for session duration.
Related to time on page is the pageview metric. This is a simple count of the number of times
a page was viewed in a given time. This measure can track the relative popularity of a page. If pro-
motions are driving traffic to a page, such as a social media campaign, it can verify the success
of the campaign in driving visitors to the site. It can also help identify top pages on a site, giving
marketers further insight into consumer interests. This data can help marketers understand what
topics interest their consumers, prioritize pages for a website redesign effort to ensure frequently-
viewed pages get updated soonest, and provide insight into overall site usage trends over time.
Pages per Session

For many brands, spending time on a site is only a partial indicator of how engaged users are with a
site. As important is tracking how many pages a visitor accesses when on the site. Pages per session
is the metric tracking not how long a user stays on a site, but how many pages they view or actions
they take when on the site in total. Another term many marketers use to describe this metric is
depth of visit. Depending on the web analytics tool, depth of visit goes by many names. In HubSpot
and Google Analytics, pages per session indicates the average number of pages users browse in a
single session.
215
FIGURE 8.3 Web Analytic Metrics
Sessions Pages/Session Bounce Rate New Visitors Mobile Visitors
45,670 2.45 23.4% 12.3% 45.9%

423.36% A23.36% 423.36% 4 23.36% 4 23.36%
Traffic Sources Sessions by Device
- Social ™ Organic Search “Paid Search © Direct * Mobile — Desktop

3.0M ~~ tts Sets
Pages per session can indicate engagement more accurately than time alone, depending on the
site's content. An e-commerce site, for instance, may have little content on most individual pages.
A single product page may have only a brief product description, along with images and links
to related products and a handful of reviews. Consuming such a page may take an average con-
sumer only a few minutes. Thus, both time on site and time on page may be small numbers, even
though a consumer may be highly engaged, enjoying viewing all of a brand's products. In cases
where content on individual pages across the site may be consumed quickly, depth of visit is the
most accurate metric of user engagement. Even for longer-form content, the greater the depth of
the visit, the more engaged users typically are. Thus, measuring depth of visit is important for all
brands, regardless of content types.
Like other engagement metrics, depth of visit can be segmented by specific user types. Mar-
keters can look at how many pages are viewed by users who convert, in contrast with those who
don't. They can look at depths of visits by certain customer segments, such as specific user demo-
graphics. This type of segmentation can help marketers understand the behaviors of certain users
on the site, target them with content more aligned to their goals, and identify the highest-convert-
ing types of customers.
8.5 Conversion Data
One of the most important web analytics metrics tracks conversions. A conversion is, as noted ear-
lier, any desired action on the part of a consumer, in this case, on the website. A conversion is often
a sale. However, it can be any other desirable action, such as a consumer signing up for an email
newsletter, joining a loyalty program, or sharing social content. The important thing is that a con-
version indicates an intention to do business with a brand.
In web analytics platforms, conversions are tracked by first setting up goals. A goal is the
desired action taken by a website visitor: a purchase, signup, or other engagement. However, the
definition of a goal in web analytics is highly open, reflecting the wide range of ways in which
consumers can engage with web content when they are on the buyer's journey. Events such as
watching a video for a defined duration, for instance, can be defined as goals, and thus, as con-
versions. We will learn more about defining goals in web analytics tools in the next section. The
important thing to remember is that, by using flexible, user-defined metrics to track them, Google
Analytics’ and other web analytics’ conversions function can readily track micro-conversions, as
well as revenue-generating conversions.
Goals
Tracking conversions in web analytics tools starts with setting goals using the tool. A goal for
conversion-tracking purposes is different from the colloquial meaning of goal. In business, we
talk about goals as the targets a business seeks to meet strategically in order to grow and thrive.
They are big-picture outcomes, typically with a longer time frame. Your marketing team's goal is
to increase sales, for instance. A goal in web analytics is different. It is defined as a specific action
or set of actions that a visitor can take on a website, which can be measured, and which relates to
some form of conversion. They are the tangible, time-limited indicators that a business’ larger goals
are being met.
Q
simplilearn taniire il
HOWTO 2 2
SET UP GOALS IN
GOOGLE ANALYTICS
In web analytics, a goal needs to be some actions or actions that take place on the site that can
be tracked in the web analytics tool. However, these web analytics goals track to a firm's larger busi-
ness goals. They are often a final step in a conversion funnel, such as arriving on a “Thank You” page
after successfully completing a purchase. Typically, goals should measure a conversion or a KPI of
engagement, such as viewing a video or sharing a blog post. They need to be specific to be traceable
in web analytics. For instance, “more email signups” is not a goal that users can set up in an ana-
lytics tool. Instead, they must set the final stage in their email signup process, such as clicking on a
button, as the goal, then measure how many users
Funnel Visualizations
Earlier in the book, we learned about funnels. A funnel is the step-by-step process by which a con-
funnel
sumer engages with a brand, leading to a conversion. In Google Analytics, conversion funnel
The step-by-step process
by which a consumer visualizations provide marketers with a straightforward way to understand the path by which con-
engages with a brand, sumers engage with a website, from initial acquisition to conversion or loss. Funnel visualizations
leading to a conversion. also provide numbers for how many visitors reach each part of a funnel, how many transition to
the next phase of the funnel, and how many are lost in each phase.
217
Q
CONVERSION
FUNNELS IN
GOOGLE ANALYTICS 4
View. in the online reader
For instance, picture an e-commerce site that sees 10,000 visitors a day:
+ Athird of those visitors go to the homepage first.

+ Another third start on pages specific to a particular product.
+ The remaining third are divided evenly between starting on either the blog page or on the
About Us page.
After visiting that first page, customers tend to browse the site, going to a range of other pages,
such as:
+ Product pages, if they started on the homepage
¢ Other, recommended products, if they started on a product page
¢ Blog posts, shipping FAQs, and other content
These navigation paths are often unique to visitors, but they also follow common patterns,
such as buyers going to the shipping FAQ before finalizing an order.
Each month, 156 visitors make a purchase on the site, for a conversion rate of 1.56%. The result-
ing conversion funnel looks straightforward:
However, as we Saw, visitors enter the website at different points. They then
visit a range of pages before buying. Might the pages visited have an impact on
whether shoppers eventually convert? Funnel visualizations are a way to answer
this question. By creating a funnel-shaped visualization of typical user paths
through a website, marketers can map which entry points, pages visited, and traf-
fic patterns result in the most conversions.
Funnels can also identify places where customers are leaving the path to
conversion before taking action, taking action to keep customers engaged when
they may tend to exit.
As you can see from the larger report below, most people who view their final Source: Shutterstock.com
shopping carts abandon them. Two thousand or so leave entirely. Others go to a small handful of ,
other pages: They circle back to an earlier view of their shopping basket, get stuck on the login page,
or go back to shopping. From this report, it looks like there may be an issue with a login page that
frustrates users. This is an issue that can be addressed, leading to more sales if fixed. The data is
pointing marketers to an area of the site that can be made better, thereby increasing sales and con-
versions.
The funnel above shows how users arrived at the conversion goal through a typical path. As
you can see, users drop off at many points, but some points showed marked numbers of users leav-
ing before taking the next step. Common places for funnel drop-offs are the shopping cart, shipping
information, and other buying steps. If users are dropping at less-common spots, such as the blog
or a product page, then that might be a location where user experience flaws, pricing, messaging, or
the product itself may be turning away visitors. Once identified, the pages that cause users to leave
can be optimized with testing to increase conversions.
8.6 Content Data
Brands put a lot of effort into their online content. In the age of inbound marketing, content is
said to be “king,” the most important aspect of a company’s promotional efforts, attracting visitors
with appealing videos, blog posts, ebooks, and interactive elements. Content marketing is a nearly
$10 billion a year market.“ Measuring the ROI of a company’s investment in content marketing is a
critical goal. Fortunately, web analytics tools have measured users’ engagements with content from
the earliest days of web logs. Measurements of content can reveal users’ interest in content topics,
the success of content-focused promotions, and shifting trends in topics over time. More strategi-
cally, deep analysis of content engagements can illuminate brand positioning, product strategy, and
pricing models. In this section, we will learn more about content data reports, as well as learning
how to use them for strategy across the 4Ps.
Top Pages by Pageviews

One easy-to-read Google Analytics report looks at a site's most-visited pages. This data appears in
the Content reports section by default; pages are listed in order from the most popular to least.
Thus, marketers can readily see the top ten, twenty, or fifty (or more) pages of a site, sorted by how
many visits each page receives in a given time period. Currently, in Google Analytics, this report
is Top Pages by Pageviews; it is called different terms in different tools, but the data is always
comparable, focusing on a site's most-viewed pages. Most-visited pages can vary seasonally, so it is
important to track this data weekly, monthly, and quarterly. For many e-commerce and media sites,
tracking most-visited pages daily is reasonable, as content trends fluctuate continuously. As with
many web analytics reports, most-popular pages lists can be measured in conjunction with other
data dimensions, such as visitor psychographics. Marketers can track pages visited overall as well
as most-visited pages among users who convert, among users of a given age, users who have visited
the site multiple times, or scores of other relevant additional factors that make the data relevant.
Knowing the most popular pages on a website can help marketers meet many goals:
1, It can help determine what products, topics, or brand attributes are most interesting to con-
sumers. For instance, imagine a website that sells sporting goods. They have equal numbers
of pages showcasing soccer, skiing, lacrosse, skateboarding, and hunting equipment. However,
pages showcasing soccer equipment account for 30% of the most-visited pages. This tells the
site's owners that soccer equipment is relatively more popular with site visitors than other
sports gear.
2. It can prioritize pages for a site redesign. Pages that receive high traffic with low conversions
can be slated for immediate optimization efforts, while pages that receive low traffic are less
urgent to optimize if they convert poorly, as little traffic flows through those pages. Knowing
the “high-traffic areas” of a site focuses marketers’ attention on the pages most visitors see.
3. It can identify content, product, and segmentation opportunities. Highly visited pages may
have acommon theme, such as sale prices or organic items, which reveal consumer interests in
specific products. It can be further segmented by a subset of site visitors, such as purchasers,
logged-in users, or consumers in a target demographic. Analyzing pages of interest to certain
2 19
users can finely pinpoint their subset of interests. For instance, consumers who
visit a site sev-
eral times a month may often read blog posts on a particular topic. Thus, blogging more
often
on that topic may increase engagement with this desirable segment.
Regular analysis of most-visited pages is also an essential part of assessing website health.
Pages with the highest traffic merit closer monitoring for quality; thus, the most-visite
d pages
report provides a checklist of pages web teams should maintain to the highest standard.
Although used less often than visitor data, page data is critical to content marketing, product
strategy, anid user experience. As part of a robust page data reporting function, most-visited pages
reports provide guidance for marketing priorities.
Top Landing and Exit Pages

Analyzing the top pages on which users enter or leave a website provides a wealth of data on user
behavior, the success of promotions, and SEO. It can also identify areas for improvement in user
experience, offer insights into pricing and product attitudes of target consumers, and shed light on
conversion rate optimization opportunities.
oO
LANDING PAGES IN
4
GOOGLE ANALYTICS
Top Landing Pages
When users first come to a site, they may arrive on a range of pages, not just the homepage. For
example, a company may share their blog posts on their social media accounts, with a direct link
to each blog post. Followers click on those shares, arriving directly on a blog post page. They do not
look at the homepage at all or only visit it later.
Search engines also send users to many different pages of a site, not just its homepage. An ,
internal page on a site may have information that is more relevant to what a consumer searched
for, so the search engine will present that internal page in its results. For instance, let's say you need
a chocolate-chip cookie recipe. You search for it online. Your search results include a page with a
chocolate-chip cookie recipe. It is part of a larger website of dessert recipes. However, you were not
directed to the homepage of the dessert recipe website. Your search results sent you directly to the
exact content for which you searched.
As we see in this example, the page on which you landed indicates the topic for which you
hip
searched. The recipe site editors can track how many people came to their page of chocolate-c
cookie recipes via organic search, thereby understanding how many of their users are searching
online for that specific dessert. This can help them learn what topics bring the most readers to their
site. Analyzing landing page reports, especially when paired with acquisition data, such as what
landing pages are most popular with users acquired via organic search or social media, helps site
owners see the topics that attract more visitors.
landing page Ad campaigns often send consumers to specially built pages with an offer related to the cam-
Purpose-built pages paign. In marketing vocabulary, a landing page refers to such a specially built page, one designed to
focused on a specific encapsulate a specific message for a targeted purpose. Certainly, the landing pages report can track
topic, often central to a the success of such pages in driving conversions. In web analytics however, the term landing page
single promotional
campaign. refers to any initial page in a website visit. It can be a purpose-built landing page or one that is
attracting traffic through search, social media, print, or any other medium.
Top landing page data measures the impact of marketing campaigns associated with specific
pages on site traffic. It can also indicate topics that are active on social media. It provides critical
information on search keywords, especially for organic traffic that is challenging to track.
Landing page data can guide segmentation strategies by channel. Let's go back to our recipe
website. Looking at their top landing pages, they find that organic search has driven traffic to
fifty-two pages with cookie recipes and only sixteen pages with cake recipes. By contrast, social
media drives traffic mainly to cake recipes, with 60% of the top landing pages for social media-
acquired visitors relating to cakes. This allows the editorial team to focus more of their social media
efforts on meeting the demand for appealing cake content, while maintaining a robust SEO pro-
gram focused on cookie recipes as well.
Landing page data can also be segmented by conversion behavior. Certain pages may be the
origin point of more visits that convert than others. Critically analyzing the content of landing
pages that initiate strong conversions can lead to insights improving the conversion potential of
other pages. Thus, entrance page data should be paired with conversion funnel data to fully realize
the potential of the landing page report.
Top Exit Pages
When evaluating exit page reports, a balance of quantitative data with qualitative understanding
of site content produces the best results. Marketers need to ask themselves: What does it mean that
users are exiting from this page? Is this a logical exit page? Or is leaving after viewing this page a
sign of things that can be done differently? A landing page on which the offer is a demo, sales call,
or content download is a logical exit page, for instance. Consumers visit the page, complete a form
to be contacted by sales for a demo or receive a downloadable resource, and naturally leave once
the task has been completed. Contact pages are also natural exit pages; when a consumer Clicks
on “Contact Us,” they are seeking to get contact information only, exiting once the information is
found. If the page itself is converting well, its status as an exit page is not an indicator of poor per-
formance. By contrast, a page with pricing data is not a natural exit page. If many consumers exit
a site after viewing a company’s pricing, that is a strong indicator that the pricing offered is driving
away customers.
As with much marketing data, entrance and exit data often needs to be assessed alongside
other data to determine its potential meaning. Let's consider again the example of the pricing page
that accounts for a significant proportion of exits. It may be that a firm's pricing is not competitive,
and thus, the content itself, the prices on the page, are the cause of the exit. Determining whether
this is the case would require competitive analysis, which we study later in the book. However,
other factors may be causing the exits. An ongoing print campaign may be placed in media target-
ing price-sensitive audiences, for example.
Imagine you run a full-service landscaping firm, specializing in creative, sustainable garden
design. Your services target high-income suburban homeowners who value environmentally
responsible living. You service communities with average household incomes of double the states
221
median income. Your top exit page is your pricing page; you are convinced that your prices them-
selves are competitive for your target audience. Competitive price analysis shows your rates are
10% lower than your competition. You recently took out full-page ads in Bargain Living magazine.
The ads initially seemed to be working: Your web traffic increased by 27%. However, your top
exit page changed from being your Contact Us page to your pricing page. Conversions have not
increased. With higher web traffic in absolute numbers, your website conversion rate has decreased,
Perhaps advertising your premium service to bargain-conscious consumers was not a good invest-
ment.
Thus, the first step in analyzing exit page reports is to identify natural exit pages, then sort
them from those pages from which an exit is problematic. Then, marketers typically need more
data to determine the causes of problematic exits, as well as potential solutions. When faced with a
top exit page that should be retaining traffic, marketers should look at additional data, both within
their web analytics tool and using other marketing analytics methodologies:
« Traffic sources: Is the exiting traffic from a particular campaign or source? The page may then
be inappropriate for a specific audience.
- New versus returning visitors: Are new or existing site users more likely to exit on that par-
ticular page? If new visitors are those exiting, the page design may be confusing to newcomers,
requiring redesign.
« Heatmapping: Heatmaps are a feature in many analytics tools that show which areas of a
page received the most visitor clicks, and where most users stopped scrolling on a page. If the
heatmap tool shows that visitors consistently stopped scrolling and exited before they reached
key conversion points, those points may need to move higher on the page.
¢ User interviews: If any key part of a website is not performing as hoped, it’s imperative to con-
duct interviews with representative users, to identify reasons for the performance issue. Users
may find a page confusing or simply find they need to be able to find needed information more
quickly. Asking consumers directly provides needed insight.
Because visitors exiting a page without converting is a key indicator of lost revenue opportu-
nities, the top exit pages report is a critical report for improving site ROI. Though it does not, alone,
provide data on how to optimize a site page, it summarizes those pages where improvements may
provide the most benefits. It is the starting point to further analytics work that often provides the
highest returns.
8.7 A Closer Look: What Do They

Want to See?
Aeronatics is a virtual reality (VR) platform that teaches advanced skateboarding techniques.
Through simulations using both a VR headset and a simulated skateboard device, it helps
skaters perfect their skills anytime, anywhere. Launched in 2020, they have seen exponential
growth in signups over the past eighteen months. Their website is more than a way to purchase
destina-
from the brand—through a brand journalism initiative, blogging, and videos, the site is a
into
tion for the skater community. The brand also sells more than the simulator, branching out
$17 million in revenue, with plans to expand to other sports.
fashion. Today, they have more than
age Marketing Analytics
As the site has grown to more than 1200 pages of blog posts, opinion pieces, tutorials, videos,
and product pages, Founder Chauntay Mitchell would like to know what matters most to her cus-
tomers. While conducting a survey of her customers is in her marketing plan, she knows that many
consumers are reluctant to fill out these studies, making the results biased toward those who opt
to respond to the questionnaire. (For more on surveys and other market research techniques, turn
to Chapter 10.) Chauntay wants to know more about what her average consumer thinks. Her chief
marketing officer, Greg Powell, turns to web analytics to deliver answers.
Examining the most visited pages data, Greg finds that the top ten pages are expected: there's
the homepage, shopping cart, and main shopping page for fashion, as well as pages with contact
information, company background, or other basic, popular details. Digging deeper, he finds insights
by broadening his search to include the top 100 pages, which is a reasonable number for a site
of this size. The top 100 pages are surprising. Despite the how-to videos being popular on the
company’s social media, the most-visited pages on the site are interviews with top skaters, with
fashion inspiration blog posts a close second. Twenty-seven percent of the top 100 most-visited
pages, excluding common pages like the homepage, are interviews, while 17% cover fashion. The
remaining popular pages are a mix of other content types, none reaching more than 4% of the total
or product pages.
Looking at sales data, Chauntay knows that T-shirts are her strongest merchandise sellers.
However, the most-visited product pages data tells a different story. The most-visited pages include
hats, backpacks, and jeans, in equal proportion to the T-shirt pages.
“This is interesting data,” Chauntay says to Greg. “What does it mean, though, to our marketing
strategy?”
“In terms of content we produce on our skater community site, we should focus more on inter-
views. That should translate well to social media, too, where we should be doing more Instagram
takeovers, along with other ways of engaging top skaters to speak for our brand. As far as the how-
to videos, we might shift gears there, too, asking the top skaters to teach tricks, rather than relying
on our own team.”
The product data, Greg concurs, is more surprising. It's hard to tell from this data alone why it's
happening, but one thing is clear: Although consumers are buying the T-shirts in larger numbers,
they are just as likely to browse many of the other products.
“Then why don't they buy those other products?” asks Chauntay.
223
j “It could be a variety of reasons,” says Greg. “The T-shirts are some of our most
affordable items,
so it could be that they like the other products and just can't afford them. Or
something about
the product details convinces them to buy T-shirts, while being less compelling in the case
of other
products.
“So that data is inconclusive?” queries Chauntay.
“It is," says Greg, “but not as much as wed think. It shows that there is interest out there in
our other fashion merchandise. And it points us in a direction where we can learn more about new
sales opportunities. Now that we know that our other products are just as popular with browsing
consumers, we can test different messaging on those products pages, or conduct a survey asking
consumers what they think about our product line. Now that we know what's possible, we can
gather even more data to arrive at answers.”
“Sounds great,” says Chauntay, “Looking forward to finding out how to engage our customers
even better than ever.”
8.8 Do the Math: Page Conversions

Understanding our site's overall conversion rate is important. Recall that the conversion rate is the
percentage of a site's visitors who engage in any action defined by the site owner as a desired action
that indicates the desire to do business with a brand, such as making a purchase. It can include
more abstract actions, such as micro-conversions. A site’s conversion rate is determined by calculat-
ing what percentage of a site's total visits resulted in a conversion. For example, let's say our friends
at Aeronatics see 40,000 visitors a month to their site. They define a conversion as a purchase or
email list signup. They get 2,000 of these conversions a month. Their conversion rate is determined
by dividing 2,000 by 40,000:
2, 000/40, 000 = 0.05 = 5%

Tracking conversions by site is the first step to determining the efficacy of a site in driving sales.
To go deeper, we can also track the conversion rate of a specific page. For instance, we learned that
T-shirts are the most popular item the brand sells, even though consumers browse many other
products on the site. To go deeper, Chauntay and her team looked at the conversion rates of individ-
ual product pages. They found that 1,000 visitors a month went to the page for their most popular
T-shirt. Of those, 120 made a purchase of any product, for a conversion rate of 12%:
120/1, 000 = 0.12 = 12%
No surprise there. Interestingly, their most popular hat style also received 1,000 visits, and 100 of
those visitors purchased a product:
100/1, 000 = 0.1 = 10%
Hats are not a big seller for the brand, however. What's going on? The conversion rate is a metric of
any conversion that takes place after a visitor visits a page; the customer can have engaged in any
conversion, even if it was not the conversion indicated or promoted on the page itself. They could,
for instance, have browsed to other pages, then made a purchase of another product. The reason is
that consumer behavior is complex; being exposed to a message may not lead them to take immedi-
ate action, yet still encourage their overall purchase behavior. Thus, brands typically measure page
conversion rates as the number of users who viewed a page, then took a conversion action during
the same visit, even if it was a different action than the exact one noted on the page.
of
One exception to this way of measuring conversion rate is in measuring the conversions
on a specific topic, often central to
landing pages. Landing pages are purpose-built pages focused
a single promotional campaign. For instance, a web team may create a special page with an offer
targeted only to consumers who respond to a single Facebook campaign. In such cases, consumers
may be steered by the page design to convert on the page, for instance, with minimal or no links to
other parts of the site, and prominent calls to action such as large buttons. In such cases, the con-
version rate is measured only as conversions on the landing page.
Tracking conversion rates by page allows insights into how well a page encourages consumers
to purchase, engage, or sign up. Low-converting pages can be tested for optimization, while high-
converting pages can be used as a model for other conversions. The content of pages with high
conversions can also provide insight into consumers interests and preferences. Tracking both site
and page conversions weekly or even daily is key for optimizing sites to drive maximum ROI.
8.9 Conclusion
Web analytics data is critical to understanding the performance of a brand's website. It can also
contribute to our understanding of many aspects of the 4Ps, from the success of promotions to
interest in different products. Chief among the basic web metrics are data on visits, which includes
total aggregate visits as well as data on how many individual visitors a site attracted, how often vis-
itors return to the site, and where they are located. More complex data tracks how website visitors
initially find a site, which provides valuable insight into the success of marketing campaigns, what
pages they more often view, which provides insight into consumer interests, and how long they
stay on specific pages, which provides insight, among other things, on how compelling users find
each site page.
Conversion data provides additional insight into how effective a website is in meeting market-
ing goals. More sophisticated understanding of website traffic comes from analysis of conversions
or desired user actions such as completed sales. Conversion analysis starts with setting goals, which
are a feature in Google Analytics and other platforms in which marketers specify certain site
actions, such as loading a sales confirmation page, as indicative of a conversion. In addition to track-
ing conversions, marketers typically also look at engagement, which can be tracked using metrics
such as time on page, session duration, and pages per session. Goals can track both conversions,
which are often sales transactions, and micro-conversions, which are actions consumers initiate to
engage with brands that fall short of a sale, such as email signups. Tracking such data provides
critical insights into a site's contribution to company profits. One way brands can use such data is
to help improve aspects of the site that lead to or discourage conversions. Looking at a site's top
entrance and exit pages can help marketers better understand the customer journey on a site, opti-
mizing customer acquisition, managing consumers first impressions of a brand, and keeping them
engaged on a site until they decide to do business with a brand. Finally, once consumers decide to
make a purchase or otherwise to do business, conversion rate calculations help marketers under-
stand how effective a site is overall, or specific pages on the site, at transforming online shoppers
into a brand's future loyal customers.
225
f Distinguish between these two metrics: visitors and unique visitors. Why might one be higher
than the other? What does it mean if one is higher than the other, and should it be cause for
concern by marketers?
. What is meant by bounce rate? Why is it important to interpret bounce rates cautiously?
. Why is the term “hit” sometimes used to describe web traffic?
. What is the meaning of the term return visitor? Under what kinds of circumstances would a
brand be eager to see growth in new visitors? Under what kinds of circumstances would a
brand be happier, instead, to see more returning visitors?
. Name two reasons why a brand looks at its visitors’ geolocations.
. Cami’s Cookies is a bakeshop with locations in six cities, all near campuses of the state
university. In 2020, Cami’s Cookies began shipping its products to students who were shel-
tering in place at home. So successful was its e-commerce operation that it built a more
robust online store, shipping 400 boxes a day of its cookies by early 2021. Looking at the
geolocation data for their website, marketing manager Steph Carlson sees that most of the
company’s visitors are now from large cities worldwide, with a large surge in traffic to Cami’s
Cookies new chocolate-chip products. She wonders what marketing efforts have driven all
this new e-commerce traffic to those specific product pages. What data can she look at,
in addition to the geolocation data she has examined, to determine the sources of this traf-
fic? What actions would you recommend the marketing team take, based on that additional
data?
. Name three of the marketing channels measured by default in the acquisition channels
report.
. What is meant by “direct” as an acquisition channel? How might a consumer find out about
a website if they come to the site as direct traffic?
. Flourish and Glow is a national cosmetics brand. It has invested heavily this year in social
media content as well as a TV campaign. Using its web analytics acquisition data, how would
they be able to tell how effective these campaigns were at driving traffic to its site? Would
the company’s marketers be able to compare which was more effective?
. Why is it important to set up goals in Google Analytics or other web analytics tools? What
types of actions do goals measure?
11; What are some of the important considerations in defining goals?
12. Wil Khan launched a startup company his senior year in college, matching personal chefs
and trainers with consumers who need a personalized approach to fitness. Three years later,
he wants to determine whether visitors to his website are more interested in his platform's
personal training services or those related to the personal chef program. He has only Google
Analytics installed on his site. What reports in Google Analytics would tell him what pages
are most important to his visitors?
13. What is the difference between time on site, time on page, and depth of visit? Give specific
examples.
14, You run a food blog, dedicated to sharing your favorite baking recipes. The time on page
for one of your blog posts, about chocolate chip cookies, has recently doubled. What other
data would you look at to find out why this is? What steps might you take if the blog post
continues to see high time on page metrics?
15. What are some of the things marketers can learn about their consumers from the pages that
are most visited on a brand’s website?
16. What might a site’s top landing pages tell a brand about the success of their marketing pro-
grams? Give specific examples.
re True or false: Top landing pages can provide information about the success of a brand’s
SEO efforts.
18. True or false: If a page is among a site’s top exit pages, that always indicates a problem with
that page.
19. What are some of the reasons a page might be a top exit page?
20. True or false: It’s worthwhile to measure the conversion rate for individual pages on your site.
Please also share why or why not.
2; “Google Analytics Usage Statistics." BuiltWith, May 12, 2021.

https://trends. builtwith.com/analytics/Google-Analytics.
Endnotes 3. Landis, Taylor. “Customer Retention Marketing vs. Customer Acquisition

Marketing.” OutboundEngine, April 20, 2021. https://www.outbound-
engine.com/blog/customer-retention-marketing-vs-customer-acquisition-
marketing/.
. “Content Marketing Software Market.” Markets and Markets, October
2018. https://www.marketsandmarkets.com/Market-Reports/content-
1. Clement, J. “Global Data Volume of Consumer IP Traffic 2022.” Statista, marketing-software-market-264192105.htmI.
February 28, 2020. https://www.statista.com/statistics/267202/global-
data-volume-of-consumer-ip-traffic/.
CHAPTER 9
Going Beyond the Basics
Learning Objectives

1. Measure a website’s user experience metrics using web analytics data.
2. Explain the meaning of assisted conversions and multitouch attribution,
3. Recommend specific, data-grounded marketing strategies based on complex conversion
metrics, including multichannel funnels and assisted conversions.
4. Measure e-commerce performance on the product, product category, and site levels.
5. Create strategies for improving sales and revenue based on data from website traffic.
Basic web metrics can tell marketers a great deal of topline information about the performance of
customer journey
a company’s website. There is much more data available via web analytics tools, presenting a rich
The path taken by
array of information on a site's technical performance, how consumers use the site, and how a web- consumers from initial
site visit flows from page to page. Advanced web analytics data allows marketers to develop deep research to
insights into the customer journey. Supported by statistics on how many users navigate from each post-purchase.
page to a conversion point, marketers can ground the vital work of mapping the customer journey,
or the path taken by consumers from initial research to post-purchase, with data-driven accuracy.
By mapping the full range of user engagements on a website, marketers can gain a strong under-
standing of what customers want and how they convert.
Advanced analytics also help us understand our basic metrics better. While looking at bounce
rates, for instance, may yield limited results, analyzing them in the light of more advanced metrics,
such as events in which consumers engage in specific on-page actions of interest to marketers, can
shed light on what were really seeing in our basic measures. Advanced metrics give us the full pic-
ture of what our web data is telling us.
Most importantly for many marketers, it is through advanced metrics that brands can under-
stand the complex reality of today's conversions. Measuring the relationships of different market-
ing channels to the overall volume of conversions, mapping the many paths customers take to
arrive at the site and the eventual purchase and modeling the many ways we can understand com-
plex conversion paths can help marketers know which marketing efforts are truly impacting their
brand's bottom line. This data alone makes advanced analytics worth it.
One of the biggest challenges with advanced web analytics metrics is that many marketers
are not experienced in tracking them. Although tools available today are highly intuitive, fully
using advanced reports requires experience in interpreting complex data visualizations. It may also
involve some initial report setup, including the use of tagging, or adding codes to web properties to
send advanced data to analytics tools.
In this chapter, we will learn about advanced web analytics. We will learn about the most rel-
evant advanced features of web analytics tools, develop a framework for using advanced analytics
for key marketing functions, and apply data from advanced sources across the 4Ps.
9.1 A Closer Look: Is Our Site Really

Optimized?
Jeff's Hats are on a roll. But sales are lagging behind where they were supposed to be in year two.
They have introduced more merchandise, including T-shirts. They suspect the website itself is not
user friendly, or something else is impacting conversions. At first, the homepage featured a photo
of Jeff snowboarding in one of his hats and images of his most popular styles. Soon, however, the
team started getting phone calls from customers trying to place orders. They could not find the col-
ors they had seen on social media posts or wanted to know whether a particular style came in more
sizes.
“Maybe our website needs some improvements. After all, it's our first
attempt. I'm sure if we looked at it closely, we could make it better,” says Jeff. “I
wish we knew more about how people are using the site. How long do they click
around before deciding to call us instead?”
“These are some of the questions that require more advanced metrics to
understand,” says Julianne. “I can tell you that most of our website visits involve
about twenty pages, with people clicking back and forth among product pages,
their shopping carts, and the homepage. It looks like they may be having trouble
finding what they need or changing their minds after seeing the total price for
fs
their orders.”
“So we could streamline the navigation on our site?”
‘Absolutely! In addition, we should think about showing a running total for each order as peo-
ple shop, so there are no surprises at checkout,” says Julianne.
The team implements these ideas, based on the data they saw in their web analytics. By the
next quarter, sales have gone up 22%. “Using advanced metrics really helped improve our customers’
experience with our site,” says Jeff. “Analytics is the way to ensure that customers love your site and
become loyal customers.”
9.2 Advanced Conversion Metrics
In the last chapter, we learned about the fundamental conversion metrics. We also learned to set
goals, which have a specific meaning in web analytics platforms, indicating a measurable action,
such as the viewing of a specific page, that indicates either a conversion or a step on the way to
a conversion. As we learned in the vignette at the beginning of this chapter, conversions are often
complex. Understanding them completely often requires a range of metrics. In this section, build-
ing on what we learned in Chapter 8, we'll explore the advanced metrics that help us understand
how conversions take place on our sites, what drives conversion actions, and how to refine our key
performance indicators (KPIs) for more effective conversion tracking.
229
Goal Flows
While some conversions happen quickly, on a single page, most occur in the context of multipage
visits, or even multiple visits to a site. Think about the last time you made a purchase or signed
up for anything online. Did you go straight to the page where the merchandise you wished to buy
was and buy immediately? Or did you browse the site, looking at different products, and perhaps
non-product pages, such as the company blog? What about how you arrived at the website where
you made your purchase? You may have typed the web address right into your browser. However,
you may have also clicked on a social media link, a text, an ad, or a coupon offer in your emails.
Taken together, the path a consumer travels to and through a website before they convert is called a
conversion path. Many are simple: A consumer clicks on an ad, goes directly to a landing page with
an offer, and converts by purchasing or signing up right on the first page they visit. Most are com-
plex: Consumers browse through sites extensively before making a purchase, examining products,
reading content, and exploring the site. They also revisit sites multiple times before buying.
Analyzing these goal flows is one of the most critical uses of web analytics data. This data pro- goal flows
vides marketers with information on what steps consumers typically take before converting. This Data providing marketers
data, in turn, allows web teams to optimize each step between when a customer arrives at a website with information on what
and when they ultimately purchase. Steps consumers typically
take before converting.
For example, let's review the chart below. It is for an e-commerce site that sells a range of prod-
ucts. We can see on the left where consumers come to the site. They may have searched on Google,
clicked on a link in an email, or visited the site directly. From there, most consumers put a product
in their shopping cart, then went to the billing page, then checked out. We can also see what steps
consumers took if they did not move on to the next steps toward a purchase—in other words,
where they dropped off.
FIGURE 9.1 Goal Flow Visualization
= 400 x 305 201

Billing & Payment Check Out
Website
Shopping Cart
The goal flow report is similar to the funnel visualization we learned about in an earlier chap-
ter. It has several important differences, however. Goal path analysis is more varied, takes into ,
account more metrics, and focuses on the user journey rather than the site owner's goals. Conver-
data
sion paths include conversion funnel data as well as other, non-funnel information. Goal flow
between key steps in the
is more detailed. It captures the behavior of users who go back and forth
steps, such as
conversion process. It also shows what clicks they engaged in outside of those key
what pages they viewed if they went back to shopping after starting the checkout process."
depth,
Using the goal flow visualization is a good way to explore actual user behavior in greater
goal paths can measure
leading to a better understanding of customers’ priorities.” In addition,
For instance, using goal
more types of site goals easily rather than focusing strictly on conversions.
paths can help better understand the specific click patterns behind other key metrics such as pages
per session. As you may recall from Chapter 8, pages per session measures the number of pages
an average visitor views during a website visit. While an important metric on its own, it does not
always tell the complete story of how interested visitors are in the most important areas of a site,
such as product pages. Using goal path visualizations adds depth to the pages per visit metric by
showing which pages users viewed and in what sequence. By showing the entire path of a visit,
from its acquisition source through each page visited to the point of conversion and/or exit, the
goal flow visualization provides a uniquely comprehensive view of consumer behavior. It can mea-
sure the effectiveness of marketing channels, not just in driving conversions but also in affecting
consumers’ other actions. It can also provide unique insights into the different behaviors of differ-
ing groups of users.
This added information can help marketers correctly interpret other metrics. For example, let's
go back to Jeff's. After a successful Instagram campaign, the website enjoys a spike in traffic with
a modest increase in pages per visit, which jumps from 3.4 to 3.7. Julianne is initially a bit disap-
pointed, as she had hoped that pages per visit would grow at a higher rate. However, after looking
at the data from goal flow reports, she finds that the number of visits that included product pages
has increased by 40%. Thus, although pages per visit alone did not grow by much, the actual level of
interest visitors showed in the products during their visit grew considerably. In addition, by looking
at the goal flow reports, she also finds that more visitors went directly from the homepage to prod-
uct pages, indicating a stronger level of intent to purchase. Finally, by looking at the acquisition
channels of each visit, which are also shown in goal flow visualizations, she found that many of
these visitors who went directly from the homepage to shopping on product pages originated from
Instagram. This means that the social media campaign had a positive effect on conversions. Not
only that, but it also brought to the site users who were especially excited to make an immediate
purchase. By looking at goal flows, Julianne can fully understand just how successful her Insta-
gram campaign was.
user experience (UX) Goal flow data can also help identify ways to make a site's user experience (UX) more user-
A user’s experience with a friendly. They can do so by tracking the ways in which users navigate through a site, including areas
website, product, or where they may get lost."! We will learn more about applying goal flow data later on in this chapter,
service. Also used to
in the section on metrics for measuring user experience.
describe the discipline of
studying and improving
user’s experiences with
websites, products, and
services.
Conversion Paths
Goal paths help us discover how consumers often move through a site in complex ways before
conversion path
report accomplishing a goal, such as a sale. In addition to taking complex paths while navigating a site,
consumers can also take complex paths to get to a site. To learn just how complex, marketers turn
Details the ways in which
consumers were directed to a conversion path report. Conversion path reports detail the ways in which consumers were
to a site, such as via social directed to a site, such as via social links, by typing in the web address directly, or discovering the
links, by typing in the web
site via a search engine.
address directly, or
discovering the site via a
search engine.
231
oO
Path Analysis
in GA4
ts
In the following example, we can see a conversion path for an e-commerce store. In it, we see
referral link
that the site had 500 conversions over one week. Of those, sixty-three originated from organic
search—in other words, through a consumer finding the website on a search engine, excluding any A link to one website on
another website.
ads for the site appearing in the search engine and focusing only on true, non-ad results. However,
as we can see, those sixty-three users did not purchase after that initial visit. Instead, they later
returned as direct traffic—that is, by typing the web address for the site into their browsers. It was
on that second visit, as direct traffic, that those sixty-three users converted. For an additional fifty-
three users, their path was different. They started on a referral link—a link on another website.
They later returned as direct traffic—traffic that originated when the user entered a web address
directly into their browser. This may mean that users who clicked on a link on another website, rec-
ommending this online store, were so interested in the store that they decided to return to the store
at some future time, remembering the brand name or web address, or bookmarking the site. (A visit
counts as a direct visit if the user types or says the web address, starts to type or say it and it's com-
pleted by autocomplete, or bookmarks the site.)
FIGURE 9.2 Conversion Path Visualization
Organic Search Homepage: 70,000 Shop Our Sale
Facebook: oe
10,000.
Email Newsletter: ns Styles
10,000_
Instagram: i More syvies
5,000_
Influencer Blog Posts: Doorbuster Deals
5,000
Direct Traffic: a ae
40,00( New Products
Page
Finally, we can see a range of other ways in which users have come to the site. They may have
entered the site twice in a row directly, found the site via organic search, then returned directly, or
even made multiple direct visits after an initial visit from a referral link. In addition, a small num-
ber of users came to the site multiple times from the same or different referral links or come to
the site directly, then later returned via a web search, perhaps after forgetting the address or brand
name.
Understanding these different conversion paths is critical for measuring the success of dif-
ferent marketing campaigns. For instance, let's say Jeff's Hats invested heavily in search engine
optimization (SEO) over the last two quarters. We can see in the conversion paths report that
organic search led to the highest number of conversions of any channel. We also see the specific
paths that organic search involved before conversion. Most visitors went directly to the site after
finding the brand in organic search, making a purchase, while some visited the site, left, then came
back later. We see that they typically did not engage with the brand on other promotional chan-
nels, such as social media, before buying after an initial organic search visit. This can tell us that
organic search is effective, SEO investment is working, and that the brand should focus on the land-
ing pages people view after clicking on, rather than additional marketing channels that are not a
critical part of the buyer's journey.“ Such clear customer journey mapping can help brands focus
their marketing efforts where they get the greatest ROI, while also measuring the effectiveness of
existing marketing programs.
Conversion Against Other Metrics

One of the most valuable ways to use conversion data is to examine it in the context of user behav-
iors that contribute to those conversions. For instance, are conversions higher from pages with
overall low bounce rates, or does a page's bounce rate have little correlation with the number of
conversions associated with the page? Do certain types of content, such as blog posts, play a role in
a large proportion of conversion paths? Looking at conversions by the page can provide us witha
lot of information. However, adding in other metrics along with conversion data can give us a fuller
picture of what's truly leading consumers to take the actions we wish.
Conversion by Acquisition Channels and Assisted

Conversions
One of the main questions CEOs often ask of their marketing teams is: “Is our investment in
marketing delivering results? If so, what marketing channels are delivering the best results?” We
learned early in Chapter 8 that we can use acquisition reports to determine how different market-
ing channels are driving traffic to our site. Marketing channels can vary widely, as we also learned,
in how much traffic they bring to a site. A single viral social media post may bring thousands to a
website, while a longer YouTube video may bring only a few dozen. They likewise vary in how many
of the visitors they bring end up converting on the site. That YouTube video that brought only a
few visitors to a site may seem less impressive at first; however, if all of those visitors converted,
or bought, it may prove to have been a sound marketing investment. At the same time, that viral
social media post may not have reached a relevant audience, thus driving fewer conversions on the
site.
For this reason, marketers measure conversions by acquisition channel. It's a measure of what
percentage of traffic converted that was brought to the site by a specific acquisition channel. For
instance, during their spring skiing promotion, Jeff's Hats invests in producing video how-tos, daily
posts on Instagram plus other social media, and Google advertising. Each channel requires time
and financial investment, so the small brand wants to ensure each dollar is responsibly spent.
Brands can spend considerable resources on a range of marketing channels. Knowing which chan-
nels drove the most sales, as well as the most revenue, can help brands spend their marketing
budgets where they make the best impact. In this section, we will learn more about attributing con-
versions to the marketing channels that brought each converting visitor to the site.
233
Multichannel and Multitouch Conversions and Conversion

Funnels
For most consumers, it takes multiple different engagements, or touches, also known as touch-
points, to become aware of a brand, consider it, and make a purchase. Think about how you became touches or
touchpoints
aware of your favorite jeans brand. You may have seen the jeans worn by a friend, then later seen
the same brand in a social media post. Later, you may have seen an ad for the jeans in a favorite An engagement point with
a consumer, such as an
magazine, perhaps in a cut that perfectly fits your style. All of these touches engaged your interest, ad, social media post, or
eventually leading you into a store to make a purchase. Most conversions are multitouch email.
conversions, that is, conversions that involve multiple messages to the consumer. Several touch-
points may occur on the same channel, as when a fan clicks regularly on posts from a brand's social multitouch
conversions
media account. However, it's more typical for touches to occur across multiple channels, as in the
Conversions that involve
jeans example above. For this reason, multitouch conversions are often referred to as multichannel
multiple messages to the
conversions. The terms are not completely synonymous: consumer.
+ Multitouch attribution measures the conversion impact of multiple touchpoints, which can
multichannel
occur on one or many channels, and aims to attribute conversions to the right touches. conversions
¢ Multichannel attribution measures the same complex conversion paths, only with a focus on Conversions that involve
how channels work together to create conversions. multiple marketing
channels.
In both cases, the goal is the same: understanding the effectiveness of each channel, as well as
the ways in which channels work together to convert web users." multitouch attribution
Understanding these complex relationships can take time. Google Analytics provides a Venn Measures the conversion
diagram that makes analysis more intuitive. Venn diagrams are charts that show the overlap impact of multiple
touchpoints, which can
between one set of datapoints and another—in the case of multichannel conversions, the overlap occur on one or many
between different channels when a consumer engages with a brand on more than one channel. channels, and aims to
attribute conversions to
The multichannel conversion visualizer is a chart that helps marketers understand how and the right touches.
where the different marketing channels they deployed affected conversions on their website. Each
circle in this chart represents the number of conversions that involved each marketing channel, in multichannel
whole or in part. In addition, you can see the same level of overlap between visits that included attribution
both organic and direct touchpoints. Finally, we see that in some cases, users had direct, organic, Measures the same
complex conversion paths,
and referral touchpoints, and the relative number of times this occurred (the small section where
only with a focus on how
all three big circles overlap). This shows analysts more clearly how two or more channels overlap channels work together to
with each other in engaging consumers. This can show the relationship between two channels in create conversions.
bringing consumers to the site.

multichannel
Remember the example earlier of the jeans purchase. Seeing those jeans on multiple channels conversion visualizer
probably helped you remember the brand when it came time to shop. Engaging with the brand on A chart that helps
multiple channels gave you a richer understanding of the brand, while also improving your brand marketers understand how
and where the different
recall. This is because consumers often recall a brand better if they see the brand several times, in a
marketing channels they
range of contexts. Using the multichannel conversion visualizer, we can see the most powerful deployed affected
combinations of contexts, such as direct site visits in combination with seeing the brand in organic conversions on their
search results, thus better understanding the buyer's journey. This can further help us develop per- website.
sonas as well as optimize our marketing spend.
Assisted Conversions
Assisted conversions are a unique way of analyzing multitouch conversion funnels. Marketers
examine the role of specific channels in conversions that take place primarily on other channels.
They
For instance, many brands find that few of their customers convert directly from social media.
direct trace-
find a positive correlation between their activities on social media and sales, but few
social
able sales directly occurring when consumers click on social media content. They feel that
media benefits sales, yet they cannot directly attribute sales to social media links.
This is where assisted conversion tracking comes in; it tracks those conversions that were influ-
enced, or “assisted,” by promotions on more than one channel." For example, let's return to Jeff's
Hats. Julianne is tracking multiple campaigns across a wide range of channels. We know that mes-
saging is resonating differently with consumers on different channels. Julianne wonders, however,
whether the same consumers are seeing all of the different messages and just happen to be clicking
on a specific message at opportune times for them. A consumer may have seen Jeff's Hats adver-
tised on a snowboarding site, then saw Jeff doing a demo on YouTube, and decided to buy a hat
when they next needed one. Weeks later, they may have Googled for “Jeff's snowboarding hats”
when they decided to shop, clicking on one of the brand's pay-per-click ads. What marketing effort
truly encouraged this buyer to buy? How many messages did that consumer see? Julianne does not
need to wonder. Using assisted conversions reports, she can determine that 50% of social media vis-
itors had also seen an ad ina publication. Thirty percent of those who clicked on PPC ads had also
seen a social media promotion. That proves that social media has been effective in enhancing their
sales, even when consumers ultimately buy only after clicking on other channels.
Attribution Modeling
Assisted conversion reports and multitouch conversion funnels show a fuller range of marketing
attribution models
efforts that a consumer may have seen rather than attributing a conversion to the last promotion
Methods of distributing
credit for a conversion on which they clicked. Such reports offer marketers a range of attribution models, or methods of
among all the touchpoints distributing credit for a conversion among all the touchpoints a consumer may have seen. A linear
a consumer may have attribution model, for instance, gives equal credit to all touchpoints a consumer had with a brand,
seen.
while time-decay models give more credit to recent touchpoints. First and last attribution gives the
greatest credit to a consumer's first touchpoint and the last one, the one that led to the conversion.”
Varying attribution models can change the way marketers perceive the value of different chan-
nels. For instance, in Figure 9.3, using a linear attribution model, we see that organic search, a
referral link, and another organic search touch all played a role in a recent conversion."! Each touch-
point is given one-third of the credit for the conversion:
FIGURE 9.3 Attribution Modeling

Different traffic sources can all lead to conversions.
S ns Referral
e el i Ries
FER ;
Conversion
This is because we used a linear model, one that gives equal credit to any touchpoint that
brought a user to a site. Now, let's see how credit is distributed when we switch to a time-decay
model.
FIGURE 9.4 Time-Decay Attribution Model
ude Referral een seme

235
You can see that the last touchpoint, an organic search visit, gets 50% more
credit for the con-
version. This does shift slightly the ROI attributed to SEO efforts. However,
when we switch to a
last-click attribution model, we see a major difference.
FIGURE 9.5 Last-Touch Attribution Modeling
en
SEO efforts, those leading to organic search traffic, are given full credit for the entire conver-
sion, even though a referral link played a key role in the customer's path from visitor to consumer.
Analyzing conversion paths allows marketers to understand the relative roles of different market-
ing channels in fostering conversions.
Finally, some tools use machine learning (ML) (called data-driven attribution in Google Analyt-
ics) to allow marketers an even more nuanced view into conversion modeling. Using machine-learn-
ing algorithms, sophisticated analytics tools model the impact of specific ads on conversions using
an advertiser's own data. For brands that use advertising to drive site visits, using ML for attribu-
tion takes into account the unique searching, clicking, and buying behavior of a site's own visitors
to weight the credit for conversions for those ads that prove most impactful over time."! With a ML
attribution model, we can see the credit on our path distributed thus:
FIGURE 9.6 Machine-Learning-Based Attribution Model
Organic
Search
Here, we can see that most of the other models were wrong; referral traffic obtains the primary
credit for the conversion when using data modeling based on the site's own history of conversions.
Attribution modeling can help marketers explore the different levels to which channels sup-
port conversions. Recall that in conventional analytics, we can measure the sources that drove
traffic to a site but don't get insight into the different ways in which channels work together to
build a relationship with customers. By providing a range of more detailed models, attribution
modeling can help marketers understand how channels work together to create sales.
How Long It Takes to Convert: Time Lag and Path Length
We've learned how to use data to better understand the origins of converting web traffic. Marketers
can also use data to understand the amount of time and number of interactions between a con-
sumer's first touchpoint and conversion. The length of time between a consumer's initial inter-
action with a brand and their eventual conversion is an important data point for marketers. So,
too, are the number of clicks between the first click and the conversion. The longer a conversion
the
path, the greater the chance that a consumer will disengage before converting. Think of it as
time between when a customer enters a store and the time they arrive at a register to make their
purchase: the longer they wander the store, or wait in line, the greater the chances they leave
empty-handed.
time lag Measuring conversion times takes two primary forms: time lag and path length. Time lag mea-
Measures the time sures the time between a user's initial website visit and their eventual conversion. Some time often
between a user’s initial elapses between a first site visit and the decision to buy or contact sales. Generally, the more costly
website visit and their the purchase, the more time is needed to make a purchase decision."” B2B products also have
eventual conversion.
longer sales cycles, or times from initial awareness to sale, than B2C items."! Measuring time lag
path length thus should take into account industry norms. Understanding time lag can aid in planning market-
ing campaigns, including the timing of campaign launches as well as the duration and budgets for
Metric that tracks the
number of interactions a campaigns. Adequate time and budget for a campaign to increase conversions, as well as launching
user has before a campaign at a relevant time, can increase the likelihood of campaign success. In addition, know-
converting. ing time lag can aid in inventory decisions, allowing proper time to stock products. It can also
predict cash flows from both sales and inventory investments. Thus, though often used as a vanity
metric, time lag is a critical datapoint with implications throughout operations.
Path length, by contrast, focuses on user engagement on the website alone. This metric tracks
the number of interactions a user has before converting.
It provides the average number of engagements converting users had on a site, along with the
aggregate monetary value of conversions for users with a specific path length. It does not provide
what the specific engagements were.
FIGURE 9.7 Path Length
All Visitors
Home Page 180.8%
Step 1: Cart 10.5% 145.3% a
Step 2: Billing 7.7% |426.7% —
Step 3: Check Out ff5.4%

|420.4%
Path length can identify opportunities to improve user experience or highlight “leaks” in a con-
version funnel. Used in conjunction with the more complex funnel visualizations, user explorer,
and behavior flow reports, it can provide insights into how users go through a site before convert-
ing. For example, in Figure 9.7 we see that most users convert on the first interaction, for a path
length of one. A much smaller number convert with two interactions, while few convert after more
than three. This suggests that the site needs to be as appealing as possible to users, to encourage
users to convert on the first interaction. It may also mean that those users who do not convert on
the first interaction should be brought back to the site with retargeting ads, or those that target
past site visitors anywhere on the web, encouraging them to revisit the site. We will learn more
237
about retargeting later in this chapter. We'll also learn about

how to examine the exact pages vis-
ited by users, whether their path length is one interaction or ten,
in the sections on behavior data.
9.3 E-Commerce Data
Many sites are focused mainly on selling products. Such e-commerce sites represent up to 24 mil-
lion sites worldwide; they are expected to account for 80% of consumer purchases by 2040." It's
no surprise that web analytics tools focus on measuring e-commerce performance. In this section,
well learn about key e-commerce metrics.
Revenue
The single most important metrics in e-commerce are revenue measures. Sales are the reason
e-commerce sites are built, so measuring the details of each sale, where it originated, its dollar
amount, and the characteristics of the buyer, are critical success metrics. In addition, marketers
want to know about the performance of specific products on an e-commerce site: What products
are selling? Which are less popular? What role do price and promotions play in encouraging sales?
Typically, brands use data from another source, such as their accounting system, to verify rev-
enue data for e-commerce. Accounting systems can provide exact, granular data on incoming and
outgoing funds, tracking sales to the penny as well as their associated expenses. The backends
of e-commerce systems also provide data on such revenue factors as returns, thus more closely
reflecting actual revenue. However, accounting data often has a lag time as accounting teamsneed ,
to reconcile monthly books to update profit and loss or other statements. In addition, market-
ing teams often do not have full access to accounting systems, especially in mid-size companies
with data silos. Thus, web analytics can provide a valuable close estimate of revenue for marketing
decision-making purposes. Whenever possible, marketers should utilize accounting or e-commerce
system data to measure the metrics discussed next. For this discussion, we will use the data from
Google Analytics, with the caveat that the same data can be pulled with more effort but more accu-
rately from accounting systems. Regardless of how it's sourced, revenue data is absolutely critical
to understanding e-commerce marketing success. In this section, we'll get to the heart of advanced
e-commerce metrics by understanding revenue data.
Product Revenue by Category
Different types of products account for different amounts of revenue for an organization. For
example, imagine a men's clothing retailer, Jack's. They sell limited-edition T-shirts, shorts, jeans,
khakis, and button-down shirts, as well as accessories such as backpacks, hats, and phone cases.
Of all their products, they sell a lot of T-shirts but are unsure of whether August's revenue, when
they sold a lot of backpacks and phone cases for back to school, was different. Looking at product
revenue by category, they can see that backpacks edged out T-shirts as the product category con-
tributing the highest amount of revenue.
Another example can be seen in Figure 9.8. Here, we see data from an online store sells a range
of pet products. In this example, products are arranged into very broad categories; for instance, all
treats are organized as a single category, “Treats,” regardless of flavor, to make it easier to under-
stand consumer buying trends. How products are categorized in analytics reports are directly
related to the product categories the site owner specifies in the setup of their e-commerce site. In
other words, the e-commerce team controls the categories, which can be set to whatever names are
most relevant to their product lines. Here, the merchant sells a wide range of products, so it makes
sense to use these broad groupings.
FIGURE 9.8 Product Revenue by Category
Categories Q
() Category ¢ Product Quantity * Unique Purchases ¢ Product Revenue
C] | 1. Treats 89 32 $660
C) 2. Toys 75 1 $375
L] | 3. Accessories 67 6 $788
[J 4. Hygiene 45 3 $754
{} | 5. Health 15 7 $1,540
(6. Food 57 16 $970

{J | 7. Clearance Items 86 20 $908
Categories don't have to be directly related to product types, as in the above example. Cate-
gories can also be set up to track specific qualities of products. For instance, a brand can place all of
its discounted items into a “Clearance Priced” category. When it comes to pricing strategy, marketers
may differ in opinions as to whether deep discounting is a sensible customer-acquisition strategy.
By tracking revenue from clearance sales, the brand can at least obtain information on how effec-
tive sales are in driving revenue. By using customer relationship management (CRM) or marketing
automation data, they can later track whether consumers who bought sale items ultimately had an
acceptable CLV. However, the topline revenue data below also provides critical insight into the ROI
of discounting.
By setting their categories in their e-commerce site at the right level of detail, marketers can
then easily measure product category performance. With this data, they can make product, pro-
motion, and pricing decisions. We've learned how we can use this report to understand the role of
discount pricing. Brands can also compare the performance of different levels of product offerings,
239
from premium to lower-priced options. They can measure, as we saw in the T-shirt
example, what
products drive the most sales and thus may merit investment. They can also measure
the impact
of product type specific promotions, even when those promotions are offline. For example,
let's say
Jack's decides to run an outdoor ad promotion for their hats. They deploy ads on public transporta
-
tion, billboards, and at gas stations. Though they use a special URL to track responses, they
know
that many consumers won't use the URL. Thus, they also decide to measure revenue growth for
the hat product category before, during, and after the campaign to measure whether the campaign
drove revenue from hats. Revenue by product category can tell marketers a great deal about what
products are contributing most to sales, what price points are most attractive to customers and
whether those price points have the potential to be profitable, and how successful promotions of
specific product categories are in generating revenue.
Top-Selling Products
On the home dashboard for an e-commerce site, many analytics tools display a brand's top-selling
products. Typically displaying the products with the most purchases from the most recent seven
days, it shows the number of unique purchases for each product. Unique purchases are important
because they show the number of individual completed shopping carts that contained an item. It
does not reflect the quantity of each product sold in a given week. For example, Jeff's Hats sold
eighteen blue wool hats in one week. Of those, three were purchased together by the same per-
son on the same online shopping trip, two were purchased together by another shopper, while the
remaining eleven were purchased one apiece, at separate times throughout the week. Although the
number of hats sold is eighteen, the number of unique purchases is thirteen, as only thirteen dif-
ferent shopping trips accounted for the eighteen hats sold.
Tracking top-selling products is important across the 4Ps of marketing. It can track the success price sensitive
of different promotions. For example, Jeff wore the blue hat in the recent Instagram story about Used to describe
skiing in Utah, indicating that perhaps the story contributed to the success of the hats. It can also consumers who change
their buying behaviors in
track the popularity of different products at a glance. It may also offer insight into pricing. For
response to pricing
instance, if the most popular products are lower-priced items, then this can indicate that a site's changes, for instance, by
current shoppers are price sensitive and thus that a pricing strategy aimed at cost-conscious con- buying more when a
product is sold for a lower
sumers may be important.
than usual cost. This is in
Like many metrics, most popular products data is most effective when measured over time. contrast with consumers
who are not price
Interesting patterns can emerge from data when viewed over several seasons, for instance. Mar- sensitive, and will
keters can track whether certain products grow in popularity after a given promotion. They can purchase a product at the
also see how the most popular products vary seasonally, as well as by important other metrics, such same volume even if the
prices changes, provided it
as acquisition channel. Understanding seasonal variations in demand can help brands better fore- remains within their
cast inventory, as well as adjust pricing, charging more for in-demand products while discounting budget.
those with waning demand.
Understanding top selling products by acquisition channel is important information for pro-
motional planning. It can help brands create ads that target the consumers of each channel better.
For example, imagine a candy brand, Sweetlies. They promote extensively via an email newsletter to
past customers, on social media, and TV, where they target viewers by psychographic, tracking offer
redemptions with a special URL. They find that their most popular product among consumers who
came to the site via social media promotions is their fruit drops, while customers who responded
to the TV offer order chocolate bars in the highest numbers. This can help the brand design custom
e-com-
ads for each channel. Understanding top selling products is critical information for any
for online retailers. Focusing on it
merce operation; it should be a focus of any analytics reporting
strategy, and pricing mod-
can improve profitability, while optimizing inventory levels, promotional
els.
Average Order Value

Another important metric is the average order value (AOV). This is the average value of orders
average order value
during the a period.
(AOV)
The average value of When considered in conjunction with the most popular products, it can help indicate whether
orders during the time the most popular products were higher- or lower-priced than the average. More importantly, it can
period.
also tell brands whether consumers are making large or small dollar-amount purchases on the site,
thereby partially indicating a brand's share of wallet, or what percentage of their budgets con-
share of wallet
sumers spend with a merchant.
What percentage of their
budgets consumers spend If average order size grows, that’s typically a good sign. It means that consumers are spending
with a merchant.
more with a merchant on each shopping trip. In addition, since it costs money to acquire each cus-
tomer, the more a customer spends with a brand, the faster the brand earns back the amount they
customer acquisition
spent on customer acquisition for each buyer. However, the reverse, a reduction in average order
The process of acquiring
value, is not always cause for concern. If total revenue stays the same or grows, then it means that
customers, usually via
marketing. more customers are buying, but they are each buying less. That can mean that a different customer
segment is shopping the site—those who only want a smaller quantity of the goods offered, for
instance. Imagine a bulk grocery store, Grainfield. They sell flour in 25 lb., 10 lb., and 5 lb. bags. They
also sell cereal, coffee, and other staples in very large to quite small containers. Recently, they
expanded their marketing from suburban households with children to single urban professionals.
While sales have gone up, average order value has gone down, as these new customers simply don't
want flour in 25 lb. bags. Though their lifetime customer value proves to be higher than that of sub-
urban shoppers, these new customers typically have less need for large orders and thus reduce the
site's average order value without depressing its sales. AOV thus must be taken in context at all
times by marketers.
Q
HOW TO
"CALCULATE
YOURAOV
Understanding your customer demographics and comparing AOV to net revenue are critical to
making decisions based on this metric. When used in context, it can provide valuable insight into
the effectiveness of marketing efforts, the needs of customer segments, and the brand's share of
wallet.
241
Average Order Value and Total Revenue by Channel
We can also track the amount of revenue generated by promotional and placement
efforts by
tracking average and total revenue by channel metrics. The average order value by channel
metric
measures the averaged value of purchases that originated on specific marketing channels.
For
instance, let's say Jeff's runs a coupon promotions as well as working with several winter sports
sites as affiliates, paying them a percentage of sales for any customers they send to their’ website.
We can see that no orders were generated by the coupon promotion, while the affiliate program
generated purchases that averaged more than $46. Affiliate programs are special arrangements
between e-commerce brands and other websites, such as blogs, as well as social media influencers.
In exchange for a percentage of sales, the affiliate agrees to link to the brand, often with promo-
tional messaging. In this example, this arrangement brought several shoppers to the site, and they
spent an average of $46.71 on their purchases.
Marketing campaigns drove the most profitable transactions: Sales originating from market-
ing campaigns had an average value of more than $80. By contrast, sales originating from affiliates
generated $46.71, on average. Coupons drove no sales. Knowing the value of orders from different
channels helps marketers to identify the most profitable promotional and distribution channels.
In this example, affiliates appear more profitable than the coupon code, but much less profitable
than the other marketing campaigns, based on the average order value of the purchases made by
consumers who found the site via each channel. However, when total revenue by channel is exam-
ined, the data tells a different story.
Product Performance
Another key set of interrelated e-commerce metrics is product performance. In the product perfor-
mance report, we can see the overall sales of each product on our website, its total revenue, number
of unique purchases, and how many times it was returned. As we can see in the report below, the
most revenue during the time period was driven by sales of the zip hoodie, which generated $1,500
in sales. The highest number of sales was of the long-sleeve charcoal top, which sold thirty-seven
times.
On the right of the report, we see two additional metrics: the cart-to-detail rate and the cart-to-detail rate
buy-to-detail rate. The cart-to-detail rate measures the percentage of people who clicked to view a The percentage of people
product detail page—the page typically showing more information about a product—and then who clicked to view a
product detail page—the
added it to acart. You can see in this report that the number is 0 for all products, which can indicate page typically showing
measurement bugs with this report. We see that the buy-to-detail rate is showing as 6.25% for the more information about a
“navy speckled tee,” indicating that 6.25% of people who clicked to see more information about that product—and then added
it to a cart.
tee ultimately purchased it. The buy-to-detail rate is even higher for the “camp mug’: 10% of those
who learned more about the product bought it. The cart-to-detail and buy-to-detail rates are a buy-to-detail rate
strong indicator of the effectiveness of a product description page. High buy-to-detail rates indicate
The percentage of people
that the page presents the product effectively, and/or that the product's features, as shown on the who clicked to view a
page, meet consumers’ needs. If the cart-to-detail or buy-to-detail rate are low, brands should test product detail page—the
product detail pages, exploring all elements, from photography to product descriptions. Optimizing page typically showing
more information about a
product detail pages based on the data in the product performance report can make a significant product—and then
positive impact on conversions, so it should be a high priority. purchased it.
Shopping Behavior
engage in
The shopping behavior report is a simple visualization presenting how many site visitors
often as a
what shopping actions. Different tools present this report with different visualizations,
funnel. As we see in the report for Jeff's Hats, most site visitors buy nothing and view no products.
372
A smaller 1,891 viewed products; of those, over 1,400 failed to put products in their carts. Finally,
added items to their carts in the time frame, 246 reached the checkout process, and only 22 com-
pleted their purchases.
FIGURE 9.9 Shopping Behavior Report
50,000 Visitors
1,891 Product Views
372 Put Product in Cart
246 Reached
Checkout Page
Shopping cart abandonment rates are typically over 70%, so this data is in line with e-com-
merce norms. Nonetheless, brands wish to optimize the number of shoppers who complete pur-
chases. The shopping behavior report provides a quick “pulse check” to determine the current level
of shopping behavior on a site.
9.4 Technology Information

Many web analytics metrics focus on measuring the effects of marketing, such as acquisition, con-
versions, and events. However, other metrics help marketers understand visitors better. In addition
to monitoring web traffic, many web analytics tools also monitor users in aggregate. This data pro-
vides site owners with valuable insight for planning their marketing. Visitor data is also useful in
conjunction with traffic data, to better understand not only what is happening on the site, but who
is engaging in different behaviors. Visitor data can tell marketers, for instance, whether visitors
who access the site on their mobile phones are more likely to share content on social media than
those on desktop computers. It can illuminate whether certain segments of users, such as sports
enthusiasts, are more likely to buy than the average visitor. User data, when used either alone or
in conjunction with traffic data, provides critical information for planning, monitoring, and eval-
uating marketing efforts across the 4Ps. In this section, we will look at the most basic user data:
metrics on the types of devices and networks consumers are using to access a website. Later, in
this chapter's section on user metrics, we'll explore more complex user data, such as demographics
243
and psychographics. First, let's examine fundamental technical

data, and what it can tell us about a
company's website visitors.
Device: Mobile Desktop, Tablets

Device data tells site owners what devices visitors are using to access webpages. On
a basic level
it provides data on the general type of device users are on: phones, computers, or
tablets. Digging
deeper, more detailed reports in tools such as Google Analytics provide the exact phone models
for
mobile users, as well as tablet models.
Fr
This is valuable data for several different marketing functions:

For web design planning, knowing the proportion of mobile versus computer users can help
prioritize how much to emphasize mobile-friendly design features or those more suitable to
desktop or laptop users. For example, detailed visual designs are too busy on a small screen, yet
may be very appealing on a large one. If, however, the majority of a site's visitors are on mobile
devices, investing in the graphic design of elaborate images may be a poor investment.
For campaign planning, understanding the devices consumers use to reach a site can help
determine what channels, device types, and content to target. For instance, most social media
advertising platforms allow advertisers to target their ads only to mobile users, or to exclude
mobile users from a campaign. By knowing the device types of a brand's most-engaged visitors,
brands can target campaigns at users only on those devices. Conversely, if a brand desires more
mobile or non-mobile traffic than they currently acquire, they can target ads at those device
types where they wish to have more engagement.
For overall marketing strategy, tracking different visitor actions depending on devices used
can help marketers understand the customer journey. For instance, mobile users may gravitate
directly toward low-price purchases on a site, while computer users watch videos, read blog
posts, and research high-ticket items before making larger purchases. That would tell a brand
that mobile users visit their e-commerce site mainly for impulse purchases, with a short cus-
tomer journey of a few clicks, while desktop users have longer customer journeys and different
shopping intent. With this data, brands can target messages, content, and experiences to cus-
tomers’ unique journeys based on their device types.
With device data, as with many marketing datapoints, information often presents a “Which
came first, the chicken or the egg?” challenge. If a site's mobile users are unlikely to buy in contrast
with desktop users, is that because mobile users have other priorities or because the mobile com-
merce experience is substandard? Thus, as with other metrics, it is critical to examine multiple
datapoints. Especially in web analytics, user experience design decisions are best made with addi-
tional inputs, such as user interviews. Nonetheless, device data can provide important insight into
the actions, needs, and customer journeys of users on different types of devices.
Cross-Device Tracking
Google Analytics and other web analytics tools provide cross-device tracking. This allows mar-
cross-device
tracking keters to ascertain whether visits using different devices were all initiated by the same user. For
instance, with cross-device tracking, marketers can see that a user who visited a site from their lap-
The ability to track a single
consumer across all the top on Thursday, viewed four pages, and left is the same user the following Monday who was on a
devices they use. phone and purchased $2,000 worth of products. Tracking the behavior of web users across all of
their devices provides marketers with two main benefits:
« Accurate tracking of web data, to understand how many visitors a site truly has. This greater
accuracy can help marketers correctly attribute web conversions to specific campaigns, avoid
over-counting site visitors, and more accurately predict traffic.
+ Deeper understanding of the customer journey. Plotting website visits as single points helps
marketers understand what happens during a single website visit. However, once marketers
can see every website visit of a single customer, they can understand the complete experience
visitors have with the site. Rather than examining visits in isolation, analysts can map entire
engagements with a site over the course of multiple visits and long timeframes.
For example, let's imagine a chocolate manufacturer, Glenda's. They sell chocolate in chain
stores, online through their own site, and through seasonal popups. Recently, Glenda’s found that
many large purchases come in online from direct traffic—that is, traffic that originated when a
visitor entered the Glendas web address directly into their browser. These direct-traffic shoppers
purchase an average of $159 worth of chocolate, which is double the average online purchase of $80.
245
Their marketing team wonder how these large purchasers hear about the
site, Using cross-device
tracking, they find that 70% of direct, desktop, and laptop traffic that converts
with high shopping
cart values is preceded by at least one mobile visit. In other words, most of these
large purchasers
had been to the site before, on their mobile devices.
Moreover, most customers who made large purchases on their desktops later returned
to the
site on another desktop, as well as on mobile devices. At these times, they made smaller purchases.
Cross-Device Tracking In 2022

https://www.teamsi.com/insights/insights/2021 /08/30/ask-the-experts-android-will-eliminate-
cross-device-tracking-in-2022
Looking at geographic data for the first, mobile visits of customers who subsequently made
large purchases on desktop computers, the marketing team saw a pattern: These mobile visits were
taking place in cities where they had launched a high-visibility, holiday season outdoor campaign,
with posters at bus stops and on public transportation. Looking at both the geographic data and
the timing of these mobile website visits, they found these visits took place during the morning
and evening commutes. They also took place soon after a local popup sale. The large purchases on
desktop or laptop computers took place in the evenings. Piecing this data together, the marketers
developed a theory that consumers were seeing ads for Glenda’s at bus stops and on the subway
on their way home from work, checked out the Glenda’ site on their phones, attended a popup
sale, then went home and bought more products on their computers. The ads promoted large pur-
chases with a free shipping offer for purchases over $100, although most buyers were purchasing
well beyond that amount once on the site.
In addition, remember that, after that large initial purchase, consumers returned to the site,
purchasing smaller shipments on their phones or on another desktop computer. The timing of the
mobile purchases and purchases from other desktops were different, however: Mobile purchases
tended to be scattered throughout the day, while the purchases from a different desktop took place
between the hours of 8:00 a.m. and 6:00 p.m. in the shopper's time zone. It appeared that loyal cus-
tomers were shopping on impulse on their phones whenever they wanted to replenish their supply
of chocolate. They also shopped at work, from their desktops. These workplace purchases were
often marked as gifts, shipped to other than the purchasers’ address. Thus, it appeared that, once
loyal to the Glenda’s brand, customers viewed the luxury sweets as suitable corporate gifts.
This set of suppositions needed additional proof before the marketing team made decisions.
The cross-device tracking data provided a useful starting point for deeper investigation. In order to
confirm these hypotheses, the marketing team conducted several tests:
1. They used a special, tagged web address on bus and subway ads to confirm that visitors had
been inspired to visit by those specific ads. The special web address appeared only on the pub-
lic-transportation print materials, so any traffic to that special link was clearly tracked to the
out-of-door campaign.
2. They conducted a survey of customers who had purchased more than $150 in one visit at any
time over the past twelve months. The survey asked customers where they had first heard of
Glenda’, when they bought, why they bought, and whether they bought gifts on the site.
3. They invited a focus group of loyal shoppers to explore deeper their motivations for buying,
customer journey, device usage for e-commerce, and buying patterns.
Through gathering these additional data, Glenda's found that the customer journey they had
hypothesized from cross-device tracking, geolocation, time, and conversion data in their web ana-
lytics tool was largely correct. Customers saw Glenda’s ads while commuting, checked out the brand
on their
on their phones, went home and made a purchase, then returned to make impulse buys
(or
phones, while making larger purchases on their own computers and buying corporate gifts
a range
snacks for themselves) at work. In this example, we can see how tracking visitors using
of metrics allows marketers to understand customers better, verify the impact of promotions, and
map the customer journey.
Other Technology Data

In addition to tracking mobile, computer, and tablet usage, most web analytics platforms provide
data on users’ browsers, operating systems, and internet service providers. Of these, the most often
used technology data is browser type. Knowing whether users browse the web with Chrome, Fire-
fox, Safari, Edge, or other browsers tells web developers important information for design testing.
Because every browser renders web pages differently, a webpage can look different in Chrome,
for instance, than it does on Safari. Once dramatic, these differences have become less significant;
however, cross-browser compatibility is still a consideration for every web design." Though most
rendering differences are trivial, some can impact the attractiveness and usability of a site. Know-
ing the top browsers consumers use to access a site can prioritize development for cross-browser
compatibility.
Site speed is an important factor in how user-friendly consumers perceive a site to be. Research
has shown that 1% of users will abandon a website for each 100-millisecond delay in how quickly it
loads on their screens.™! The type of internet connection consumers use plays a role in how quickly
pages load. If a brand's target audience lives mainly outside large urban centers, they may have
slower internet connections than the brand’s web team, leading to site loading issues that may
alienate the core audience. Hence, it's also important for web developers to understand the internet
connection types of a website's users.
Although most of these technology metrics are more useful in the design phase of web mar-
keting, it is important for marketers to be aware of them. At a time when chief marketing officers
(CMOs) spend more time on technology than an organization's technology lead, the chief infor-
mation officer (CIOs), marketing typically owns website development. Understanding metrics that
inform the site experience is beneficial when leading a site design or redesign.
9.5 Behavior Data
Several analytics reports provide insights into site visitors’ behavior. These reports map a visitor's
entire set of behaviors during a site visit or across multiple visits. In customer journey mapping,
conversion path analysis, and UX design, behavior data provides insights that cannot be found
readily elsewhere. Let's learn more about these critical reports.
Individual Behavior Reports

Individual user reports look at the site usage patterns of each individual visitor. It tracks their
actions on a site across all of their visits, whether on desktop and mobile devices.
Let's return to Impact Hub Boston, the social-enterprise community featured in the case study
in Chapter 1. In Figure 9.10, we can see a user's actions across multiple visits to a website covering
several days. We see this anonymous user visited the site five times. On their first visit, they viewed
one page. Subsequent visits involved viewing up to eleven pages. Each visit was acquired through
247
organic search—the user found the brand using Google search each time they
visited the site. On
average, they spent 5 minutes and 11 seconds on the site per visit.
FIGURE 9.10 Report on Individual User
Client ID Channel
client_135145664 — Organic Search Sessions Sessions Duration
Device Platform Source/Medium reg 00:05:11
Web Google
v Nov 17, 2022

1 session
> 10:54 AM © 02:35 © Organic Search ©7
¥ Nov 21, 2022 1 session
> 11:10 AM 6 00:00 GS Organic Search ©

v Nov 18, 2022 1 session
> 11:20 AM 00:04 © Organic Search @2
Y Oct 30 2022 1 session
> 10:01 AM © 02:30 Organic Search O11
Y Oct 16 2022 1 session
> 9:32 AM © 00:00 ® Organic Search Oi
Clicking on the eye icon next to the number of pages viewed reveals the name of each page. We
see that on their last visit, the user viewed seven pages, most related to events:
FIGURE 9.11 Individual Report on Individual User, Showing Pages Viewed
Client ID Channel
client_135145664 Organic Search Sessions ~ Sessions Duration
Device Platform Source/Medium 5 00:05:11
Web Google
¥ 10:54AM ©02:35 © Organic Search
{]10:54AM © _ Viewed Meditation - Impact Hub Boston /event/meditation-2018-09-18
{110:53 AM © _ Viewed Home - Impact Hub Boston
(]10:53 AM © _ Viewed Events Archive - Impact Hub Boston /events-calendar
{]10:53 AM © _ Viewed Events Archive - Impact Hub Boston _/events-calendar/month/
(]10:53 AM © _ Viewed Events Archive - Impact Hub Boston _ /events-calendar/
{]10:53AM © _ Viewed Events Archive - Impact Hub Boston _/events-calendar/
(10:51AM © _ Viewed Home - Impact Hub Boston

1 session
vy Nov 21, 2022
> 11:10 AM 00:00 Organic Search ©O1
The user appears to have been interested in programming taking place at the Boston co-work-
ing space. They viewed the events archive several times, reading about the meditation programs
in more depth. This site does not offer e-commerce conversions for event space, so revenue is not
tracked for this user. To preserve consumers’ privacy, users are only tracked using this aggregate,
anonymous tool, so for this brand, tracking this visit to a sale is avoided unless the user opts in
via a survey. However, this data nonetheless provides useful information about visitor behavior. It
tells us that visitors return to the site often, seeking up-to-the-minute information about upcoming
events, as well as browsing past events to learn about typical offerings. They will use search engines
to find the site, even if they have been to the site before. In addition, their visits vary in length from
a single page to double-digit pageviews. Knowing this information can help the site's owners create
the site navigation, content, and structure that meets its visitors’ needs. When conversion track-
ing is made possible, it can also show what types of on-site behavior lead to the most conversions.
Even when conversions occur off-site, it is still possible to identify proxies for conversion behavior.
For instance, this same user performed an eleven-page visit two months earlier. In this visit, they
engaged in conversion behavior:
FIGURE 9.12 Report on Individual User, Showing Conversion Behavior
Client ID Channel Sessi Sessions Duration

client_135145664 Organic Search Sarees See ee
Device Platform Source/Medium 5 00:05:11
Web Google
Y Oct 30, 2022 1 session
>» 10:01 AM & 02:30 © Organic Search © 11
(}10:01 AM Viewed UN Perspective Series: Good Health and Wellbeing - Impact Hub Boston /event/un-perspective-series-good-health. . .
—
(]10:01 AM Viewed A Certified Celebration - Impact Hub Boston —_/event/a-certified-celebration/
(J 10:01 AM Viewed Setting Up Shop: How to Start a Business - Impact Hub Boston _/events/setting-up-shop-how-to-start-a-business/
(_]10:01 AM Viewed A Certified Celebration - Impact Hub Boston _/events/a-certified-celebratlon/
(}10:01 AM Viewed Events Archive - Impact Hub Boston /events-calendar/
(}10:01 AM Viewed Rent Event Space - Impact Hub Boston = /rent-event-space/
[] 10:00 AM Viewed Schedule Event Space Rental - Impact Hub Boston /schedule-event-space-rental/
(] 10:00 AM Viewed Rent Event Space - Impact Hub Boston _/rent-event-space/
(] 10:00 AM Viewed Connect Membership - Impact Hub Boston —_/connect-membership/
(_]9:59 AM Viewed Membership Levels - Impact Hub Boston /membership-levels/
(_}9:59 AM @
8
6
©6606606064006040
Viewed Home - Impact Hub Boston
After viewing several of the Hubs events, they accessed the event space rental form. This is
the form clients fill out to rent a lecture hall or other space for a business event. Thus, even with
limited conversion tracking, the marketing team was able to identify this as a converting visit. By
looking at multiple such visits, they found that the event pages are a critical part of many con-
version activities. Although it tracks users anonymously in Google Analytics, similar functions in
other web analytics platforms track logged-in visitors by name. Brands need to consult applicable
local laws to determine whether such tracking is permissible. In all cases, they should disclose to
users that their actions are tracked.
The user explorer offers strong insights from individual site visitors’ real actions. It can show
the frequency with which visitors return to the site, the patterns of their interactions with the site,
and how different types of users find the website. It offers yet another data source for the close
understanding of customers that advanced web analytics data provides.
249
Behavior Flow
Of all the reports in Google Analytics and related tools, the behavior flow report intimidates the
most users. It presents a complex flowchart of how users navigate a site, with raw numbers
on how
many users move from one page to another.
Marketers should not be intimidated by this report. It rewards close scrutiny with much information
insight into the navigation patterns of visitors. By looking at behavior flow reports, site owners can architecture (IA)
quickly see the drop-off points where visitors lose interest, leaving a site. They can also discover The structure of
unexpected navigation patterns. Often, behavior flow reports are used to enhance a site's user expe- information on a website,
rience as well as its information architecture. Information architecture (IA) is the science of especially pages and
navigation structures.
organizing information such that it is easier for humans to access. A subdiscipline of web design,
IA impacts conversion rates, as users often abandon sites that are difficult to navigate.
However, UX and IA enhancements for conversion rate optimization (CRO) are only two appli-
cations of behavior flow data. Such reports can also provide needed insights for product strategy,
promotional campaigns, and branding. For instance, picture an e-commerce site that sells sneakers
and hosiery. The web team initially anticipated that consumers looking at sneakers would then
navigate to look at socks, then perhaps view their shopping carts. Instead, by examining behavior
flow reports, they find that 30% of users go from sneaker pages to the site blog. From there, 8%
go to the Contact Us page. Such unexpected navigation helps the design team understand that
some users are more interested in getting style tips from the blog. Examination of customer service
calls that coincide with these site visits indicate that many callers ask about the availability of less-
popular shoe sizes. These insights then allow the product team to understand that expanding size
ranges can help the brand reach a significant proportion of site visitors. Thus, behavior flow reports
become part of the analytical data presenting needed insights for both UX and product-develop-
ment teams.
Promotions and branding are also informed by this data. As with page visit data, behavior
flows can show what topics on a website are of most interest to visitors. This can inform what fea-
tures brands promote in their communications, for example. It can help site owners understand
what content is viewed together with what other content, in which order. This can help brands, in
turn, know more about how customers think about the brand, as well as their priorities, as they
change from moment to moment during a site visit.
Measurement Using Advanced Tagging
Advanced data collection is often made possible by tagging. In the last chapter, we learned about
tagging URLs to measure the traffic generated by specific content on the web, such as ads or blog
posts.
Tags are also added to websites themselves. These codes and special character strings can send
data to the web analytics tool. Web developers add small amounts of code to websites, just as mar-
keters add the special strings of characters to a web address, as we learned in Chapter 8. These codes
and strings of characters send data to tracking tools, including web analytics tools, ad platforms,
and social media sites.
Tags can be added to websites to enable tracking of activities on a webpage that cannot be
size ofa
tracked by standard analytics tools. Tags can also add tracking pixels, or special images the
single pixel, making them invisible. Such pixels enable other types of tracking, such as monitoring
user's
Facebook users who also visit a website, connecting the website visit to a specific Facebook
web behav-
account. These pixels are also used to deliver targeted ads to consumers based on their
jors.
One of the most popular tagging platforms is Google's Tag Manager. It allows technical teams
marketing
technology stack to create custom tags to measure a range of more complex activities on the web, from how users
interact with forms to whether they scroll to a particular spot on a page. Many marketing automa-
The integrated set of tools
and technologies that a tion platforms integrate tagging, as well. Whether using a standalone tag manager or one that is
company uses to deploy integrated with a firm's marketing technology stack, marketers use tags to gather data that is dif-
and manage their
ficult to gather using only standard web analytics. In this section, we will explore some of the most
marketing.
common types of data obtained through advanced tagging. This is not meant to be exhaustive or
technical. Rather, it's an overview of the more fine-tuned analytics that marketers can achieve
using common tagging practices, such as event tracking, form conversion analysis, and social media
integration.
Event Tracking
Events are user engagements with interactive elements on a site. An event may be a watched video,
a content download, or any other interactive click. For instance, a user may come to a cooking
website, click to watch a frying tutorial video, pause the video, start viewing again, then, finally, com-
ment on the tutorial. Each of these actions is a trackable event.
Tracking events provides marketers with strong insight into users’ engagements on a site. It
can tell them how interesting users found a specific marketing content item, such as a video. It
can also provide aggregate data on how engaged consumers are with a site's interactive elements.
Increasingly, conversions take the form of interactive events, such as watching a demonstration
video. As sites offer users more interactions, measuring conversions has become more complex.
Tracking events provides flexible means to monitor a rich range of multiple conversion behaviors.
Event tracking allows marketers with sophisticated websites to track those conversions that can-
not be tracked with older means, such as measuring forms filled out or pages visited.
The event tracking feature in Google Analytics also allows refinement of other data-gathering
mechanisms for complex websites. For example, a traditional site may have one content item per
page; thus, measuring engagement with those content items can be performed by looking at page-
level reports. Sites featuring more contemporary designs, such as continuous scroll, may have a
range of content items, all on a single page. Measuring engagement with multiple content items on
a single page often requires using the event tracking feature, with user consumption of each inter-
active content item measured as a separate event.
Modern site owners should implement event tracking as a part of a robust web analytics pro-
gram. Nearly all contemporary websites rely on events for part of their user experience. Tracking
events is necessary for understanding all conversion actions, such as video engagements, on a
website. Marketing teams often hesitate to track events because setting up such tracking involves
some technical skill. However, event tracking in Google Analytics and other tools is becoming more
intuitive, and such tracking is rewarded with fuller insight. We will examine building analytics
capabilities within marketing organizations in Chapter 12.
251
Form Behavior Analysis
One specific type of event of interest to many marketers is how consumers fill out forms on the
site. Forms are prevalent on consumer sites: they are essential on business to business (B2B) sites, lead
where completing a form is the standard conversion from browser to sales prospect, or lead. When A prospective customer or
other stakeholder who has
lead generation (lead gen), or the development of longer lists of qualified sales prospects, is a key expressed interest in doing
goal of a site, analyzing forms can be an important method of optimizing lead gen efforts. You will business with a brand,
recall in Chapter 8 that we discussed goals, or measurable conversion-related actions that users can typically by contacting the
business. A lead has not
take on a site. Completion of forms can be measured as a goal; however it typically can only tell yet purchased anything or
marketers whether a form was filled out or not. If a form is complex, consumers may be willing to engaged an organization’s
complete the form, yet stop when too much information is asked. Recall that analyzing conversion services but has
expressed interest in doing
funnels helps marketers understand where in the conversion process consumers may drop; analyz- so. It’s the responsibility of
ing form behaviors serves a similar purpose, for form activities. Using Google's Tag Manager or an organization to engage
other tagging systems, marketers can track where in a form prospects stop filling in information or leads and convert them
into customers or other
whether they attempt to submit a form only to encounter technical difficulties. This information desired forms of
can help optimize forms and troubleshoot conversion issues. stakeholders, such as
donors.
lead generation (lead

Integrating Web and Social Media Data gen)
The development of longer
Another use of advanced tagging is integrating web traffic and social media data. For instance, lists of qualified sales
installing LinkedIn's tracking pixel on a site allows marketers to retarget those LinkedIn users who prospects.
have visited a website with ads on LinkedIn. Retargeting is when consumers are served an ad on
goals
the web based on their visit to a website. For instance, you may have browsed different pairs of
In web analytics,
jeans on a website, only to see an ad for those jeans on social media later that day. Those ads target
measurable
consumers using a tracking pixel or other tag, which records your visit to the website, then sends conversion-related actions
the data back to a social network, Google, or another ad network. Based on that data, the website's that users can take ona
site.
owners can then pay to have an ad shown to you on the social network, in your search results, or
around the web.
retargeting
For marketers, tracking pixels offer a valuable source of data. These pixels and other related A marketing method in
tracking tools allow marketers to see the demographics and psychographics of website visitors who which consumers are
served an ad on the web
have accounts on specific social media platforms. Let's go back to the LinkedIn example. Imagine
based on their visit to a
that you are a marketing manager at a sportswear company. You visited the website of a marketing website.
automation company, looking for information on their product, to use in your job. It's a popular site;
many other marketing managers do the same. The company uses LinkedIn's tracking pixel in con-
junction with their LinkedIn ads both to retarget site visitors and also to understand who visits
their site. They will be able to see that, for instance, 10% of their site visitors are marketing man-
agers, along with their typical ages, education levels, and other characteristics, based on the
information in site visitors’ LinkedIn profiles. Using social media tracking pixels helps the brand
combine their web analytics data with aggregate data on site visitors pulled from those visitors
LinkedIn profiles. Using this data, they can build a better profile of their users, including their
seniority levels, job titles, likely buying power, and roles within their organizations. Having such
specific information about their consumers can help brands build more accurate customer per-
sonas, target ads more clearly to specific customer groups, and better articulate their brand's value
to consumers.
9.6 Demographic and Psychographic

Data
Google collects terabytes of data on consumers every month: their web searches, sites visited, email
traffic if using Gmail, physical location, and behavior on social media platforms. Google tracks what
we search for online, what sites we visit, even what stores we enter and our commutes. This aggre-
gated data on users is among the most powerful databases of consumer behavior ever collected.
Website owners using Google Analytics can leverage this powerful aggregate data to understand
their website visitors.
Using psychographic and demographic data on website visitors is a key way to understand site
visitors. Reports can look at the psychographics and demographics of those site visitors who con-
verted, contrasting their characteristics with those of consumers who did not convert. This can
help marketers understand what types of customers are more likely to engage in conversions, mak-
ing it easier to target them.
Demographic Data
Sometimes, it's useful for brands to understand the demographics of their web visitors. If a brand's
offerings are particularly relevant to different ages or gender identities, understanding more about
these factors as they relate to site visitors is valuable data. By default, many analytics tools tracks
visitors genders and ages. For instance, in the example below, we can see that just over 60% of the
Google e-commerce store's website visitors identify as female (as of this writing, Google's demo-
graphic reports still use binary gender only; there is no information about future plans for more
accurate reporting). Most visitors are between the ages of 25-34, with many who are 18-24. This can
help marketers somewhat better understand customers, provided age and gender identity are fac-
tors in a product's marketing.
FIGURE 9.13 Demographic Data
Age 45.15% of totalusers Sex 48.67% of total users

50% :
40%
30%
) Male
60.4%
tee | i Female
10%
0%
18-24 25-34 35-44 45-54 55-64 65+
In-Market and Affinity Categories

For most brands, affinity and in-market categories are more relevant data for understanding con-
sumers than demographics are. These are different, but closely related, datapoints about a website's
audience, reflecting their consumer behaviors. In the report (right) for the same site discussed in
253
the previous section, we see that more than 31,000 visitors are value shoppers. That means
they like
to comparison-shop and often seek good value. That has critical implications for targeting
these
consumers. We learn further that they love movies and technology—a brand seeking
to appeal to
these website visitors may do well to tie in products to current movies, music, or
TV, as well as
increase the number of high-tech products on offer. This type of data about web visitors helps
us
to understand their needs and their intentions in visiting our websites. Let's look at it some more.
Audience Interests On Google Analytics
https://www. luiginervo.net/en/audience-interests-google-analytics/4268/
First off, let's define the difference between affinity categories and in-market segments. Affin-
affinity categories
ity categories are psychographic data. According to Daniel Gilbert, they represent consumers’ “long-
standing’ interest in a particular topic, whereas in-market segments are current shopping needs of Groups of consumers
categorized by the topics
those buyers."*! For example, let's say you have had an interest in the environment since grade in which they are currently
school. You attend climate change rallies, lead recycling efforts at your school, and take your elec- interested.
tive classes on environmental subjects. The environment is an affinity category of yours. At the
in-market segments
same time, let's say you are currently shopping for new headphones. You are not an audiophile;
once you decide on the right headphones, you will no longer browse sites about headphones or Groups of consumers
categorized by the types
show any further interest in the topic until the next time you need headphones. That means that of products they may be
you are in an in-market segment for headphones. You are currently shopping for these products, currently researching.
but they are not a steady interest for you. Both types of data about groups of site visitors—their
in-market segments and their affinity categories—are important data. Let's learn more about each.
Affinity Categories
Affinity category data about site visitors tells us about what truly matters to them. It tells us what
types of media they regularly consume, what products they buy often, and what content they like.
Armed with affinity category data, we can build a profile of our overall site visitors, as well as spe-
cific segments of them, such as converters versus those who do not make a purchase.
Take, for example, Jeff's Hats. They find that their site visitors’ affinity categories include green
living enthusiasts, which they expected. However, they also find a substantial portion of their site
visitors who convert are in the affinity category of coffee shop regulars. this makes them think that
perhaps partnering with local independent coffee shops to sell merchandise would make sense.
They introduce a line of coffee cup sleeves made from yarn left over from their hats. The products
sell out, as many of their existing customers see sleeves that match their hats in their favorite shop
and purchase them as impulse buys. The sleeves become so popular that the company also starts
selling them online.
Affinity category data can help add dimension to customer personas, which are profiles of typ- customer personas
ical buyers created to give marketers a full picture of their customers. It can reveal consumer Profiles of typical buyers
created to give marketers
interests that a brand may otherwise be unaware of; it can also help affirm data from other sources
a full picture of their
about customers’ lifestyles. Tracking affinity data over time can also help brands understand how customers.
their customers’ interests have evolved, measure success in reaching new audiences, and track
shifting tastes among a brand's regular consumers.
In-Market Segments
Remember, this is the
Let's take a look again at data on the Google Merchandise Store's customers.
deeper
website selling items with the logos of Google and its many brands, such as YouTube. Diving
employmen t. This can
into site visitors’ in-market segments, below, we see that many are seeking
mean that they may be interested in jobs at Google or, given their age demographics outlined ear-
lier, be recent graduates on the job market. We learn that they are interested in marketing services,
so many may also be marketers! Finally, many are seeking productivity software, web design assis-
tance, and new phones. These in-market consumers may overlap, as their numbers imply, or they
may be distinct categories.
Data on in-market segments tells us what our site visitors are shopping for right now. It may
be something we sell, as in the case of this merchant, which does sell productivity software in the
form of various Google tools. We can also learn what other products our consumers are currently
shopping for, thus competing for our customers’ dollars. For instance, we see that Google Merchan-
dise Store's customers may be opting to buy phones; which might be from Google, or at least be
Android models; however, they may opt for Google's competitor, Apple. From this data, the online
store's marketing team could conclude that their site visitors are looking to purchase phones and
could thus offer visitors deals on phone cases or accessories. They can also produce blog posts,
social media content, and other messaging promoting Google's Android operating system to pre-
vent visitors who are in-market for phones from purchasing rival iOS products.
Knowing consumers’ in-market segments, like knowing their affinity categories, helps us build
a more robust buyer persona. It can also help brands take more immediate action. For instance,
it can allow them to profile what products a consumer may be coming to the site looking to buy,
allowing the brand to showcase relevant items on key pages. It can also allow brands to understand
when consumers may be considering a competitor, allowing them to then hone their messaging,
strengthen brand relationships, and build content showcasing the brand's unique value to con-
sumers.
Taken together, data on consumer demographics, affinity categories, and in-market segments
presents a much richer picture of consumers. For example, for this site, we have learned that their
typical user is 24-34, identifies as a woman, and is seeking new job opportunities. She is a savvy
comparison-shopper who likes value products and an avid consumer of movies and music. While
building a complete buyer persona based only on anonymized Google data is not recommended,
such data can strongly inform persona creation, backing up qualitative research, such as customer
interview data, with additional critical data points from current web traffic. Thus, these reports are
a critical part of analyzing a brand's customer segments.
9.7 A Closer Look: Bounce Rate and

Event Tracking
The Electric Sheep is a sci fi bookstore located in the downtown of a college community. In business
for ten years, they offer readings, cosplay events, and game nights in addition to books. On their
site, their homepage includes details on their upcoming events, their location, hours, and phone
number. They do not offer e-commerce sales. Their bounce rate is 80%, and founder Philippa Ford is
wondering whether to be concerned. “It’s not a problem, I've heard, for a retail store to have a high
bounce rate,” says her friend Rachel. “After all, your customers probably just want to look up your
hours before heading over.”
“Yeah, but they can get that information from many locations: our Facebook page or Google
business listing. I'm wondering whether we need to do more to keep people on our website,” says
Philippa. She decides to ask her marketing major friend, Harry, what to do about her high bounce
rate.
Chapter 9 Going Beyond the Basics 255
“Whether your bounce rate is a problem really depends on the goals you have for your site. Do
conversion
you just want people to come into the store to buy books or attend events? Then Rachel is right;
opportunities
you don't have to worry about it, unless most of your events are not on the homepage, in which
Places where consumers
case, people are missing out on most of your events. But if you want people to buy online, or see can take action on a site.
more details about your store that are important to making a buying decision, then yes, that
bounce rate needs work! So, let's take a look at your site. What were looking for are conversion
opportunities—places where consumers can take action on your site. If most of those conversion
opportunities have to be completed offline, such as coming in to the store, and most of them are
featured on your homepage, then youre fine with an 80% bounce rate.”
Taking a look at the site, the friends find that most of the conversion opportunities are on the
homepage. In addition, the next three events are prominently featured on the homepage. However,
the full calendar is not. Customers need to visit the Events page to see all upcoming events, many
of which are planned out months ahead. This means that some of those bounced visits are miss-
ing one conversion opportunity. “This looks fine,” says Harry, before noticing something interesting.
Videos of past events, interviews with authors, and other videos that might increase conversions
were prominently featured on the homepage. “Are you tracking how many plays these homepage
videos get?” he asks Philippa.
“No! You can do that?”
“Sure,” he says. “You really should, too. For pages with videos, the bounce rate alone doesnt tell
the full story. If people are coming to your page and watching your videos, then their visit to your
site indicates high interest, even if they only visit a single page. A video view means they are really
interested in your content.”
“So, we need to dig deeper to really understand what engagement means on our website, let
alone know what our bounce rate means?”
“That's right. Engagement means different things for different sites; a lot of it depends on what
youre offering consumers to engage with—a site rich in video offers consumers very different
engagement opportunities than a text-heavy blog, for example.”
Together, they decide that the bounce rate is of moderate importance for Electric Sheep's site.
Given the rich content, the site does offer consumers a range of ways to engage with the brand, but
much of the content, such as video, can be consumed, and thus engaged with, on a single page. In
addition, because the business is brick-and-mortar retail, sales are often independent of the length
of a website visit. Though Philippa will continue to look at the bounce rate, she decides to focus on
advanced metrics that tell her more about her customers interest levels, such as video views, video
completion rates, and, most importantly, book sales.
9.8 Conclusion
Basic web analytics data can tell marketers much about consumer trends, interests, and engage-
ment. Advanced web analytics data can provide deeper insights both about the user's experience
on a site and about consumers themselves. Technology metrics can provide insights into how well
a site functions on the technical level, from how quickly web pages load in a consumer's browser to
what devices they are using to access a site, at what times. In addition, tools such as User Explorer
allow marketers to map individual, anonymous users’ journeys online, including both the site and
other online properties where they engage with the brand.
To create a fuller understanding of how users travel across a site from the landing page to final
purchase, marketers use funnel visualizations within web analytics tools to determine what the
usual steps are in a user's conversion. Multichannel and multitouch attribution allow marketers to
track closely the marketing channels that played a role in conversions. In addition to conversions,
many web analytics programs track engagement. Events measurement, facilitated by tags, allows
marketers to track behaviors such a views of on-site video, interactions with site forms and other
site activities, as well as what specific content they find most engaging.
E-commerce data tracks the performance of e-commerce sites at the product, product category,
and site levels. It allows brands to track what products are contributing to revenue, assess interest
in specific product categories, even measure the revenue impact of discounts. On the product level,
analytics can allow brands to quickly home in on those that are most popular, while also assessing
how consumers respond to promotions related to specific products. Offline promotions can also be
readily tracked using e-commerce data.
Taken together, all of this data helps marketing teams learn how to optimize the site to
encourage more desired user actions. It can also provide valuable insight into consumers’ favorite
products, the brand attributes they find most important, and even their pricing preferences. These
advanced methods in web analytics are a key part of understanding the customer journey, promot-
ing sales, and creating an effective consumer experience.
257
. When would you use goal flow data to measure your marketing efforts? When would you use
conversion path data? How can marketers use both to optimize their marketing analytics?
. Phondamentals is a food truck company offering pho throughout the downtown business
districts of the Midwest. They have a website and app where customers can pre-order for
pickup, as well as an active Instagram and TikTok presence, promoting each week’s loca-
tion, specials, and behind-the-scenes fun photos. They recently saw an uptick in pickup
orders for to their downtown Chicago locations. They also recently did an Instagram pro-
motion, ran a Google search ad, and sent out a newsletter to their registered customers,
promoting their month’s specials. They expect that all these channels worked together
somehow to drive these results. How would Phondamentals use multichannel conversion
attribution to explore this hypothesis?
. Define the difference between time lag and path length. When would you use one versus the
other?
. How can marketers further understand average order value by looking at additional metrics,
such as average order value by acquisition channel?
. What is the difference between the cart-to-detail rate and buy-to-detail rate?
. lf the cart-to-detail rate or the buy-to-detail rate are low, what actions should a brand take?
. What kinds of information can you learn from User Explorer? Give three examples of the use-
ful data provided by this tool. What can you do with this data?
. Marketers can determine the devices that consumers use to access their websites. Why
might that be important to do? What can marketers do with this information?
. True or false: It’s important to know what types of internet connections consumers use to
access your site.
. What is the difference between an in-market segment and an affinity category? How can
each help marketers better understand their customers?
. What is information architecture? Why is it important for marketers?
. Distinguish between the demographic and psychographic data available in web analytics.
How can marketers apply demographic and psychographic data when understanding their
website visitors? When understanding conversions? Give some examples of how you might
use such reports.
_ True or false: Events, such as video views, are impossible to measure on a website.
. What is the difference between event tracking and advanced tagging? Would the two work
together? Why and how?
. What is retargeting, and how does advanced tagging help you accomplish it?
. How can you use form behavior analysis to optimize lead generation?
. How are tracking pixels useful for understanding more about a visitor to a website?
_ What is an affinity category, and how is a customer in an affinity category different from a
customer in an in-market segment?
_ Which Google tool helps brands understand aggregate data about their market?
. What types of data help to create a buyer persona for a brand?
8. Baker, Kristen. “Multi-Touch Attribution and Models: A Complete Guide.”

HubSpot Blog, April 21, 2021. https://blog.hubspot.com/marketing/multi-
Endnotes touch-attribution.
. “About Data-Driven Attribution.” Google Ads Help. Google, 2021.
https://support.google.com/google-ads/answer/6394265.
. Efti, Steli. “Sales Cycles: An Actionable Guide to Sales Cycle Manage-
ment.” The Close Sales Blog, February 11, 2021. https://blog.close.com/
sales-cycle,
. Hladni, Marija “Google Analytics Reporting: A Complete Guide to Reports, dis Prater, Meg. “The Sales Cycle: The Backbone of a Successful Sales
Metrics, Dimensions, and More.” Databox, July 30, 2021. https://data- Effort.” HubSpot Blog, October 8, 2020. https://blog.hubspot.com/sales/
box.com/google-analytics-reporting. sales-cycle.
. Ibid. 12. “44 Fascinating Ecommerce Statistics - 2021 Update.” 99Firms, May 7,
. Buenconsgjo, Clara. “5 Ways Google Analytics Helps Web Developers 2021. https://99firms.com/blog/ecommerce-statistics/#gref.
In UVUX Design.” Smashing Magazine, September 30, 2020. . Paul, Harshit. “Is Cross Browser Testing Still Relevant?” LambdaTest,
https://www.smashingmagazine.com/2020/09/google-analytics-web- November 25, 2019. https://www.lambdatest.com/blog/is-cross-
developers-ui-ux-design/. browser-testing-still-relevant/.”
. Munroe, Jorie. “Lessons: HubSpot Academy.” HubSpot Academy, 2021. . “How Website Performance Affects Conversion Rates.” Cloudflare, 2021.
https://academy.hubspot.com/lessons/understanding-conversions. https://www.cloudflare.com/learning/performance/more/website-perfor-
. Baker, Kristen. “Multi-Touch Attribution and Models: A Complete Guide.” mance-conversion-rates.
HubSpot Blog, April 21, 2021. https://blog.hubspot.com/marketing/multi- 15. Gilbert, Daniel. “In-Market Audiences for Search: How & When to Use It.”
touch-attribution. Search Engine Journal, November 6, 2018. https://www.searchengine-
. “About Multi-Channel Funnels.” Google. July 30, 2021: https://sup- journal.com/in-market-audiences-for-search/273531/.
port.google.com/analytics/answer/1 191180?hl=en#zippy=,in-this-article
. Patel, Neil. “How to Pick the Right Analytics Attribution Model When
There's No Right Answer." Neil Patel Blog, January 23, 2020. https://neil-
patel.com/blog/best-analytics-attribution-model/.
CHAPTER 10
Offline Research Matters, Even
IN an Online World
Learning Objectives

1. Describe the different tyoes of market research and distinguish between market measure-
ment and company research.
2. Identify the different types of surveys used in market research, such as product surveys, con-
sumer surveys, and usage and attitudes studies.
3. Define strategies for respondent selection to avoid selection bias and ensure a representative
sample for more accurate data collection.
4. Understand Net Promoter® and customer satisfaction scores, from how to measure them to
their interpretation as a strategic input to product, pricing, promotion, and placement strate-
gies.
5. Create effective questionnaires by applying appropriate question types to gather needed
data.
6. Understand the relevance and accuracy of market research data using standard tools such
as confidence intervals and margin of error.
Though some methods of gathering data to support marketing have been around for a century,
they are still a critical part of the marketer's toolbox. Market research is still a vital way for com-
panies to learn more about their consumers, markets, and products. Market research is the process
of speaking directly with consumers to ask their views. Ubiquitous today, it can take the form of
popup surveys on company websites, automated feedback at the end of a customer service call,
communities on company websites, and traditional market research surveys. It can also take the
form of in-depth practices, such as focus groups and field research.
Other methods, though more recent, have also become a key part of collecting data to inform
decisions across the 4Ps. Customer discovery, pioneered in the technology startup community,
involves asking consumers what they want from a product or service before a firm starts develop-
ing their new offerings. It's a radical way of using qualitative data straight from consumers that can
only be considered “traditional” in the sense that it is collected face-to-face (or via videocall) rather
than through a digital data tool.
This chapter is not meant to be a complete introduction to market research, customer discov-
ery, and other traditional data techniques. Many exemplary textbooks exist on the subject. Instead,
it covers those critical aspects of market research that are especially salient to running an overall
marketing data program. As such, it provides a foundational overview of how market research is
collected, its reliability, and, importantly, how to use market research as part of your overall mar-
keting data plan.
In this chapter, we will discover the basics of market research as a part of the larger landscape
of marketing analytics. We'll learn about methods of quantitative and qualitative market research
as well as learning how to integrate such research into our other marketing data to develop a fuller
view of our customers. Finally, we'll learn how to do some basic statistics that are useful to all mar-
keters, both in the context of market research and in conjunction with other marketing channels.
10.1 Surveying Consumers to Learn

Their Preferences
A Century-Old Data-Gathering Method,

Relevant Today
Market research as a discipline related to promotions started in the 1920s, when marketer Daniel
Starch began surveying consumers to determine their views on different advertisements in popu-
lar print publications.” Soon, research firms such as Gallup began polling consumers for their views
on everything from specific product prices to how often they went to the movies. Before the advent
of the internet, market research was companies’ primary way of gathering data on the effective-
ness of marketing, the potential market for different products, and the attitudes of consumers. It
allows brands to ask consumers direct, specific questions to which they need answers, such as “How
do you think our product compares with pricier brands?” or “Would you purchase our sweaters in
green if we made them?” This is a level of specific, robust, complex, and accurate data collection
unique to market research. Thus, it remains a critical part of a marketer's data collection arsenal.
Creating a Full Picture

Imagine youre running a website that provides virtual tutoring services to K-12 students around
the globe. Your portal, Tutor Pursuit, gets 20,000 visitors a month. Organic search is your biggest dri-
ver of conversions. As we learned in Chapter 4, we can understand the keywords, or search terms,
that consumers use to find us. You have researched your top keywords, and they are all things you
would expect, such as “math tutor,” “5th grade science tutor,” “tutor near me,” and more. While this
information helps you understand some of your consumers’ intentions, you still have questions:
Are the people searching for tutors, the parents, or students, or others? Are they searching because
they are struggling with a subject, or are they doing well in a subject and simply want to excel
further? While you can use web analytics, social media data, and other sources to approximate
answers to these questions, you don't really know for sure your consumers’ entire motivations. The
best way to fill in these gaps in your knowledge is to ask your consumers, “Why are you seeking
tutoring?” or “How well are you doing in the subject?”
To gain answers to questions not answered—or, indeed, raised by—other data sources, mar-
keters must conduct consumer market research. That is, they must go directly to the consumer.
Although costly, market research remains the one way to learn directly from our consumers what
they want and dont want. If market research is so valuable, why do brands bother with other meth-
ods? Why do we focus on web analytics data or measure our social media engagement? The reasons
are many-fold. For one thing, it's not possible to survey consumers about many of the actions, atti-
tudes, and preferences measured by other analytics channels. For instance, we could not survey our
consumers every time they come to our websites, asking them to recount every page they clicked
on, or how long they spent on each page. Yet, we need that data, readily collecting it from our web
analytics platforms. The same goes for understanding how our consumers interact on our social
media channels. The other reason is more subtle: Consumers often don't know why they took the
actions they did, or they don't wish to share. In the case of Tutor Pursuit, for instance, a student
may not wish to disclose that they're seeking tutoring because they're struggling or a parent may
not take time to answer a survey. Just as we cannot answer many of our marketing questions fully
Chapter 10 Offline Research Matters, Even in an Online World
261
without market research, we also cannot rely only on market research to understand
all of our mar-
keting channels, activities, and outcomes. Thoughtfully designing marketing analytics programs
that use market research as a critical data source is the best way to build an effective analytics
pro-
gram. In this chapter, we will learn more about how to do this.
10.2 A Closer Look: Finding Our

Market
Chloe Blue and her grandmother, Nancy, have been running a maker business for the past three
years, ever since Chloe was in high school. SewingPie, operating out of the family home, sells
embroidery kits, sewing patterns, fabrics, and designer thread. Their primary customer is someone
who already sews, who learns of the company via word of mouth as well as at hobbyist meetups,
such as quilting guilds.
On her college campus, Chloe notices more and more students interested in the maker move-
ment. Classmates, her roommate Sloane, even the members of her coding club keep asking Chloe
to teach them to sew. With increased interest in sustainable lifestyles, her friends are especially
interested in learning how to re-make existing items they own with embroidery. In her classmates’
interest, Chloe sees a market opportunity. People who don't sew but are part of other maker activi-
ties, such as college 3D printing clubs, as well as those interested in a more sustainable lifestyle, are
eager to add sewing techniques to their skill repertoires. Chloe shares her findings with Nancy. “We
need to reach this growing audience,” says Chloe. “People ask me every week to teach them.” Nancy
is intrigued. “Do you think we should market our existing products to new makers, or should we
develop sewing kits just for newbies?” she asks. Chloe isn't sure. It might be that new sewists would
jump right in, using the same supplies as frequent sewists. Or, because they approach the hobby
with different goals, they may also need different products.
“We can find out by conducting market research,” says Chloe. “I learned about it this semester
in my marketing analytics class. We need to go beyond what my friends are saying and get a sense
for what all beginners who are thinking about learning need. That way, we can market to this seg-
ment, knowing how to meet their needs.”
The type of survey Chloe proposes is market measurement. She is trying to
determine what the potential interest is in a specific offering—in other words,
whether there is a market for it, the possible segments within that market, and
what features would satisfy that market. When companies do market measure-
ment, they are looking to assess the potential opportunities in a new or existing
market.
Market measurement can tell brands when it's appropriate to launch a new
product, what the potential market for the product is, and who is the right target
audience for the offering. It can be done before launching a new product, or at ce
ee allt 2
times during the product lifecycle when identifying new markets is critical. It Source: Shutterstock.com
aL en , ,
can also be used to measure an existing product's market share, as well as
whether the market for a product type is growing or stable.
10.3 Types of Research
Market research exists for a range of purposes. Different research theorists divide market research
customer discovery
into different disciplines, though common definitions exist. Paul Hague divides market research
A process developed by
entrepreneur Steve Blank into market measurement, customer satisfaction surveys, new product development research, and
that includes a step in usage and attitudes surveys.” Qualtrics, the leading survey software company, identifies twenty
which company types of research, many of which overlap with Hague’, but also include subcategories, such as new
representatives ask a
product acceptance, within the product research category." For this discussion, we will focus on
series of open-ended
questions of consumers. two broad categories: market measurement and what Burns et al. call research for “generating,
refining, and evaluating potential marketing actions," which can include customer satisfaction,
focus groups product-focused studies, customer segmentation, and other operational data, and which follows a
A structured discussion in modified version of Hague's model. In this, we are also following the framework of innovation the-
real time, in person or over orist Steve Blank, who emphasizes the importance of early stage qualitative research,
video, with consumers to
gather qualitative data.
distinguishing it from other research in mature companies." This type of offline data collection
does not fall within the discipline of market research; instead, it's called customer discovery.
customer experience Finally, interviews with customers, whether singly or in focus groups, are part of several offline
research data-gathering disciplines, including customer discovery, market research, user experience
Research into the research, and customer experience research. Our main focus will be on data-gathering that is used
experience customers to optimize a company’s existing marketing programs, as this is often the type of information used
typically have with a brand,
in conjunction with the other forms of marketing analytics. Again, this chapter is not meant to
conducted to improve this
experience. replace comprehensive texts on market research, which is its own discipline. Rather, we will focus
mainly on data sources within market research that complement and support overall marketing
measurement programs. As such, we will provide the most coverage on the types of research that
can provide insights on an existing company’s 4Ps.
oO
Two Ways of Conducting Research
© Quanteative =at aboct the numbart
© Quattatee -m cepth conversation:
Market Measurement
market measurement
One key form of market research is market measurement. This is the measurement of different
aspects of an addressable market, such as consumers over age 25 in the United States or people who
This is the measurement of
different aspects of an purchase vegetarian meals. It can be vital in measuring potential interest in a new product, under-
addressable market. standing the growth potential of an existing market, or identifying the needs of a particular group
of consumers.
263
Surveys
Brands can conduct surveys to understand the potential market for a new product.
Questions
focus on consumer segmentation, such as what the ages, locations, genders, or
income levels are of
the potential customers most interested ina product. It can also ask customers about their
possible
interest in product features, such as whether they would like large or small sizes of a product.
As
such, surveys for new products are very similar to those conducted for existing ones, except that
they focus on the potential market rather than satisfaction with and demand for an existing offer-
ing.
To obtain a sample for a new product survey, existing firms can survey their current customers,
asking about their interest. If they want to address new markets, they can use targeting methods
such as social media advertising aimed at specific segments, obtaining lists from list brokers, or
partnering with another organization.
Customer Delivery
One unique, critical form of market measurement is customer discovery. A term coined by Steve
Blank, customer discovery is a qualitative method designed to obtain insights into what problems
customers have for which a product or service may be the ideal solution. In customer discovery,
researchers sit down for extensive, semi-structured interviews with potential customers to learn
more about their challenges, understand how they are addressing those challenges currently, and
determine how valuable a proposed new offering would be to them. While it's applied in Blank’s
framework to new product development and indeed, the launching of new companies, customer
discovery utilizes traditional in-depth qualitative market research methods, including the cus-
tomer interview and field study, although it does not include another qualitative method, focus
groups. Well learn more about these methods in the section in this chapter on qualitative methods.
Customer discovery offers some advantages over surveys, as does qualitative research in gen-
eral. It allows consumers to share their needs without being prompted, and thus led, by researchers’
assumptions.” They can allow marketers to obtain new ideas for products from their consumers
and get honest feedback on existing product ideas. The ideal time to conduct customer discovery is
before a prototype is designed; however, it can be beneficial at all stages of the product life cycle. It
can provide brands with continuous feedback on their customers’ needs, attitudes, and emerging
requirements. Source: Shutterstock.com
Secondary Research
Another way for brands to gauge the market for a product is through secondary research.” In secondary research
Chapter 5, we looked at many sources of industry and benchmarking data and talked about how Research utilizing sources
such data can help brands better understand their markets. Secondary data sources are those in which a third party has
sources in which a third party has already collected the data; marketers simply avail themselves of already collected the data
and marketers simply avail
the data reports. They include reports on industries from market research firms; media studies, themselves of the data
such as those from industry trade publications; databases from data brokerages; governmental reports.
agencies such as the U.S. Department of Commerce and other global organizations. Researchers
turn to these comprehensive sources to understand the potential interest in a product, as well as
its possible profitability and competition.”
When the focus is on market measurement, brands leverage specific sources of external data,
such as government reports, to understand the following:
- How many customers may exist for a specific product
» To whom the key vendors are who are already providing similar products
¢ What prices are typically offered for comparable products

« What customer segments are in the market"
One specific way in which secondary research can help brands is by identifying those customer
segments where there is a large market opportunity.” By finding a market that competitors are
not targeting, brands can launch new products where there is higher demand." Thus, secondary
research can be a critical part of many brands’ growth strategy.
Surveys, customer discovery, and secondary research are all valuable ways for new brands to
learn about the potential market for a product.
Market Research for Marketing

Another critical discipline is market research for marketing, which gathers data
on the market position of a specific company. This chapter will focus mostly on
this type of research, as it is most often used in conjunction with marketing mea-
surement. It includes surveys of consumer attitudes toward a brand or some of
its products, as well as surveys about its competitors, values, and pricing. This
Source: Shutterstock.com research, in contrast with market measurement, focuses on an existing com-
market research for pany’s reputation and opportunities, rather than the overall characteristics of an entire market.
marketing
GardeniYa is the country’s largest supplier of software to garden-supply stores. They make a
This type of research product, SellMore, that helps center owners track their inventory, identify what new products are
gathers data on the
market position of a popular, and manage customer orders both online and via point-of-sale systems. They used to face
specific company. little competition. In recent years, a new, lower-cost alternative, CenterSales, has been advertising
aggressively to garden centers. GardeniYa wants to know how consumers perceive SellMore, what
features they like, and how attractive they find it in comparison to CenterSales overall. This type of
research is meant to drive marketing results for an organization. In contrast with market measure-
ment, it does not aim to gain a comprehensive view of the entire garden-center management
industry. Instead, it focuses on a specific company—its strengths, weaknesses, opportunities, and
threats.
Several types of surveys can help marketers better understand their company’s outlook, its per-
ception in the market, and its opportunities.
o
MARKET, Yas
RESEARCH “iene,

265
Product Surveys
Product surveys ask consumers what they think of a specific product. They can also gather
data on
a product's competition, with a focus on how the product fares when compared to others.
Types of questions in a product survey include customer satisfaction, measuring consumers’
sentiment toward a product, and feature set queries, asking customers what features they value or
would like to see.
When brands conduct product surveys, they often aim to gather data on how consumers
are using their product, what features they use the most in the product, and what new features
could be added to increase the attractiveness of the product in the marketplace. For instance, they
might ask, “How often do you use our product?” or “Where in your home do you have the product
installed?” These questions help ascertain how important it is to consumers and the specific con-
text in which they use it. When launching a new product, surveys can help guide brands to create
only those features that are most popular with a target audience, thus making them most likely to
drive more sales. A product survey is useful at any time during the product lifecycle: when launch-
ing a new product, understanding current market conditions for a current product, or exploring
new markets for a mature or declining product.
Let's go back to Chloe and Nancy. After conducting market measurement, they find that there
is strong demand for sewing project kits among beginner sewists. They launch ten new kits, includ-
ing a backpack, shirt, and pillowcase pattern. After a year, they find that backpack kits are selling
so well that they can barely keep them in stock. Chloe decides to launch a product survey, ask-
ing consumers more about how they are consuming the backpack kits: Are they making them for
themselves, would they like new colors or designs, and would a larger size backpack be even more
popular? She creates a survey, asking consumers such questions as:
“If we made the backpack pattern in a larger size, would you be interested in it?”
“What colors would you like to see the backpack offered in?”
“How many backpacks have you made in the past year? Were they for yourself or other peo-
ple?”
Through the survey, she finds that most consumers would like to make larger backpacks for
themselves, in bright colors. With this data, she and Nancy create a bigger kit, in neon colors that
are highly visible at night. They sell out within two weeks of launching the new product, since they
measured their consumers’ wants, creating a product with verified high demand.
Product surveys are best conducted periodically. Markets shift, and consumer needs change.
Making sure that products are in line with current customer expectations requires continuous sur-
vey data, at least once every year or two years.
Correlating results from product surveys with other marketing data can make product sur-
veys even more powerful. For instance, e-commerce data for Zest Soda, a beverage brand featuring
lower-sugar, creative flavors, shows that their orange soda sells the fastest in July, with an average
of 3,400 cases per week ordered online. The product manager, Jill Mandel, theorizes that citrus fla-
vors overall are popular with Zest's consumers during the summer months. Based on e-commerce
statistics from the past four summer seasons, she notices that orange always sells out during the
summer months, while their apple-lime flavor does best in winter. This challenges her theory some-
what that citrus flavors across the board are popular in summer, so she decides to conduct a survey.
She asks current e-commerce consumers, in-store buyers, and restaurant purchasers their favorite
flavors, as well as what types of flavors they typically like for different seasons. The results are
prefer-
mixed, just like the e-commerce data: while some citrus flavors do well in summer, summer
ences center more around the lightness of a flavor rather than its style. Knowing this, she decides to
gather more data to determine the ideal new flavors to launch next summer. Later on in the chapter,
product
we will learn about specific question types that will help her team find out exactly what
will do well.
Aligning product surveys with other data types should happen at both the survey planning
stage and when analyzing survey data.
Customer Surveys
Customer surveys aim to understand a firm's customers better. They can include elements of prod-
uct surveys, such as questions designed to elicit when consumers use a particular product.
However, the focus of a customer survey is an understanding of customer characteristics, from
their demographics to their relationship to the brand. While there may be some overlapping ques-
tions or data between product and customer surveys, the focus is very distinctly on customer
characteristics.
Segmentation Studies
Brands can always ask customers how satisfied they are with a product within the context of a
segmentation
product survey. What a product survey cannot accomplish is a better understanding of what differ-
Survey used to identify
ent types of customers a brand may have, and how those different types of customers interact with
what types of segments
may exist within a target the brand differently. This is where a customer survey can be very effective. Surveys that obtain
population. segmentation data can be standalone, or they can be part of a larger survey.
What segmentation surveys do is look to identify what types of segments may exist within a
target population. They can be unknown segments, identified by survey data, or they can be exist-
ing segments, which can be refined or better identified through questionnaires. For instance, let's
say our friends at GardeniYa are fairly certain that they have three main segments: those who own
small roadside garden centers, those who run regional chains with multiple locations, and the man-
agers of large local centers. Through a survey, they can assess the following:
1. Segment size: How many consumers are in each segment
2. Preferred Features: What features the members of each segment require
3. Key Channels: How each segment makes purchasing decisions, including the marketing chan-
nels t which they pay attention
4. Pricing Needs: What prices each segment is willing to pay for the product
In addition, a segmentation survey can discover new segments by asking open-ended ques-
tions about customer preferences. Segmentation studies can be critical during a product launch,
for uncovering new opportunities to promote a product to additional markets or re-segmenting a
market as consumer psychographics and demographics shift over time.
Net Promoter Score and Related Metrics
Net Promoter Customer surveys often include Net Promoter Score’ (NPS) data. This data measures consumers’
Score® (NPS) loyalty to a brand by asking them how likely they are to recommend a product or a service to a
friend. Presented as a 10-point rating scale, the NPS asks a question, typically phrased as: “Based on
This data measures
consumers’ loyalty to a your current experience [or most recent experience], on a scale of 1-10, with 1 being highly unlikely
brand by asking them how and 10 being highly likely, how likely are you to recommend this brand to a friend?” Variants on the
likely they are to
classic NPS question may qualify the question, such as asking, “How likely are you to recommend
recommend a product or a
service to a friend. the brand to a friend with similar interests?” in order to prompt respondents to compare their own
experience accurately to those who are also in the brand's target audience rather than less-relevant
target audiences. For example, SewingPie might ask, “Based on the last kit you ordered from us,
how likely are you to recommend SewingPie to a friend?” However, if the respondent does not have
any friends who sew, they may rate SewingPie a 2, because they simply don't recommend sewing
kits to their uninterested friends. By asking consumers to consider their likelihood of recommend-
ing a brand to those with similar interests, niche brands are more likely to get accurate NPSs that
eliminate the issue with their product having a narrow focus.
High Net Promoter Scores are associated with greater customer loyalty—if customers recom-
mend a brand, that tends to mean they are loyal to it, trust it, and would stake some of their own
reputations on sharing information about the brand.
To calculate the NPS, marketers separate out all responses that rate their likelihood of rec-
ommending a brand at 9 or 10. These “promoters” are those consumers who have high positive
sentiment toward the brand. Those who select a 7 or 8 are not counted—their neutral sentiment
makes them “passives,” or those who do not feel particularly strongly. Finally, all responses at 6 and
under are tabulated, for the total percentage of “detractors,” or those who feel strong negative sen-
timent toward a brand. The number of detractors is subtracted from the number of promoters to
obtain the Net Promoter Score.
For example, let's say that our friends at Zest Soda survey their customers, asking them to rate,
on a scale of 1-10, how likely they are to recommend Zest to a soda-drinking friend. This question
eliminates those people who don't drink soda from consideration in the score, thus yielding a more
accurate NPS. The responses come back with 70% of consumers saying they were very likely to rec-
ommend Zest, selecting a 9 or 10. Ten percent of consumers are neutral, or passives, at 7 or 8. Finally,
20% of consumers are detractors, at 6 or lower. The percentage points are subtracted from each
other, for an NPS of 50:
70 — 20 = 50
Benchmarking research suggests that an NPS of 40 or more is a strong indicator of a respected,

growing brand. The company Customer.guru found that Starbucks has an NPS of 77, while Guccis
NPS is 45. Not all major brands have a large NPS; Netflix earns a 13, while many brands have nega-
tive NPS due to large numbers of detractors."
Another metric measuring customer's feelings about a brand is the customer satisfaction score
(CSAT). Unlike the NPS, the CSAT directly asks customers their level of satisfaction with a brand
on a scale. When deciding to use NPS versus CSAT, brands need to consider why they wish to
understand consumer sentiment. If they wish to determine solely the current state of their brand's
popularity with its current consumers, CSAT provides intuitive, easy-to-collect data. By contrast,
NPS is more useful in projecting a brand's likelihood of gaining market share against its competi-
tors, based on its current positive sentiment among consumers.
NET PROMOTER SCORE
DETRACTORS PASSIVES PROMOTERS
NPS = %PROMOTERS - %DETRACTORS
Usage and Attitudes Score

A usage and attitudes (U&A) study focuses on two critical aspects of a company’s relationship with
usage and attitudes
its customers: how they use the product, and their attitudes toward the product. As such, it over-
(U&A)
laps with a product survey. However, while a product survey's primary focus is often on new,
Study designed to gather
data on how consumer planned, or potential features, a U&A study focuses on the larger picture: how consumers use the
use a product, and their product overall, including how they purchase it, when they use it, and how they feel about using it.
attitudes toward the While a product survey may ask some of these questions, in a U&A survey, they are the focus.
product.
On the attitudes side of the U&A model, surveys ask respondents to rate their attitudes toward
the product brand, its promotions, and its competitors. It may ask consumers questions such as,
“What are some of the attributes you associate with this brand?” It often includes recall questions,
asking consumers how familiar they are with a specific ad or other elements of the brand.
Because they survey consumers about their broad attitudes towards a product category, U&A
studies overlap with market measurement. However, unlike market measurement, U&A surveys
are still focused on identifying the position of an existing brand within its market rather than
assessing the potential new market for a brand.
Brand Awareness Studies
One other major type of market research study is surveying for brand awareness. In brand aware-
ness studies, researchers ask consumers their views on a specific brand. Some of the data collected
is similar to that of U&A study, although it is focused on understanding how much consumers are
aware of a brand and their attitudes toward it, without the questions on usage found in a U&A
study.
269
Brand awareness surveys often ask consumers to name the top brands that come to mind first
in a specific product category. These brand recall questions are meant to identify how readily con- brand recall (aided or
unaided recall)
sumers associate a particular brand with a product type. Unaided recall questions ask consumers
to name the first few brands they can think of in a category. For instance, SewingPie'’s team might The ability of a consumer
to remember key aspects
ask consumers, “What are some sewing-kit companies that you know of?” An alternative to unaided of a brand. When aided,
brand recall are aided recall questions. Those prompt consumers to answer whether they have some prompt assists with
recall.
heard of the specific brand being studied. An aided brand recall question for SewingPie would be,
“Have you heard of the sewing kit company SewingPie?” One challenge with unaided brand recall
false negative
questions is that many times a consumer is somewhat aware of a brand but cannot quite remem-
Ano reply that is not
ber its name. This is a false negative, when a no reply, in this case a failure to mention the brand, is accurate.
not accurate. One challenge, however, with aided recall is that it can lead to false positives, when
consumers agree that they have heard of something but truly have not. false positives
Unaided brand awareness questions measure top-of-mind awareness. This is the presence of A yes reply that is not
accurate.
a brand at the top of consumers’ minds, as the name implies. Top-of-mind awareness is consumers’
propensity to think of a brand when a product category is named. For instance, what do you think top-of-mind
of when someone says pizza parlor? The brand you mentioned, whether it’s at the student center awareness
or your favorite delivery chain, reflects top-of-mind awareness of that brand as a pizza vendor.” The presence of a brand at
the top of consumers’
In addition to recall questions, brand awareness studies often include brand image questions,
minds, as measured in a
asking consumers their views of a brand's image, such as whether it's a luxury or a bargain brand, survey asking about
cutting-edge or classic. Related to image are brand trust questions, asking consumers how much brands in a specific
industry.
they trust a brand to be suitable to their needs, safe, and effective, as well as their views of a brand's
ethics.”
brand image
Measuring brand awareness is an important way to know how well a brand has gained traction A consumer’s view of a
in a market—how well-known it is, how well-regarded, and how trusted. Such metrics are an impor- brand; their general
tant way of measuring a brand's health—its relative strength in the market. Surveys can be impression of a brand’s
values, qualities, and other
conducted at any time to set a baseline of how aware consumers are of a company; measuring important factors.
brand awareness after a marketing initiative can help measure whether a brand's profile was raised
after the marketing program. Brand awareness surveys are a key tool in marketers measurement brand trust
toolkit for ascertaining the reputation of their brand as a whole among consumers. The extent of trust
consumers have in a given
brand, such as their belief
the brand has ethical
standards and a quality
10.4 Survey Design and Deployment

product. It can vary by
consumer or be a general
impression, common to
most consumers.
Much of market research depends on surveys. Surveys are the deployment of an instrument, or list instrument
of market research questions along with the means of collecting answers to a respondent sample. List of market research
The validity of a survey, as well as its value as data, depends on good design. A survey, to be effective, questions along with the
needs to be designed to get the answers a brand needs, with minimal ambiguity and at reasonable means of collecting
answers to a respondent
cost. Results must be accurate, which depends on creating a clear survey instrument and surveying sample.
respondents who accurately represent the target audience.
Unlike digital data collection tools, which collect standardized data across all users, most mar-
ket research instruments, such as questionnaires, are designed for a specific research project. This
allows for strong customization, permitting researchers to get just the answers they need while also
increasing the risks of errors in collection, such as asking irrelevant questions. Careful planning
be
can ensure that a market research effort delivers reliable, useful, and accurate data that cannot
means. In this section, we wil! learn how marketers design
obtained by any other data collection
and deploy surveys.
Writing Survey Questions

https://www.pewresearch.org/our-methods/u-s-surveys/writing-survey-questions/
Setting Goals
We have talked a lot about the importance of setting goals for any analytics program. When it
comes to setting goals for market research, early, detailed goal-setting is critical. Market research,
unlike many other forms of marketing data collection, requires creating new data rather than
simply observing data that has already been collected or can be passively collected by electronic
means. It is more resource-intensive than other marketing data methods, requiring more careful
planning to best utilize employee time, manage the costs of deploying research, and ensure effec-
tive results." For any survey, thus, managing costs and ensuring accuracy means setting goals. In
addition, since traditionally, market research has been separate from digital marketing analytics or
other marketing measurement, it's important for the modern marketing organization to plan for
proper integration of survey data with the rest of their metrics. Marketers should ask themselves:
1. What data do we need from this survey? Do we need to know what consumers think overall of
our brand, determine the demand for a new product, or understand our competition?
2. When and how often do we need to conduct this survey for the data to be useful? Are we con-
ducting a survey that will be repeated annually, weekly, every time a customer calls our call
center?
3. How do we plan to make the survey data actionable? Will we be making changes to our prod-
uct, verifying the effectiveness of our current marketing efforts, or investing in new efforts?
4. What is our budget for this survey? Will that budget be sufficient for an accurate survey—one
with enough responses from the right audience?
5. What other data covers the topic of our survey? For instance, do we already have some brand
trust data from social media sentiment analysis? Do we already understand something about
demand for our new product from e-commerce metrics?
6. How can we use existing data from other sources to inform our survey? For example, can we
use e-commerce data to develop a list of top-performing brands we sell for our brand aware-
ness study?
7. How will we use survey data in conjunction with our other data sources to develop a clearer
picture of our customers, our brand, and our marketing effectiveness overall?
Planning helps ensure that an expensive survey provides results that enhance existing data,
provide new insights, and help optimize future efforts across all 4Ps.
271
Respondent Selection and Sampling Methods

To deploy a survey, we first have to select the people of whom we will ask our questions. This
panel
process begins by recruiting respondents in our target audience. Often, this involves recruiting a
panel: a group of consumers who have signed up to take surveys, providing extensive information A group of consumers
who have signed up to
about themselves to qualify for surveys targeting specific segments.” From the panel or other pool take surveys, providing
or respondents in the target audience, researchers select a sample, which is a representative group extensive information
within the target population. This process requires careful sampling. As Burns et al. point out, we about themselves to
qualify for surveys
cannot ask everyone in our target audience our survey questions. For instance, if you wanted to targeting specific
understand the music-buying habits of college students, you could not ask every college student in segments.
the world. Instead, as Burns notes, we must rely on sampling—identifying a smaller group of peo-
ple within our target audience to whom we can realistically send our questions or ask them face- sample
to-face. This smaller group is called our sample. A representative group
within the target
Selecting a sample can be done using probability or non-probability methods. With population.
probability methods, researchers select members of the target audience completely at random. For
example, returning to the college student example, if you had a list of every college student in the sampling
United States, you could select some of them at random to take your survey on music-buying The process of selecting a
representative group ina
habits.
target population.
The challenge with probability methods is that we seldom have access to all members of an
audience in order to select some of them at random. Instead, we have access to a limited subgroup non-probability
of audience members. You may only be able to contact, for instance, students at your own school methods
and those attended by your friends. Such a sampling method is a non-probability method, since it In sampling, a method of
selection that does not
does not use random selection only. Instead, it also, or entirely, relies on contacting people who are depend on probability.
available. We might use a convenience sample, or a sample made up of people whom we can reach
conveniently, such as students in our own dorm. Or, we may hand select respondents who have probability methods
some characteristic, such as knowledge of a subject—students in a band, for example, in what is In sampling, methods in
known as systematic sampling. If we suspect that our target audience may have different sub- which researchers select
groups—students who are really active music fans versus more casual listeners, for example—we members of the target
audience completely at
may try to recruit proportionate numbers of respondents in each subgroup, in what is called random.
stratified sampling."”
convenience sample
With each of these non-probability methods, we risk identifying a sample that does not truly
represent the opinions of the general population of our target audience. Imagine you only asked A sample selected simply
because it was convenient
your own classmates about their music-buying habits. Whether you go to a small liberal arts college to use, such as
or a large state school, your fellow students may have a lot in common with each other, yet be dif- interviewing a researcher's
ferent from other students at other types of schools. That means their attitudes about music- roommates.
buying may differ, perhaps significantly, from those of students across the country. A company
systematic sampling
relying on their attitudes to make decisions on how to market, sell, and develop music may find that
A non-probability sampling
they appeal only to students like your classmates, while not being as successful with other groups method in which
of students. researchers hand select
those respondents who
have some characteristic,
such as knowledge of a
subject.
stratified sampling
In sampling, recruiting
proportionate numbers of
respondents in each
subgroup.
Reducing Sampling and Non-Sampling Error

When a survey sample proves to be different from the target population, the survey suffers from
sampling error
(sampling bias) sampling error, also called sampling bias. When sample selection is the reason for this bias, the
survey has coverage bias—the sample did not adequately cover the target population. Other errors
When a survey sample
proves to be different from can also creep in, notably non-response error. This section is not intended as a complete survey of
the target population. all types of errors, but instead offers a summary of some of the ones that marketing generalists
should be certain to look out for when planning market research.
coverage bias
Several types of sampling error are common:
Sampling error that occurs
the sample did not Non-response error: If only some participants respond to a survey, while many do not, those
adequately cover the who do respond may be different in attitude than the large number who did not participate.
target population.
For instance, in a usage and attitudes study, respondents may be polarized—that is, they may
non-response error be those who especially like or dislike the brand. To reduce non-response error, researchers
need to ensure that as many respondents as possible answer the survey. They can email non-
Error in a survey’s
accuracy introduced if only responders with reminders, include incentives such as small gift certificates, and make
some participants respond questionnaires as simple as possible.
to a survey, while many do
not; those who do Sample frame error: Every sample is a representation of the larger population it is drawn
respond may be different from; sometimes, a non-representative subgroup is selected accidentally. For instance, let's say
in attitude than the large
that Chloe decides to survey people under thirty who enjoy crafts. To contact her sample, she
number who did not
participate. sends social media messages to student crochet groups around the country. This sample would
show sample frame error, as it includes only those who both crochet and are students, not all
sample frame error people under thirty who craft.
An error in a survey’s Selection error: Related to non-response error, selection error is also a function of different
accuracy resulting when
types of respondents’ willingness to take a survey. Selection error occurs when respondents
non-representative
subgroup is selected ask to take a survey, for instance, on “influencer” platforms where consumers can opt in to take
accidentally. surveys for money or free samples. Consumers who are motivated to take surveys may have
stronger or different viewpoints than the majority of consumers, who do not.
selection error
Population specification error: Unlike non-response and selection errors, which stem from
Selection error occurs
when respondents ask to
respondent behavior, population selection error results from marketers’ inability to identify
take a survey, for instance, the right population to target. For example, let's say that the team at GardeniYa reached out to
on “influencer” platforms business professors, instead of garden center staff, on the assumption that these teachers were
where consumers can opt
in to take surveys for
teaching students how to run garden centers. They would be surveying the wrong population,
money or free samples. thus leading to population specification error."
Consumers who are
motivated to take surveys
All types of sampling error can bias results in several ways. The challenge for marketers is that
may have stronger or it's impossible to tell what specific mistakes sampling error has introduced. Thus, although it can-
different viewpoints than not be completely eliminated, sampling error needs to be controlled with known methods for
the majority of consumers,
who do not, resulting in
reducing it.””
issues with a survey’s
accuracy.
population
specification error
Error in survey accuracy
that results in cases where
the incorrect population is
targeted with a survey.
273
FIGURE 10.1 Sampling of a Population
bE
11 12
eos
«
neh,
ttSample (every 3)
Fortunately, there are several ways for market researchers to combat sampling error. Random
4 7 , ; ; random samplin
sampling can combat most forms of error, aside from population specification. In random sam- ae
pling participants are selected at random from the target population. Researchers choose oe
respondents from a list of known members of the population by selecting, for instance, every third selected at random from
individual™ A modified version of random sampling that is appropriate in some situations is strat- the target population.
ified random sampling. When a target population is made up of several subgroups, each subgroup pes
needs its own random sample to ensure accuracy. For instance, let's imagine Zest Soda's target cus-
tomers include both diet soda drinkers and those who never drink diet soda. In order to accurately Term for subgroups in
stratified sampling. Each of
survey all soda drinkers, Zest’s market research team must divide the soda consumer group into thatecinehead pace
two segments, called strata, then randomly select respondents from each one. In this way, even subgroup of the population
complex populations can be surveyed randomly.” subgroup.
Other ways to avoid sampling error can depend on the type of error. They can include the fol-
lowing mitigations:
+ To reduce sample frame error, care must be taken in recruiting participants. Marketers have to
be careful not to recruit people who have something else in common in addition to being part
of the target population. For instance, Zest Soda should not survey only those soda-drinkers
who shop at one specific supermarket, since that would introduce another variable into the
population.
* To reduce selection error, marketers should avoid relying on programs that encourage respon-
dents to opt in to specific surveys. Instead, they should recruit a broad range of respondents
with proactive recruitment methods, such as surveying all customers, or reaching out to a
broad base of consumers via social media ads, email marketing, or on-website interactive tools.
. To avoid population specification error, marketers should brainstorm the right audience for
any survey. What types of consumers are likely to use a given product? How do they relate to
the brand? If possible, brands should survey several different populations to ensure reaching
all targets.”
No method will completely eliminate sampling error. It can only be reduced. When sharing sur-
vey results, it's important for marketers to describe their methodology, or how they cond ucted the
survey. That information should include details on how respondents were recruited. That can help
those interpreting the data to understand possible sampling errors impacting the data.
Sampling Error
https://www.voxco.com/blog/types-of-sampling-error/
10.5 Questionnaire Design

Writing effective questions for a questionnaire is critical to survey success. Well-written questions
can help us gather accurate data, while those that are confusing can provide answers that dont
accurately reflect consumer sentiment. Therefore, questionnaire design is a critical step to creating
an accurate survey.
Effective questionnaire questions have the following key characteristics:
leading They avoid leading respondents. Leading is when a question's wording indicates, explicitly or
Questioning method in implicitly, the asker's desired response to a question. For instance, a leading question might be,
which a question’s “How much do you love Zest Soda?” since it implies that the respondent loves the soda.
wording indicates, Another example might be: “How much do you avoid any soda except Zest?” because, again, it
explicitly or implicitly, the
asker’s desired response implies that the consumer favors Zest soda. These questions suggest the correct answer to the
to a question. For question—the answer that the company asking it wants to hear.
instance, a leading
question might be, “How Questions that don't lead are more neutral. For instance, Zest Soda could re-word their
much do you love Zest question to avoid implying that the consumer must say that they love the product. A neu-
Soda?” tral way to ask consumers how much they like Zest would be “Please rate, on a scale of 1 to
5, 1 being ‘don't like at all,’ and 5 being ‘love, your opinion of Zest Soda.” Note that in this
survey fatigue
example, the consumer is given a range of views they can express. Another way to avoid
The phenomenon in which
leading questions is to ask an open-ended query that avoids emotional language. For
consumers abandon
surveys or start selecting instance, another way Zest could phrase their question is to ask, simply, “What is your opin-
answers with little thought ion of Zest Soda?” Again, this question is not leading. It asks a neutral question without any
because a long
emotional tone that implies a like or dislike of the product.
questionnaire has tired
them. It's important to avoid leading questions because leading questions make it challenging to
collect consumers’ true opinions. If asked to state how much they love Zest Soda, con-
skip logic sumers who merely like the product may feel they need to say something that aligns with
Method of designing a the question's tone, if only because they are given no other option than to state they love
survey that skips over
certain questions based on
the brand. Asking a neutral, non-leading question gives consumers the opportunity to
a respondent’s answers to express their actual views. This provides the more accurate data marketers need to under-
previous questions. stand their consumers’ needs, attitudes, and opinions.
They focus on only those topics of importance to understanding consumers. Long question-
naires risk survey fatigue, the phenomenon in which consumers abandon surveys or start
selecting answers with little thought because a long questionnaire has tired them. That can
lead to poor data quality, as answers do not reflect true consumer views. Instead of risking dis-
engagement, market researchers should ask focused questions closely aligned to the survey
goals, utilize skip logic to customize questions to a respondent's prior responses, and create
survey invitations that share some survey goals with respondents to make responding feel
meaningful.™!
Teams should test a questionnaire several times. At a minimum, the draft questions should be
reviewed by several reviewers, and the live instrument itself should be tested because often ques-
tions that make sense in a document do not translate well to the live questionnaire environment.
275
Ideally, testers in the same target audience as the respond

ents to whom the survey will be deployed
should give feedback on the questionnaires clarity and complex
ity. Once tested, the questionnaire
can be revised and sent out to respondents.
oO
UNDERSTANDING
as
Types of Questionnaire Questions

Marketers have many question formats at their disposal when designing questionnaires. Each type
is suited to gathering different types of data, eliciting different feedback, and preventing respon-
dent fatigue. A short questionnaire may have only a few question types—for instance, a survey on
what menu items a restaurant should serve may only have a handful of multiple-choice options,
as well as a space for respondents to enter demographic information. By contrast, longer surveys
often benefit from including a wide range of question types. These can help prevent respondent
fatigue, as well as obtain complex data.
Qualifying and Demographic

Many questionnaires start with a set of questions designed to gather data on the survey respon-
qualifying questions
dents. When respondents have not been pre-qualified, or pre-qualification data is not reliable, as is
Questions asked prior to a
the case with social media targeting, the first set of questions may be qualifiers, designed to deter- survey’s questions
mine whether a respondent is in the target group. Let's go back to SewingPie. Nancy only wants to designed to determine
target people who are novice sewists for the survey. To deploy their market measurement survey, whether a respondent is
truly qualified to take the
Chloe and Nancy ran a Facebook ad targeting people who are part of maker clubs on college cam- survey.
puses with an ad whose headline is, ‘Always Wanted to Learn Sewing? Take This 3-Minute Survey
and Win a Free Kit.” While the targeting makes sense to the pair, they realized it would attract many
people who are not interested in the product and clicked accidentally or just want to win some-
thing free. To prevent uninterested respondents from taking the survey, they instituted qualifying
questions at the beginning of the survey. These were designed to ascertain whether respondents
are suitable candidates. They ask, for instance, “Do you currently sew? If yes, for how long have you
been sewing?” These questions determine whether a consumer is really a novice embroiderer, their
only target audience for this survey.
Qualifying questions can be simple, such as asking whether a respondent is the target demo-
graphic for a product. They can be complex, as is often the case for B2B surveys, where respondents
need to be qualified for being in a brand's target industry, having responsibility for a specific job
function, and their role in purchasing decisions. For example, GardeniYa asks respondents how
long they have been in the garden center industry, whether they run or manage a garden center,
and whether they have ultimate responsibility for purchasing software for their companies. This
helps them reach just the decision-makers for store software for their surveys, since it's this target
audience whose needs they must meet.”*!
One risk with qualifying questions is that they can limit the range of input that brands get
from consumers. For example, looking at GardeniYa, they may be eliminating consumers who can
give them valuable insight into the product features they need. While store owners may make the
final decision in purchasing garden-center software, it's the cashiers who most often use such soft-
ware. Their opinions may play an important role in making purchasing decisions. Even if not, their
ability to use the software easily can make or break a purchase.
Binary
Some questions have only two possible answers. For instance, a typical consumer may prefer ear-
buds or headphones. The simplest of question types, the binary question asks consumers to pick
one of two choices, such as True/False, or Rent/Own. Binary questions can quickly gather data on
consumer attitudes, actions, or preferences in situations where only two options truly exist. One
limitation to binary questions is that often, brands identify as binary choices that are not. For
instance, SewingPie asked, in their original market measurement survey, whether consumers who
do fiber arts already knit or crochet. This assumed that no consumers do both crafts, while also
ignoring other crafts they may do with yarn, such as embroidery. This can confuse consumers,
reducing data quality by asking them to choose one option when their true response would be both
or some other choice. When deploying binary questions, marketers should be sure that the logical
options are, indeed, binary.
Yes! NO!
277
. To ask consumers whether they prefer earbuds or headphones, researchers do not

need mul-
tiple-choice questions—they can ask a simple binary question because there are only two
likely
options. However, what if a brand wanted to ask about experiences with a range of options?
In such cases, researchers can use other question styles, such as multiple choice or multiple
answer. In the sections below, we will learn more about these questions, including how best to use
them for accurate questionnaire design.
Multiple Choice
A multiple-choice question provides respondents with several pre-written answers to a question.

They must pick one of the choices.
What flavor of Zest Soda do you purchase the most often?
O Apple
O Cranberry Lime
O Blueberry Grape Source: Shutterstock.com
O Orange
O Tangerine Ginger
Multiple-choice questions are best when companies need data on consumer choices that are
exclusive to each other but have more than two factors. The options must be exclusive to each
other. For instance, in the example above, it is a fundamental assumption that consumers will have
one flavor of soda that they purchase the most often. If that is the case, then the multiple-choice
question will gather valuable data on which soda flavor is the most favored by the highest number
of consumers. Multiple-choice questions provide clear data on consumer preferences, making for
simpler to interpret results.”!
On the other hand, often available options are not exclusive to each other, or at least not exclu-
sive to each other all of the time. In such cases, another question option is the multiple-answer
style.
Multiple Answer
Like multiple-choice questions, multiple-answer questions ask respondents to select from a range
of answers in response to a single question. In contrast with multiple-choice questions, however, a
multiple-answer question allows respondents to select more than one answer option such as the
following:
What flavors of Zest Soda do you purchase more than once a month? (Check all that apply.)
0 Apple
0 Cranberry Lime
Oo Blueberry Grape
0 Orange
O Tangerine Ginger
the
As you see in the example above, a respondent can check one answer, two answers, or all of
offered answers.
Multiple-answer questions are effective when companies want to gather data on consumer
one flavor of
preferences that are not exclusive. A consumer may purchase, for instance, more than
a brand's soda, or otherwise prefer several different options for a single product.
Another use of multiple-answer questions is to determine what product features are most
often preferred together with other features. For instance, the Zest Soda market research team may
find that consumers who buy blueberry grape soda more than once a month are also likely to pur-
chase apple flavor, while those who purchase orange soda prefer only that one flavor, and don't buy
any other flavors.
Deciding between multiple-choice and multiple-answer questions depends on what marketers
want to know. Multiple-choice questions force users to select a single, most pertinent answer. That
can be helpful to learning what is most important to consumers. For instance, asking consumers
their one favorite flavor of soda is significantly different from asking them to name all their favorite
sodas. It forces them to select their most important choice—however, nuance is lost if a consumer
has multiple favorites. Generally, it is better to use multiple-choice when truly only one selection
per question is appropriate.
Ratings Scales
Ratings scales, as the name suggest, ask consumers to offer ratings of specific items or to rate their
own actions, attitudes, or beliefs. Ratings scales are useful in determining consumers’ preferences,
the intensity of those preferences, and the extent to which consumer opinion may be polarized, or
clustered around two opposite viewpoints. They are also useful for determining the reputation of
a brand, either across the board or with a particular subset of consumers, as well as determining
potential demand for new goods or services. In this section, we'll explore a few of the most common
rating scale question types.
Likert Scale
A Likert scale is a subtype of rating scale in common use in market research. What makes a Likert
scale unique is that is provides a range of ratings on a continuum. This is important because it gives
researchers clear metrics on the degree to which consumers hold a particular view. For instance,
a Likert scale question may ask respondents, “How satisfied are you with Zest Soda?” giving con-
sumers a range of answers from which to choose ranging from “1 = Not at All Satisfied” to “7 =
Extremely Satisfied.”””
279
One key use of Likert scales is sentiment measurement, that is, measurement to assess how
much consumers approve or disapprove of a brand. They can also measure any other data where
the intensity of an action or belief can range equally from one extreme to another. For instance, a
gym might ask consumers, “How often do you work out?” with a range of “1 = Almost Never" to “5 =
Every Day,” with intervals for “2 = Once a Month or Less Often” or “4 = Once a Week or More.” When
measuring any ranges of beliefs, attitudes, or actions where the differences between one level of
intensity and another are roughly equal, Likert scales are a convenient option. They can be adapted
to a wide range of data needs.
A Likert scale can be bipolar or unipolar. A unipolar Likert asks respondents to rate the extent
of their beliefs on a single metric, such as their level of satisfaction with a product, ranging from
“Very Dissatisfied” to “Extremely Satisfied.” No matter what option they select for such a question,
they are indicating their level of satisfaction with the product—a single metric. A bipolar Likert
question, by contrast, asks consumers the extent to which they favor one of two extremes on a
scale—for instance, whether they are a frequent exerciser or a couch potato. It asks consumers to
choose one of two options as closely as they can, indicating how much their actions or beliefs fall
into one of the two available options. Degrees of intensity are still part of the question, but they are
degrees of intensity between two opposite extremes, such as “Very Often” and “Never.”
Sliding Scales
Not all ratings scales are Likerts. One common variant is the sliding scale. Although it, too, requires
consumers to select degrees of feeling on a particular question, sliding scales do not have numerical
intervals attached to question options. Instead, they ask respondents to select their own position
between two bipolar choices or on a unipolar continuum. For example, let's say were asking, “How
satisfied are you with Zest Soda?” Instead of giving respondents five or seven options with clear
labels, as Likert scale does, a sliding scale simply presents a slider that consumers can drag from the
extreme of “Highly Unsatisfied” to the other extreme end of “Extremely Satisfied.’
OOOO
Sliding scales can capture more nuanced consumer sentiment than a Likert scale. Rather than
rating items as discrete whole numbers, they allow consumers to provide rankings that are frac-
tional, providing more accurate metrics of consumer sentiment or degree of preference. However,
in many cases, the level of nuance captured is slight, as consumers often select positions on the
slider very close to the constrained numeric options offered by the Likert. Often, the main reason to
select a sliding scale is less the increased accuracy of the data collected and more the more engag-
ing user experience of the slider mechanism itself.
Star Ratings
Popular with online ratings sites such as Yelp, star rating scales typically offer four or five stars
as the scale on which consumers can rate a particular product, service, experience, or other com-
mercial offering. Star ratings are convenient, and they are intuitively understood by consumers.
Research has shown, however, that the reviews accompanying star ratings on review sites often
offer different sentiment than the stars themselves. The reviews are often more nuanced, with
much less positive sentiment than the star rating implies. For instance, a four-star review of Zest
Soda may contain terms such as “I like most of the flavors but some are too sweet,” or “Some flavors
are just OK.” On the other hand, lower star ratings can also accompany text reviews that have high
positive sentiment, with the lower stars accounted for by factors peripheral to the product itself.
For instance, the author once received this review as a professor: “Although the professor was great
and made the subject interesting and fun, I'm giving this class 4 stars instead of 5 because the class-
room was cold.”
281
Since star ratings correlate only somewhat with more detailed measures of sentiment,
researchers use them less often than Likert and sliding scales.
Ordering Questions
Ordering questions ask respondents to pick the importance of different factors from a limited list.
For instance, an ordering question for Zest Soda may ask consumers to rank all potential new
flavors of soda in order from most appealing to least. Ordering questions are useful in product
surveys for determining the relative importance of different products within a line or different fea-
tures in a product. One limitation of ordering questions is that they do not account for the fact that
some products or product features only work well together. For instance, imagine a restaurant ask-
ing consumers to rank, in order of importance, glasses, ice, and the soda itself to beverage-drinking.
It would be impossible, since there is no reason to have a glass with ice in it without a beverage.
Conversely, a cold beverage is more attractive with ice. Thus, the features cannot be ranked, but
instead, each has an interdependent relative importance to the product.
For more complex analysis of how product features interact to make the entire product more
appealing, see the discussion on conjoint analysis in Chapter 5.
Ordering questions can seldom fully capture the relative value of different aspects of a product
to consumers. There are many nuances to consumer preference, which ordering questions or other
quantitative methods can oversimplify. To gather accurate data on consumer beliefs, needs, and
interests, qualitative methods, such as open-ended questions, focus groups, customer interviews,
and field studies, are essential. These help marketers develop a fuller picture. We will now explore
some of these qualitative methods.
Open Ended
Sometimes, the best data comes from asking consumers to share anything on their minds related
to a given topic rather than specifying any particular answers. For example, marketers often want
to gather data about new product features that consumers want or experiences they have had ina
store. These topics can't be covered with any of the above question types, which ask consumers to
select from limited options. In such cases, questionnaires can include open-ended questions.
Let's go back to Zest Soda. They want to try out some new flavors, and they are not sure what
flavors their consumers would like. Jared Nkenge, Zest’s CEO, thinks that root beer might be pop-
ular, while product manager Jill Mandel thinks that cherry lemon would be worth trying. “We do
best rolling out one flavor at a time,” says Jared. “So we need to select the one that will be most pop-
ular with our customers.”
“What if neither flavor is what they really want?” ask Andy Cho, chief marketing officer. “How
about we ask customers to tell us what flavors they think will be tasty to them?”
“That's what we're doing with the survey—asking them whether they want cherry lemon or
root beer,” says Jill.
“I know,” says Andy, “but if we ask them to write in their exact ideas for a great new flavor, we
might be surprised at what interesting ideas our fans come up with”
Open-ended questions allow respondents to enter any content they wish, allowing for gather-
ing information that marketers dont or cannot anticipate.
Such questions are appropriate in a range of situations:
1. When soliciting feedback about consumer attitudes in situations where nuanced experiences
are common, such as in complex customer-service interactions. For instance, brands can ask
for detailed descriptions of consumers’ experiences in a particular store, such as what aspects
of the service were particularly helpful.
2. For crowdsourcing ideas for products and services.
3. In gathering more complex qualitative data, such as the reasons for brand preferences. For
instance, if a consumer rates their preference for one brand as significantly higher than
another, they may be prompted to describe the reasons why in order to gather more data.
4. When seeking input from consumers whose needs, attitudes, and preferences are little under-
stood, such that multiple-choice or other suggested answers cannot be meaningfully written.
coding Analyzing open-ended questions is complex. Unlike other question types, marketers cannot
simply look at the percentages of respondents who selected each question choice. Instead, mar-
Fictional representations of
a consumer type, used to keters traditionally used coding, a strategy borrowed from the social sciences, to assign numerical
target promotions and codes to specific themes that emerge in qualitative data. For instance, if many consumers indicate
develop products with that they want some type of berry flavor in the open-ended Zest survey question, all responses that
empathy for the consumer.
mention a berry flavor would be coded with an arbitrarily selected number, to make it easier to see
how many such responses there are. We will learn more about coding later in this chapter.
In recent times, larger surveys are analyzed by text analytics tools, using computers to look for
patterns in the data, turning qualitative data into quantitative, thus making it easier to analyze in
aggregate.
Smaller surveys often do not require coding, or any translation of qualitative data into quan-
titative. Instead, marketers read through the responses, looking manually for patterns in the data.
They may summarize the data with direct quotations from the responses, looking holistically for
impressions of consumer sentiment or need. This type of analysis can be time-consuming. How-
ever, it can yield critical new insights for patient researchers.
283
10.6 Qualitative, In-Depth Research

In the previous sections, we learned about surveys. Since they gather mainly data that can be mea-
sured with numbers, such as asking the percentage of consumers who prefer one flavor of soda
to another, surveys are often entirely or primarily classified as quantitative data. That is, they pro-
vide data that can be described as numbers. Offline marketing data collection is more than just
simple surveys, however. To offer companies complete data, marketers need to combine quantita-
tive methods with in-depth, qualitative research methods. Surveys, by their very nature, provide
consumers with pre-determined views from which they can select those that they feel apply to
them. Even open-ended questions may still constrain respondents to offering only the information
required by the question. For instance, if you ask people an open-ended question with a prompt to
describe their recent trip to one of your stores, they may share detailed information on that trip.
But if what you really want to know is if your stores are pleasant places to shop, as well as what
specific features of the store experience make it pleasant, this question is too limited to obtain that
information. More in-depth questioning is needed to get such robust data.”*!
Qualitative market research methods go beyond surveys to provide rich, important infor-
mation on products, pricing, promotion, and place. According to Communications for Research,
founded by Colson Steber, “The purpose of qualitative research is to go deeper into understanding
insights into customer motivation and emotion. In this sense, if quantitative research is mainly
about the ‘what’ of customer behavior, qualitative research is about the ‘why.”*! This determination
of why consumers hold specific beliefs can get to the core of a brand's position in a market. In the
hands of creative marketers, it can also point the way to new innovations in a product. Qualita-
tive methods provide unique data that can shape a brand more strategically. In this section, we
will explore three key qualitative data collection methodologies: focus groups, interviews, and field
studies.
Focus Groups
Focus groups gather consumers who belong to specific target segments in a room, in-person or vir-
tual, to discuss their views interactively. These round-table discussions allows marketers to gather
deeper insights into customer views, needs, and attitudes. Moderated by a researcher, focus groups
start with general questions, such as their needs for a particular type of product. For instance, the
researcher may ask: “What do you look for in a laundry detergent?” Consumers are encouraged to
talk with the researcher and each other about their views, while the researcher records the meet-
ing and may also take notes. Often, other researchers observe the group from behind a two-way
mirror, taking notes and watching facial expressions, body language, and tones of voice among the
participants.
To conduct an effective focus group, researchers first recruit representative
participants. Just as with surveys, recruiting focus group participants who accu-
rately represent the target audience is critical for accuracy. Market research firms
often have panels already recruited for many types of consumers, such as differ-
ent age groups or occupations. The group typically meets for a single session of
one to three hours, in a conference room or via video call.
FOCUS GROUPS
WORK
Focus groups can be sidetracked by groupthink. A strongly opinionated participant may bring
the rest of the group to agree with their views, thus skewing their results. Skillful management
by an experienced facilitator is needed. When done correctly, focus groups provide deep qualitative
data that can shape brand positioning and identify new product opportunities.
Interviews
One-on-one interviews are a type of data collection in which consumers meet with researchers or
talk via phone or video for an extended session. This can gain deep knowledge about how a particu-
lar consumer feels about a specific product or brand. More importantly, it can help develop a profile
of a particular type of consumer. Interviews are used in a range of situations:
personas 1. To gain firsthand knowledge of representative customers’ views holistically rather than as sep-
Fictional representations of arate questions. This can allow brands to know in-depth about a customer's entire view of a
a consumer type, used to brand, an industry, and their own needs as a consumer.
target promotions and
develop products with 2. To uncover customer opinions of which a brand may not be aware and thus not be able to mea-
empathy for the consumer. sure using pre-written survey questions, not even those that are open-ended. In other words,
interviews can give marketers information for which they did not know to ask.
3. To develop customer personas based on real consumers. Personas are fictional representations
of aconsumer type, used to target promotions and develop products with empathy for the con-
sumer. While a persona is an imaginary customer based on a broad customer type, using real
customers to develop these personas adds authenticity, making the personas more reliable as
guides to customer needs.
4. In user research, to understand how consumers use a product. Interviews allow consumers to
walk researchers through their daily lives with a focus on how the product plays a role in meet-
ing their needs. This can help optimize product performance.
Interviews can be used for a range of other purposes where other, more structured data-gath-
ering is not sufficient. To conduct effective interviews, researchers must first identify respondents,
just as they would for a survey. Interviewers must be trained to listen, avoid leading respon-
dents, and ask thoughtful follow-ups to elicit the maximum amount of information. Interviewing
takes time, while reaching only a limited number of respondents. They are thus less popular than
surveys. However, they can be one of the most productive forms of market research in some appli-
cations because of the deep, nuanced qualitative data gathered. Interviews are often used when
launching new products, as the investment in this costly process is worthwhile in comparison to
285
the costs involved in developing the wrong product features. They are also often used when re-
branding, addressing new competitive challenges, or designing new versions of existing products.
In these contexts, they can help align major initiatives across the 4Ps as closely as possible with rel-
evant consumer needs.
Customer Communities
For many brands, building customer communities is a central way for them to gather feedback
from their most loyal customers. Communities can exist as standalone platforms, into which con-
sumers opt in, often by invitation. Others grow organically, as part of efforts to help customers with
technical and other support. Whether a support forum or a purpose-built community for feedback,
special offers, and conversation, customer communities provide a more natural environment for
collecting customers’ views than either surveys or focus groups. They can also be a way to create
value for the customers themselves through peer-to-peer connections."
The challenges with customer communities include some of the same sampling bias that
impacts other methodologies. Consumers who join communities are self-selecting. Nonetheless, in
the early 2000s, they became a critical part of many brands’ marketing strategies, including their
qualitative data-gathering efforts. In recent years, communities have been reduced in number, or
moved to social media, where they become part of brand pages. However, those communities that
remain have become stronger sources of qualitative data than ever. By analyzing posts in commu-
nity forums, brands can measure sentiment, gain ideas for new product features, map the customer
journey, and understand customer personas. Many communities take qualitative data-gathering a
step further, asking questions of community members. Thus, the data-gathering intent of the com-
munity is made more explicit. In addition, brands may release test versions of new products to
community members, seeking the feedback of their most committed customers before finalizing
features and releasing them to the market. In this way, communities are some brands’ most essen-
tial ongoing method of qualitative research.
Oo
Field Observation
a product and watching how
Field observation involves going out to where consumers are using
researchers may take notes while
they interact with a brand or product type. In field observation
consumers perform tasks, such as using a company’s products, or while shopping in a store. The
goal is to gather data using direct observation, rather than by asking consumers. This can lead to
more accurate data than asking consumers about their views would alone, since direct observation
eliminates biased or partial recall by consumers of how they actually behave.
For instance, let's go back once again to GardeniYa. They want to know how those large-store
garden center managers use their system to enter orders. They send researchers to twenty different
centers. The researchers spend a week at each location, watching the staff manage inventory, ring
up sales, and track e-commerce shipments using the tool. They take notes as they observe. They
may also ask staffers to walk them through specific tasks, showing them how they use the system
in their jobs. They may ask users specifically to highlight any interesting areas, such as tasks that
are hard to do, or where the software is especially helpful. In doing so, they find information that
they did not gain from any surveys: Most companies use only 20% of all the software's features.
Employees are unaware of most of the features, presenting an opportunity for GardeniYa to mar-
ket those lesser-known features, potentially gaining market share.
When the goal of field observation research is to develop a new product, observers will go into
the contexts in which the new product will be used, gathering information on consumer needs, the
environment in which the potential product is likely to be used, and what competitive or substitute
products consumers are using.
Sample Sizes in Qualitative Methods

When it comes to quantitative data, we have learned that sample size can have an impact on the
validity of results. In qualitative research, we still want our sample to represent accurately our
target segments. However, sample sizes are small, to make it more practical to conduct in-depth
data collection. Imagine conducting one-hour interviews with 250 consumers—it would simply be
impractical.
With qualitative methods, marketers utilize small sample sizes, often fewer than twenty
respondents, sometimes fewer than ten. These smaller samples allow marketers to go in depth with
consumers in a reasonable amount of time.
Even when sample size is small, it is still important that it be representative of the target mar-
ket. Great care is taken in selecting samples for focus groups and interviews, or appropriate sites
for field studies. It is even more important that these small samples include those consumers who
are able to share insights typical of the group they represent.
10.7 Analyzing Market Research Data

Once they complete their research, marketers need to analyze the data. For a simple questionnaire-
based survey, collating the data can often be done primarily by the survey tools themselves, most
of which provide basic statistics, such as the percentages of respondents who select a specific
option in a multiple-choice question, automatically. However, it's still important for marketers to
understand more advanced statistical methods, such as those that describe the accuracy and vari-
ability of the data. When it comes to analysis of qualitative data, researchers gain the benefit of
the analysis by reading consumers’ responses in depth. Although looking at the totality of a con-
sumers’ response is the focus of much qualitative research, nonetheless, identifying patterns in
free responses can yield valuable insights. Regardless of the method, market researchers need to
process data in order to analyze it. In this section, we'll learn about how marketers process the data
they collect in the market research process.
287
Collating Survey Data

Most survey tools automatically calculate basic data, such as the percentages associated with each
response. They typically also generate charts that present the data attractively. In addition to these
automated, built-in tools, researchers also use Excel to perform closer statistical analysis on large
datasets. Using functions such as pivot tables, a special function in Excel that allows patterns to be
determined from larger datasets, they can process data to focus on the data most valuable for deci-
sion-making.
Surveys are seldom so large that they become big data, which involves terabytes of data. Thus,
machine learning or other advanced data analytics tools, such as we will read about in Chapter
12, are typically not used for surveys. Spreadsheet tools such as Excel are sufficient to analyze, for
instance, the number of respondents of a given demographic who prefer a specific product variant.
Once processed, researchers can present data in charts, tables and graphs, often created from Excel
or in presentation tools, such as Google Slides. These basic tools are powerful enough to analyze
even large, complex surveys, giving marketers the answers they need.
Once calculated, survey results are typically presented in charts and tables. Graphing data is
also often automatically performed by survey tools. It is also straightforward to turn Excel sheets
into graphs. However, many marketers prefer to create their own, focusing on key highlights to
make it easier to identify useful patterns in the data. When doing so, it’s important to present data
in a way that’s accurate. For instance, in a chart, it's important to use a scale for data visualiza-
tions that show the proportions of different percentages, rather than exaggerating one number
over another.*!
FIGURE 10.2 Data Presentation

Same data
8007- : - 1,200
e B 900
rou rol
& &§ 600
6 6
- i
® o
= -€ 300
| 3
z Zz
0
20-29 30-39 40-49 50-59 60-69 70-79 < 40 40-49 60-69 >70
Age group Age group

Good Bad
e Equal size Intervals ¢ Not even size intervals
Simple, clear charts using proportional x and y axes, tables with data, and other straightfor-
ward illustrations are useful for analyzing data.
Collating and Coding Qualitative Data

information.
With qualitative data, analysis is often more in-depth, as befits this type of
on. Such data
Researchers may collect key quotes from interviews, collecting them in a presentati
in social sciences research in which researcher s read
may also be coded. Coding is a method used
often. For example, in interviews of two
through qualitative data, looking for themes that appear
dozen garden-center staffers, the GardeniYa team finds that several concepts are mentioned repeat-
edly:
- “I wish it were easier to check inventory.”
* “Checking what we have out back is a hassle.”
- “We need to know what's in stock quickly to keep the line moving on weekends.”
All of the above statements pertain to needing an efficient tool for checking inventory. They
use different terms, so simply counting mentions of the word “inventory” would not suffice. A large
dataset could use machine learning to look for inventory-related words, but it would still require a
human data scientist or marketer's input to train the system to recognize synonyms for the word
“inventory.” Machine learning is impractical for small amounts of data; we will learn more about
machine learning and artificial intelligence (AI) in Chapter 12. Thus, when analyzing small-scale
qualitative data, manual methods provide the most accuracy. In coding, researchers read through
each narrative that has been collected, such as an interview transcript or free-response answer.
They note themes in each one, for instance, in the case above, repeated mentions of inventory tools’
importance. They then give each theme a number or other short notation, so that they can quickly
mark each instance of the theme appearing. For example, they may label each instance when an
interviewee talks about inventory systems with a “1.” The researchers can then tally the number
of times a theme appears readily. This can then help quantify the relative importance of different
themes for easier analysis."
Basic Statistical Methods in Quantitative

Survey Analysis
While this is not astatistics book, it can be helpful to understand some of the basic statistical analy-
ses performed to analyze market research. Knowing how percentages such as “45% of consumers
prefer our organic products’ can help marketers be savvier managers of market research projects.
Understanding how such percentages are calculated can help us learn how reliable the data is for
making marketing decisions. In addition, we can interpret our data in greater depth, as well as com-
municate from a more knowledgeable position with our market research firms, if we know some
foundations of statistical analysis in market research.
confidence interval Three of the most common statistical concepts that marketers encounter when interpreting
The range into which research are the standard deviation of data, the confidence interval, and the margin of error. All of
survey data will fall, even if these terms can be useful in working with market research data, both qualitative and quantitative.
though it will vary each
In this section, we'll learn more about these three foundational concepts in statistical analysis for
time it’s gathered, used as
a measure of the reliability market research.
of results.
Standard Deviation
standard deviation
The standard deviation gives us the typical amount by which each individual number in a group
varies from the average. The higher the standard deviation, the more varied each individual's
The amount by which each
individual number in a response is. For instance, let's say the average amount that makers spend on sewing tools each year
series of numbers varies is around $249. Some spend more, while some spend less—but by how much do makers tend to vary
from the average. from the average? Are they all fairly close to spending $249, or do some spend three times as much
while some don't spend anything? The standard deviation is a numerical measure of how varied
consumers are within a group surveyed from the calculated average.
Knowing the standard deviation for quantitative survey data helps marketers understand how
varied their consumers are. This helps them understand how diverse a segment is on a particular
topic. It can also help determine whether what appeared to be a single segment may, in fact, be sev-
eral separate segments. For example, SewingPie surveyed makers, asking how much they spend on
materials. Although the average was $249, the standard deviation was more than $300, a high num-
ber. That means that makers vary quite a lot in how much they like to spend on supplies each year.
After seeing the large standard deviation, Chloe realized that there may be three distinct segments
of sewing-material shoppers: upcyclers, who buy nothing; moderate spenders, who spend small to
medium amounts; and large spenders, who may be more affluent or sew professionally. She decides
to conduct further surveys to understand these potential segments better. By examining the stan-
dard deviation, she gained a better understanding of the differences among consumers she thought
were a single, unified segment.
Confidence Interval
Whenever we survey a sample, we will get slightly different results. This is because no sample is
a completely identical representation of an entire population. Think about the students on your
residence house floor. Some may have a higher mileage on their car than the average student in
your school, some may have a lower one. However, unless your residence selects by car mileage or
another factor that correlates with it, their average mileage is probably close to the average for the
entire school. It may, however, be a few miles higher or lower. Next year, your fellow residents may
be different students. They may still be close to average, but their average vehicle mileage may be
only a few miles or lower than the school's average. Each time you survey a slightly different group
of people, even if, overall, they represent the average member of their population well, the results
will be very slightly different. However, they will fall within a predictable range. That predictable
range is the confidence interval. A confidence interval can represent 80% of all possible respon-
dents or 99% of all possible respondents, or anything in between.
FIGURE 10.3 Confidence Interval
zg O a
e interval we
To find the confidence interval, we need to first determine how large a confidenc
range into which 80% of all students fall? Or would
want. In other words, do we want to know the
covers 99% of all students? For most
we feel better about the data if we identified the range that
know the mean and the standard
surveys, researchers choose a 90%, 95%, or 99% interval. Once we
formula; you can find many
deviation, we can calculate the confidence interval using a complex
confidence interval calculators online. One popular tool is available at Statistics How To. Many sur-
vey tools can also calculate the confidence interval for researchers.
FIGURE 10.4 Margin of Error
\
Sample size = 4,147
Margin of error = 2%
Sample size = 1,843

Sample size = 1,037

Sample size = 664

40% 45% 50% 55% 60%
10% 166
Understanding the confidence interval can help marketers know the range into which their
outliers
most typical customers fall on a quantitative measure. Let’s go back to GardeniYa. They surveyed
In a study or survey, some
examples that are highly
garden center owners on how much they spent on business software. Amounts spent ranged from
divergent from the norm. $0 to tens of thousands of dollars. These outliers, or examples that are highly divergent from the
norm, skewed the mean such that the marketing team didn't have faith in it as a guide to how much
a typical garden center would be willing to spend on software per year. They calculated a 95% con-
fidence interval. They found that 95% of their respondents spent between $1,100 and $2,300 on
business software each year. Knowing that this was the range into which most of their customers
fit, they now feel that they understand their typical customer's spending patterns.
Margin of Error
Earlier in this chapter, we learned about sampling error. Sampling error, as you may recall, is the
confidence level
extent to which a sample doesn't represent a customer segment accurately. An additional way
The odds that if a survey is
repeated it would produce researchers deal with sampling error is by calculating the margin of error. The margin of error is
the same results. the number of percentage points by which the true numbers representing a datapoint may vary
from the numbers unearthed by the survey. For instance, let's say SewingPie surveys 1,000 makers.
replicated They find that 80% of them want to learn new skills in the next year. The survey's margin of error
Said of a study, having the is 4%, so the actual percentage of makers in the United States who want to learn new skills is likely
same outcome if
between 76% (80 — 4) and 84% (80 + 4). The margin of error depends on the sample size along with
conducted multiple times.
Used to signify the study the confidence level desired. The confidence level is different from the confidence interval. While
reliability. the confidence interval is the range within which most consumers fall, the confidence level is the
odds that, if a survey were repeated, it would produce the same results.) To have 95% confidence
that a survey will be replicated, or have the same results, if repeated, a sample size of 1,000 respon-
dents will have a margin of error of 3%. That means that we can be 95% sure that, no matter how
many times we repeat a survey, each statistic that emerges from the survey will be in the range of
three percentage points more or less than the statistics in the original survey.
291
Small sample sizes have larger margins of error than larger sizes, although
at 1,000 respon-
dents, margin of error is 3% and starts to decline only slightly with more responde
nts.“ Thus, most
surveys will have a few hundred to one thousand respondents to achieve a reasonabl
y small mar-
gin of error.
Knowing the margin of error helps marketers understand how trustworthy survey data is.
For
instance, with the margin of error noted above, Chloe now understands that the number
of peo-
ple in her target audience interested in learning something new could be off by three percentage
points; this is a small margin of error, so she can trust her data.
10.8 A Closer Look: Creating the

Right Interface
Let's go back to Tutor Pursuit, whom we met at the beginning of the chapter. They have now been
in business for five years. In that time, they have developed effective tutoring solutions for remote
instruction, including a portal through which tutors and students can meet for live video sessions.
They would like to build a more robust portal, one that includes documents, quizzes, resources, and
a full learning center where students can study together.
They want to know what features would be most used by their customers.
Looking at their existing web analytics will not tell them this because these fea-
tures do not yet exist at all on their site! Neither will looking at social media.
Although some consumers have posted Instagram comments about desired
product features, such comments are rare. They do, however, have some vital
information from their analytics: The aforementioned social media posts have
contributed to a list of potential product features, while looking at their web ana-
lytics, they can see heavy traffic to their blog posts about studying in groups.
Thus, they speculate that a group collaboration tool might be a welcome addition
to their product. But they need to know for certain before investing in the effort.
A : - : Shutterstock, ;
It takes at least $250,000 to build that feature,” says LaKeisha Wentworth, iN el
Tutor Pursuit's head of engineering, to their CEO, Max James. “We want to be sure that this is some-
thing the users want, giving a solid return on investment (ROI) in terms of new users we attract to
the platform.”
“How can we be sure? All we have currently is web analytics and social media data, and they
look pretty strong to me, but youre right, it’s still not the direct voice of our consumers.”
“We can start out with a survey to our existing customers, asking them about this feature. We
should include an open-ended question, too, where they can provide other ideas for features. Let's
also conduct interviews with representative users, as well as conducting a field study at some of the
schools that use Tutor Pursuit. That way, we know consumers want this feature before we invest
so much.”
“Wont that take time?” asks Max. ;
“Tt will,” answers LaKeisha, “but much less time than we would take building the feature if it's
not the right one.”
The initial survey results come in two weeks later. Only 30% of current consumers would pay
extra for the group collaboration tool. However, when the team conducts field studies at their part-
ner schools, they find that group collaboration is beneficial. Finally, within a month, they have also
conducted interviews with twenty users. They find that they do wish to collaborate with peers, but
and
that they are used to using conventional tools such as Zoom to do so. With this qualitative
quantitative input, the team builds in a way for users to connect their Zoom accounts with their
Tutor Pursuit account. It only costs $80,000 to develop this method of embedding Zoom with the
existing portal. Users are very pleased with this new option, which is what they wanted for collab-
oration rather than a new tool that takes time to learn.
“Thanks to market research, especially the qualitative methods, our company saved $170,000 in
engineering costs, while making our customers happier than ever before!” says Max.
“It was definitely worth doing that research,” notes LaKeisha. “Now, about that raise, since I
just saved the company a lot of money....”
10.9 Do the Math: Standard Deviation
Any group of individuals will vary, even with a fairly similar group. For example, let's say that
SewingPie surveys active makers about how much they spend each year on supplies. Some will say
they spend over $1,000/year, some will spend nothing, only upcycling materials they find. Most will
be in between, but still with variance: One maker will spend $200/year, another $450. When calcu-
lating the average across several different numbers, most market researchers use the mean—the
total of all numbers, divided by the number of individual figures. For instance, if Chloe asks ten
people how much they spend on supplies, she may end up with the following ten responses:
$100, $0, $250, $300, $40, $700, $25, $80, $1, 000, $0
To find the average, Chloe uses the mean. To find this, she adds all the above numbers and divides
that total by the number of responses.
100 + 0 + 250 + 300 + 40 + 700 + 25 + 80+ 1,000 + 0 + 10 = 249.50
Thus, she finds that the average maker spends $249.50 per year on supplies. However, as you can
see, no maker spent that exact amount, and only one individual came close to actually spending it.
There is a great deal of variation in responses, which the mean does not represent well, because it's
the average of all amounts. To determine how much individual responses vary from the mean, we
calculate the standard deviation. The standard deviation is the typical amount by which each indi-
vidual response, in this case, each individual spending amount, varies from the average.
To calculate the standard deviation, we find the difference between each individual response
and the mean. Then, we find the mean of all the differences, then the square root of that mean.
Here's how it works:
We first subtract the mean from each individual response. That tells us how much each
instance differs, or deviates, from this average. Then, we square each resulting number, add them
up, and divide by the number of individual responses. Finally, we find the square root of that result-
ing number. To see
First, subtract the mean from each individual response:
293
100 — 249.50 = —149.50

0 — 249.50 = —249.50
250 — 249.50 = 0.50
300 — 249.50 = 50.50
40 — 249.50 = —209.50
700 — 249.50 = 450.50
25 — 249.50 = —224.50
80 — 249.50 = —169.50
1,000 — 249.50 = 750.50
0 — 249.50 = —249.50
Then, square each result:
149.50” = 22, 350.25

(—249.50)? = 62, 250.25
0.57 = 0.25
50.507 = 2,550.25
(—209.50)? = 43, 890.25
450.50? = 202, 950.25
224.507 = 50, 400.25
169.50? = 28, 730.25
750.502 = 563, 250.25
(—249.50)? = 62, 250.25
Add them together, and divide by the number of individual responses, in this case, 10:
976, 372/10 = 97, 637.20
And find its square root = 322.28.

This means that, on average, the amount that members of SewingPie's target audience will
spend on supplies varies by $322.28. That is a large amount of variation. It means a lot of diversity
exists among these consumers in terms of the variable being measured, in this case, their budgets.
As we discussed before, this, in turn, means that these consumers’ budgets vary a lot, because
$322.28 is a lot of difference for a budget to participate in a relatively lower-cost hobby, hand-sewing.
Knowing that consumers vary widely in the budgets they have allocated to your type of product,
what would you do to market your offerings effectively to this wide range of spenders?
10.10 Conclusion
Market research, a traditional methodology, remains a critical way for marketers to gather data
on the 4Ps. Market research can include both quantitative methods such as surveys with no free-
response questions, qualitative methods such as focus groups and interviews, and instruments
that gather both types of data, such as questionnaires that include open-ended questions. In
designing questionnaires for market research, brands need to use the right questions for each type
of data needed, avoiding leading questions and respondent fatigue. Samples of respondents need to
be a strong representation of the consumer group being studied; sampling errors can range among
different types, from non-response to incorrectly identifying the target audience for a survey. Sam-
ple sizes can be in the hundreds for a survey, while may be under ten for a focus group. The size of
a sample has a direct bearing on the accuracy of survey results.
Qualitative research is often critical for truly understanding consumers. Methods including
focus groups, field studies, and interviews get to the heart of consumers’ views by sitting down
and talking to them holistically, letting the consumer express their true opinions on key market
questions. Field studies, in addition, are the most effective means of understanding product and
service needs in the context of real-world usage, as marketers embed themselves with customer
organizations to see consumer needs in real life. Though more resource-intensive than surveying,
qualitative studies play a vital role in marketing data.
When analyzing survey data, marketers pay close attention to the standard deviation, which
measures how varied response data is, the confidence interval, which is the range into which
responses will typically fall no matter how many times the survey is repeated, and the margin of
error, which is the number of percentage points by which the true numbers representing a dat-
apoint may vary from the numbers unearthed by the survey. Understanding these fundamental
statistics can help marketers manage and apply data effectively.
Market research continues to be an essential data source and analysis methodology for the
modern marketer. A century after it was first developed into a discipline of its own, it remains the
primary source for consumer opinion data, market positioning, and product research.
295
. What are the main differences between market measurement and market research for mar-
keting? When might a company engage in market measurement? When might they conduct
company-specific research?
. Describe some of the questions researchers might ask in a usage and attitudes study? When
might they deploy such a study?
. Define the term “top-of-mind awareness?” What does it mean? And how do brands measure
it?
. What is the main difference between aided and unaided recall? Describe the benefits and
drawbacks of each method.
. Describe, in your own words, Net Promoter Score. What does it measure?
. Distinguish between Net Promoter Score and CSAT. Do you feel, in your opinion, that they
measure different metrics? Why or why not?
. What is meant by sampling error?
. Name three methods researchers use to combat sampling error.
. When would you use a multiple-choice question instead of multiple-answer question?
. Name some appropriate uses of a rating scale question.
. What are some of the benefits of using open-ended questions in a survey? How can
researchers ask effective open-ended questions without leading?
. What are some of the benefits of conducting a focus group?
. What are some of the benefits to doing an interview-style market research?
. Name four types of sampling errors and give a brief description of each of them.
. When would a brand use customer interviews to gather data, rather than, or in addition to, a
survey?
. Jennie’s Garage is a regional chain of auto repair shops located throughout the southern
United States. Their CEO, Jennie Gomez, is looking to learn how much consumers think is
reasonable to spend each year on car repairs before they decide to get a new vehicle. Since
this amount will vary by location, each location’s responses are analyzed separately. For
a small location in western Alabama, the responses were as follows: $1,000, $500, $200,
$900, $1,500, $1,000, $2,000, $700, $800, $600, and $400. What is the mean amount con-
sumers are willing to spend at this location?
ihe Going back to Jennie’s Garage, the team now wants to know the standard deviation for the
survey results discussed in Question 14. What is the standard deviation of those numbers?
18. Conceptually, what does a high standard deviation tell us about the customers? How about
alow standard deviation? Argue which one is better.
Tg, What happens when outliers are detected? How do outliers affect the data and why should
we take note of them when analyzing our data? What statistical tool can help us better
understand customers despite them?
20. Explain how to calculate the margin of error and what it is used for.
We Kuhn, George. “What Is a Market Research Panel?” Drive Research, June

10, 2020. https://www.driveresearch.com/market-research-company-
Endnotes
blog/what-is-a-market-research-panel/.
18. “Sampling and Non-Sampling Errors (and How to Minimize Them).”
Qualtrics, April 10, 2021. https://www.qualtrics.com/experience-manage-
ment/research/sampling-errors/.
. Burns, Alvin C., Ann Veeck, and Ronald F. Bush. Marketing Research.
Boston: Pearson, 2017.
. “Where Did It All Begin? A Brief History of Market Research.” Research . “How to Avoid Sampling Bias in Research.” Alchemer, May 4, 2019.
by Design, August 18, 2018. https://www.researchbydesign.co.uk/show- https://www.surveygizmo.com/resources/blog/how-to-avoid-sampling-
case/blog/where-did-it-all-begin-a-brief-history-of-market-research/. bias-in-research/.
. Hague, Paul. “Chapters 1-2.” Essay. In A Practical Guide to Market . Ibid.
Research, 5-9, Guildford, Surrey, UK: Grosvenor House Publishing, n.d. . Nickolas, Steven. “How Stratified Random Sampling Works.” Investope-
. “20 Most Common Market Research Survey Types.” Qualtrics, December dia, May 1, 2021. https://www.investopedia.com/ask/answers/032615/
21, 2020. https://www.qualtrics.com/experience-management/research/ what-are-some-examples-stratified-random-sampling.asp.
common-types-of-surveys/.
23. “Sampling and Non-Sampling Errors (and How to Minimize Them).”
. Burns, Alvin C., Ann Veeck, and Ronald F. Bush. Marketing Research. Qualtrics, April 10, 2021. https://www.qualtrics.com/experience-manage-
Boston: Pearson, 2017. ment/research/sampling-errors/.
. Blank, Steven G. The Four Steps to the Epiphany: Successful Strategies 24. Stiles, Kelvin. “Survey Fatigue 101: Everything You Should Know Before
for Products That Win. Hoboken, NJ: John Wiley & Sons, Inc., 2020. Creating Your Next Online Survey." December 18, 2018. https://www.sur-
. Blank, Steven G. The Four Steps to the Epiphany: Successful Strategies veycrest.com/blog/survey-fatigue-101/.
for Products That Win. Hoboken, NJ: John Wiley & Sons, Inc., 2020. 25, Burns, Alvin C., Ann Veeck, and Ronald F. Bush. Marketing Research,
. Ibid. 174-206. Boston: Pearson, 2017.
. Ethington, Justin. “Primary vs. Secondary Market Research.” Qualtrics, 26. Sincavage, Elizabeth. “What Are the Best Types of Questions for Quanti-
June 22, 2020. https://www.qualtrics.com/blog/primary-vs-secondary- tative Market Research?” Market Research Companies New York, August
market-research/. 1, 2019. https://www.driveresearch.cor/market-research-company-blog/
. Burns, Alvin C., Ann Veeck, and Ronald F. Bush. Marketing Research. what-are-the-best-types-of-questions-for-quantitative-market-research/.
Boston: Pearson, 2017; Bouchrika, Imed. “Primary Research vs Sec- Pah “Likert Scale Questions: Definition, Examples and How to Use Pollfish.”
ondary Research: Definitions, Differences, and Examples." Guide 2 Pollfish Resources, October 8, 2020. https://resources.pollfish.com/mar-
Research, May 13, 2021. httos://www.guide2research.com/research/pri- ket-research/rating-scales-and-likert-scales/.
mary-research-vs-secondary-research. 28. “Quantitative vs Qualitative Market Research: Which Method Is Best for
10. “Understanding Market Metrics.” Dobney, May 13, 2021. http://www.dob- You?” Communications for Research, May 13, 2021.
ney.com/Research/market_metrics.htm. https://www.cfrinc.net/cfrblog/quantitative-vs-qualitative-market-
ule Williams, Geoff. “S Things to Keep in Mind When Serving Underserved research.
Markets.” Business Class: Trends and Insights |American Express, Sep- . Ibid.
tember 14, 2018. https://www.americanexpress.com/en-us/business/ . Lee, Bill. “Building Customer Communities Is the Key to Creating Value.”
trends-and-insights/articles/5-things-to-keep-in-mind-when-serving- Harvard Business Review, August 7, 2014. https://nbr.org/201 3/02/build-
underserved-markets/,
ing-customer-communities.
12. Blank, Steven G. The Four Steps to the Epiphany: Successful Strategies
. Peters, Christopher. “How to Design and Analyze a Survey.” Zapier, June
for Products That Win. Hoboken, NJ: John Wiley & Sons, Inc., 2020. 25, 2015. https://zapier.com/learn/forms-surveys/design-analyze-survey.
13. “Net Promoter Score Benchmarks for Top Brands.” Customer.guru, May
. Ibid.; Saldaria Johnny. The Coding Manual for Qualitative Researchers,
13, 2021. https://customer.guru/net-promoter-score/top-brands.
3-21 Los Angeles, CA: SAGE, 2021.
14. Hales, Derrick. “Top-of-Mind Over Matter: How to Measure Brand Aware-
. Glen, Stephanie. “Significance Level vs Confidence Level vs Confidence
ness.” Magnetic Creative, September 4, 2020. https://magneticcre-
Interval.” Data Science Central, September 30, 2019. https://www.data-
ative.com/measuring-brand-awareness/.
sciencecentral.con/profiles/blogs/significance-level-vs-confidence-level-
15. “The Definitive Guide to Brand Awareness Studies.” Alchemer, May 4, vs-confidence-interval.
2019. https://www.surveygizmo.com/resources/blog/the-definitive-guide-
. Hunter, Pamela. “Margin of Error and Confidence Levels Made Simple.”
to-brand-awareness-studies/.
iSixSigma, December 20,: 2012. https://www.isixsigma.conVtools-tem-
16. Burns, Alvin C., Ann Veeck, and Ronald F. Bush. Marketing Research. plates/sampling-data/margin-error-and-confidence-levels-made-simple/.
Boston: Pearson, 2017.
CHAPTER
11
The Engagement Economy
Learning Objectives

1. Define key metrics for video marketing, including play rate, various forms of click-through
rates, and channel metrics.
2. Distinguish between video content and video advertising metrics from the standpoint of mar-
keting strategy.
3. Analyze video advertising metrics, including key measures of return on investment (ROI).
iN . Understand the fundamental metrics of mobile apps for marketing.
5. Create a mobile app measurement strategy focused on marketing, rather than app-centric,
measures.
“We live in an engagement economy.”" With the rise of theories such as inbound marketing, broad-
cast advertising has given way to marketing channels that engage consumers with entertainment,
information, and communication from and with brands. Part of this transition to the engagement
economy has been the increased use of interactive channels, chief among them video and apps.
Measuring engagement-based channels involves using holistic methods that gather data on both
consumer behaviors that impact marketing decisions, such as product and place, as well as con-
sumers experiences with the media itself. We can certainly measure marketing outcomes from
videos and apps; however, often, direct sales and other standard conversions are not the chief key
performance indicators (KPIs) for engagement experiences. Instead, marketers must also look at
engagement itself as a goal whenever they measure apps or marketing videos. In this chapter, well
look at metrics of video marketing and mobile apps, as key drivers of marketing engagement. We
will look at ROI data for both channels, as well as techniques for measuring the user experience
that is so critical to engagement.
Brands spend $17.8 million a year on video ads,” while 88% of brands engage in video mar-
keting,’ which aims to educate or entertain consumers as much as it also sells products and
services. With the explosion of social media channels including Instagram and, TikTok, plus the
strong consumer use of YouTube and Facebook, video dominates much of the content landscape.
Understanding what video content, as well as video ads, are most effective in driving growth is
thus a critical aspect of most companies’ marketing analytics. In this chapter, we will learn how to
measure both video content and online video advertising. Apps also make up a steady portion of
marketing budgets, with retailers especially creating apps to drive sales.
These engagement-driven channels are critical to brands’ content, awareness, and sales strate-
gies, and in this chapter, well learn how we can measure them.
11.1 Understanding Video Metrics

Every day, 500 videos are uploaded to youTube each minute.“! Facebook users
watch 8 billion videos, as least in part, each day."! These statistics show that video
has become one of the major ways in which consumers and brands communi-
cate. Measuring video is important to companies’ overall marketing strategy,
providing valuable data on promotions and product in particular. In this section,
we will look at common metrics for measuring video across all channels, with a
close focus on video-centric channels, such as YouTube and social media. We'll
look at how marketers measure the contributions of video to overall marketing
programs, responses to video promotions overall, as well as to specific videos that
may relate closely to a brand's products or messaging strategy. We'll learn how to
use data to measure videos as a promotion, as well as how to translate video met-
Source; Shutterstock.com
rics into more global insights about a brand and its product lines.
Video Content Versus Video Advertising

Measurement
When we talk about measuring video, it is important to note that video marketing consists of two
video content
different types of video: content and advertising. Video content encompasses all videos posted to a
All videos posted to a
website, YouTube channel, website, YouTube channel, other video hosting service, or social media for the purposes of content
other video hosting marketing. It is non-advertising content, though it may be “boosted” or otherwise promoted to
service, or social media for viewers using a paid mechanism. However, it is not intended as advertising. It may inform, enter-
the purposes of content
marketing. It is
tain, or even promote, but it is not an advertisement spot.
non-advertising content,
Video ads, on the other hand, are commercial spots meant solely as advertising, such as pre-
though it may be
“boosted” or otherwise roll ads placed at the beginning of content videos. Measurement of video advertising blends data
promoted to viewers using from digital ad metrics with those common to video content. Later in the chapter, we'll explore
a paid mechanism. these metrics.
However, it is not intended
as advertising. Finally, video marketing is filled with native advertising. Native ads are commercials formatted
as content. They often take the form of infomercials published on YouTube, sponsored webinars in
video ads B2B media, and influencer videos devoted to a brand. Though the definition of influencer market-
A commercial video meant ing as native advertising is debated, it shares much in common with older forms of native content,
solely as advertising, such
as pre-roll ads placed at
in that it's styled as editorial content, yet its intent is purely sales. In measuring native advertising
the beginning of content and influencer messages, marketers rely on a subset of video content metrics, such as channel sub-
videos. scriber counts. We'll learn more about such metrics.
Live, Social, and Recorded Video

Measurement
In tracking video content marketing, it's also important to recall that video for mass consumption
is available in multiple formats: live, social, and recorded. Live video may be live-streamed on social
media or a live-streaming platform, presented as a webinar or online conference, or broadcast from
a brand's own website. Social video is a subset of recorded videos that is purpose-crafted for social
media. It's typically informal, brief, and designed to elicit engagement in the form of likes, shares,
and comments. Recorded videos are a broad category of most other types of media content. They
Chapter 11 The Engagement Economy
299
can be informational products demonstrations, behind-the-scenes employer recruitmen

t spots,
pre-recorded courses, or any more rehearsed or edited recorded videos. When we talk about
metrics
for different kinds of video, it's important to note that the purpose of a video greatly impacts
the
metrics that measure its efficacy:
+ Live video metrics include video analytics such as watch time. However, common sense must
be used in applying metrics more appropriate to video embedded on a website long-term. In
addition, social media metrics such as likes and comments are critical for live-streamed video.
Those measuring live video should also refer to Chapter 6.
* Social media videos represent a combination of live-streamed and recorded videos' design
ethic and goals. Social media data remains as important in their analytics as they are with
live-streaming; however, all other content metrics also apply to such content. It is up to the
marketing team to determine whether to set KPIs for social media videos that are closer to an
organization's social media targets or their traditional recorded video goals.
Recorded videos pre-date social media and, indeed, the web. Of all the video types, however,
recorded, non-social media video can be measured using the full array of data types outlined in
this chapter. Also, because they are a core part of brand communications, they are often used
as part of marketing collateral, rather than being central to a time-limited campaign. When
implemented as such, they have a longer time frame for measurement of their true ROI than
campaign-based videos.
Measurement of video depends on the goals not only of the video, but of the marketing pro-
gram of which it is a part. A product demonstration embedded in sales follow-up emails within a
marketing automation program shares more metrics with other automated messages than it does
with an informal livestream from a concert venue. Marketers should look at their video metrics
holistically, while taking full advantage of the detailed analytics outlined in this chapter. This holis-
tic approach cuts both ways: Video data can influence other campaigns and programs with its
granular insights into second-by-second consumer reactions.
11.2 Video Content Metrics
While video advertising is a $28 billion market, brands spend even more each year on creating
non-advertising video content. In this section, we will learn about the metrics for measuring video
content. As we learned early in this chapter, video content marketing takes many forms, and it
predates the internet. Videos can be presented as a YouTube channel, as live video programming
such as webinars, and as informational videos on a website. It's important to remember that the
KPIs that govern video are determined by a video's goals and format. A video that exists to make
consumers aware of a brand, for instance, created by an influencer, may be measured by the click-
throughs it drives to a brand's site. A sales webinar, on the other hand, may need to generate a
certain volume of sales to be considered successful. While it can be useful to apply all video con-
tent metrics to a given video campaign, marketers spend their time most wisely by measuring those
metrics that align best with the overarching campaign's KPIs.
Content Marketing and Video

most effec-
When the focus of a brand's video production is content marketing, video analytics are
metrics
tive when paired with content data from all of a brand's other channels. Combining widleo
sive view of cus-
with page visit data from the web analytics platform can provide a comprehen
and messaging engagemen t. For example,
tomer journeys, topics of interest to audience segments,
let's take a look at a subscription-box company, SoapBox. Sally Davis, its founder, started crafting
soaps in her dorm her senior year studying communications at Westbright University. Each month,
she creates a new scent, selling it to local boutiques. Customers have started asking to be notified as
soon as a new fragrance comes out; Sally decides that it's time to start subscriptions: Each month,
customers can get the new monthly soap delivered to their doors. To promote her business, Sally
starts a YouTube channel, where she talks about the origins and historical uses of the different
herbs she uses in her soaps, shares self-care tips, and comments on current trends. She also blogs
on her website, from which she also sells her soaps, attracting $100K in sales a month.
She has noticed that her most popular videos are the ones on self-care, attracting millions of
views on her channel. However, these videos are often general in nature, not promoting her soaps
so much as promoting her brand's values of integrity and health. While popular, they offer lim-
ited insights into what products most engage her consumers. They do offer strong insights into
the brand's perception in the market; comments on the self-care videos are 96% positive. That is
important. However, Sally wants the complete picture, not just what aspects of the brand appeal
to consumers and the brand's reputation, but also what specific products would be of interest next
month and beyond. For this, she turns to a comprehensive content analytics dashboard that inte-
grates content insights across all her content channels: her website, YouTube channel, and social
media. A dashboard is a comprehensive portal presenting metrics from different sources all in one
place, typically as easy-to-interpret charts. We'll learn more about dashboards in Chapter 12. For this
discussion, it's important to note that dashboards make it easier to gather metrics from different
channels that all offer insights on a key strategic area. In this case, looking at her content metrics
from across all her marketing efforts lets Sally understand the main topics that interest her fans.
She sees in the dashboard that, across both her blog and her YouTube channel, the content that
gains the greatest response focuses on self-care, such as skincare practices. Particularly popular are
seasonal tutorials, such as her popular video “How to Prevent Winter-Dry Skin.” After examining
this data, she decides to look at what blog posts are generating the most interest on her website.
Posts about seasonal herbs with therapeutic effects, such as lavender, are the most popular. She
posts several videos focused on the same topics as the blog, focusing on product ingredients rather
than general brand awareness themes. Average watch times increase immediately, with comple-
tion rates (the number of viewers watching an entire video) growing from 40% to 80%. From this
cross-channel content data, Sally develops the hypothesis that customers are looking to SoapBox
for seasonal support for health and beauty challenges. She decides to focus her formulas on sea-
sonal well-being needs, such as mixing a moisturizing herbal soap for winter months. Sales begin to
grow, especially when the product's monthly formula is promoted via the month's content. By the
end of Q3, sales have increased by 30%, thanks to product insights developed by looking at video
content metrics within a comprehensive content data dashboard. Video content often generates
more immediate responses than text-based content; thus, video content data provides vital insight
into consumers responses to brand themes.
Play Rate and Impressions Click-Through Rate
play rate
Unlike many video metrics, which indicate viewer responses to the video itself, the play rate or
impressions click-through rate tells marketers how enticing the video appeared to viewers before
The percentage of viewers
who saw a video and they play it.
opted to play it in part or in
When viewers first see a video, they must make a decision to start playing that video, based on
whole.
the topic, thumbnail, description, and the other contents of the page. Noting the percentage of page
impressions click- viewers who ultimately opted to play the video measures the efficacy of a video's presentation. It
through rate can tell marketers whether the description, thumbnail, and topic of the video were interesting
The term used by enough to get viewers to hit the “play” button. If most of those who view the video choose to play
YouTube for play rate. the video, then the video is presented effectively. However, if half or fewer of those who view the
video page click on “play,” then this likely indicates problems with how the video is presented. The
301
description may be unclear or unappealing, or the thumbnail may poorly represent the contents.
On YouTube, the percentage of viewers who saw a video, then decided to play it, is typically
measured as the impressions click-through rate (impressions CTR). This measures all impressions,
including those users who accessed a brand's channel, as well as those who saw a video appear
as a recommended video. For instance, when a user is presented with a recommendation at the
end of their viewing of a related video, or on the YouTube homepage, these recommendations
count as impressions, and are used to determine the impressions CTR. Typically, impressions from a
brand's own promotions, such as social media posts, are more likely to result in views than YouTube
recommendations impressions. Thus, if a high percentage of a video's impressions originate from
recommendations, the impressions CTR will be reduced in comparison to a video gaining traffic
mainly from promotions to a dedicated audience. In addition, the impressions CTR for in-YouTube
recommendations measures only those aspects of a video that appear in such recommendations,
typically, the thumbnail and title. Channel owners can determine what percentage of their impres-
sions come from recommendations through the “Impressions and how they led to watch time”
report within the YouTube channel analytics platform. We'll learn more about such channel-wide
data sources in the section on channel metrics.
Impressions CTR from recommendations also measures the efficacy of a video's keyword strat-
egy. YouTube is the world's second most-popular search engine." Accordingly, keyword optimiza-
tion is critical to success on YouTube. When a video's keywords are aligned with viewer interests,
click-throughs increase, the same as with pay-per-click (PPC) ads or organic search content. Rec-
ommendations, however, are not based solely on keywords. Instead, they use a complex algorithm
that takes into account a video's popularity and sentiment, along with each user's past video views
and videos liked by those with similar viewing patterns. Thus, as with organic search results, mar-
keters cannot rely entirely on metadata they control to optimize a video's chance of being seen
in recommendations. Nonetheless, monitoring impressions CTR from recommendations can help
marketers optimize for what they can control, which includes a videos keywords, description, title,
and creative elements such as thumbnails.
Engagement
As marketers, we don't simply want consumers to see our message; we hope they
are truly engaged with what we have to say. This is especially the case with inter-
active content channels, such as video, where strong engagement is the primary
driver of ROI. This is why content teams often focus on engagement metrics
when they assess the health of their video marketing efforts. In this section, we
will explore the top engagement metrics for content-based video marketing. In
reading this chapter, it's important to note that nearly all video metrics directly
or indirectly measure engagement, whether on the individual content, the chan-
nel, or the audience level. Thus, with video especially, it's important to look at
metrics as a whole, rather than individually, to have a comprehensive view of
video's impact on a brand. A single “viral” video may impress executives with its
reach, but it does little to drive longer term customer relationships. Thus, looking
at watch time or views alone, especially for a single video, presents a false picture
of a content program. It is better to look both at channel and individual metrics
to understand how video content is building a strong brand. A longitudinal
approach, examining trends over time, is also vital. Source: Shutterstock.com
Average Watch Time/Average View Duration
Facebook reports on video watch times both on average, and in how many viewers reached the spe-
cific view time milestones: three seconds, ten seconds, and one minute. In addition, for each video,
the platform reports on total watch time.
>] WATCH NOW
Average view duration (AVD) is the metric YouTube reports. It reflects the average length of
time each video was viewed; it is the total watch time, divided by the number of viewers each video
Source: Shutterstock.com received.”
Both average watch time and average view duration measure how much time viewers spent on
a video. It can measure rates of engagement, as well as potentially flagging portions of the video
where viewers stop watching. It can tell us what videos are most interesting.
Completion Rate and Retention
Completion rate is the percentage of viewers who watch a video to the end. Retention, though
related, is somewhat different. It measures the percentage of viewers at any given point in a video
who are still watching. The retention rate at the exact end of the video should equal the completion
rate. For instance, picture a laser-cutting tutorial on the website of a college maker lab. The video
starts with general information, such as safety, then shows viewers how to make wall art with a
laser cutter. It ends with some B-roll of art made by students. The completion rate indicates that
55% of viewers watched the whole video. That means that the retention rate at the final frame is
also 55%—that number of viewers were still watching at the end.
If we look at specific points in the video, we find that the retention rate—the number of view-
ers still watching—is 70% at the middle of the actual laser-cutting demo. That means that, at that
point in the video, 70% of viewers are still watching. When we look at the retention rate a few sec-
onds into the beginning of the final B-roll, we find that the retention rate sinks to 58% well before
the video has completed. Nearly half of all viewers stopped watching seconds after the demo por-
tion of it ended. This can indicate that the videos should be shortened to include only the demo, or
that the concluding content needs to be changed.
Total Watch Time
Many video platforms, including YouTube and Facebook, report the total watch time for a video.
This is the sum of all minutes consumed of a video, across all users, within a given time frame.
This can be a useful metric when comparing videos of similar length. For instance, let's imagine
a construction equipment company, Tuffcast. They make cranes, forklifts, and other key building
tools. Part of their content marketing strategy is to host webinars on sustainability trends in the
construction industry, such as how to include recycled materials in building design. Their webinars
are all the same length: thirty minutes. Recently, they noted that one webinar, on low-energy light-
ing fixtures, has the longest total watch time of all their webinars. At half an hour, like all their
other webinars, it has totaled over 700 hours of total watch time, while the second most-watched
half-hour webinar has only been viewed a total of 400 hours. This is a useful metric, because it's
comparing similar-length videos. They recently added some short videos, mainly demos of their
newest equipment. These videos are only five minutes long. Even if one of their demos is watched
to the end thousands of times, its total watch time will be lower than the total watch time of Tuff-
cast's least-popular webinar, because it simply offers fewer minutes to watch. Thus, for brands with
highly varied video content, total watch time can create more confusion than clarity. Total video
views and average watch time per video are more useful metrics of user engagement in such cases.
303
Drop-Off Time
Few, if any, videos achieve 100% completion rates. Consumers stop watching when they
have
obtained the information they sought, are disengaged, are interrupted, or distracted. The drop-off drop-off time
time metric indicates the timestamps of when viewers closed a video. Metric that indicates the
timestamps of when
Typically, drop-off times are grouped at specific points within a video. Although users may stop viewers closed a video.
at any point in a video, normally, there are patterns in drop-offs. It is these patterns in the data that
are most useful to content teams. These clustered points, at which larger groups of users dropped,
can indicate a range of information about how users perceived a video. Contrary to common belief,
not all drop-off points are negative, nor do all such points indicate poor quality content at the por-
tion of the video that experiences drop-offs. Drop-off points with many users stopping a video can
indicate any of the following:
1, The key portion of the video has just occurred, and viewers have gotten the knowledge or
entertainment they expected. This can point to issues with the video's structure: Perhaps it
should be shorter, stopping at the point at which viewers drop off naturally. Perhaps the pace is
too speedy, and users have received enough information partway through the video. However,
the video itself may be well-received overall, with high positive comment sentiment, frequent
shares, and millions of plays. The drop-off rate, if all other metrics point to positive reception
of a video, indicates a direction for optimization for an overall high-ROI content piece.
2. The context in which viewers are consuming video is high in distractions. Looking at when and
where users watch videos can indicate distraction as a reason for drop-off rates. For instance,
a video with a high percentage of mobile views will likely have higher drop-offs due to the
context in which video in consumed: on the go. If a user is watching a video at a bus stop, for
instance, they may stop viewing once their bus arrives. The key, again, is to look for consistent
patterns. If the drop-off point has distinctive peaks at specific points, then the drop-offs are
likely directly related to a video's content at the drop-off point. However, if the peaks are lower,
with a range of drop-off points distributed around those lower peaks, then drop-offs may be
indicative of user behavioral patterns, such as consuming video briefly in between other activ-
ities.
3. The users may genuinely be disengaged or experience other negative sentiment at a specific
point in the video. This may be the case especially with a single, pronounced drop-off point,
paired with higher-than-average negative comment sentiment. Often, reasons for dropping
off at the point may be mined from the comments. If the comments are small in quantity,
manual review of this qualitative data can reveal possible reasons for a sudden, large viewer
drop-off. When comment quantities are large, e.g., in the thousands, text analytics can provide
valuable sentiment analysis and is worthwhile in the case of a video with high viewership
and a large, early drop-off. This combination of data points—early drop-off, large drop-off, and
even slightly more negative comment sentiment than brand average—are clear indicators that
drop-off is showing issues with video quality.
4. The video may cover too many topics in a single piece. If drop-offs occur when a video's topic
shifts from one theme to another, then that may indicate that a brand's video is best edited
into smaller topics presented as individual items. As with the first issue, drop-off when desired
content has been consumed, this indicates less an issue with video quality than a need to re-
strategize content, approaching topics and messaging with audience needs at the forefront.
Marketers with video content that receives positive comments and other indicators of success,
yet considerable drop-offs, need to examine the reasons why consumers use their branded con-
tent: Do they need information on specific topics? Follow specific influencers? Have questions
at a specific point in the decision-making cycle?
As with many quantitative metrics, drop-off point alone cannot provide definitive guidance on
how to optimize creative work. Instead, it should be paired with qualitative analysis to determine
the reasons for high-volume drop-off points.
Comments, Shares, and Comment Sentiment
When brands post a video to any channel, they are hoping to engage with viewers. Part of how
we measure that engagement is through viewer comments. Just as with social media, we measure
engagement with the total of many viewers making comments or sharing the video with con-
nections. We can also measure the sentiment of comments, on a continuum from positive to
negative. Because they are such an immediate form of content, videos often have polarized senti-
ment, especially in B2C. This can make it harder to determine the net sentiment for a video because
consumers can be divided in their comments. However, it's important to measure the sentiment of
engagement in addition to its volume. A video with both high engagement and strong positive sen-
timent can drive high brand visibility, so marketers can develop stronger promotional strategies by
analyzing what videos drive a positive, highly engaged reception. The tactics for measuring video
are largely similar to those used for measuring social media engagement. For more on how to mea-
sure engagement metrics, see Chapter 6.
Conversion Rate
As with most other marketing channels, a key consideration for video marketing is its conversion
rate—that is, how many viewers saw a video, then took action to purchase, sign up, or engage in
other desired actions. Measuring video conversion rate usually requires multichannel attribution:
measuring the role that a marketing channel played in a series of engagements, or touches, that
eventually resulted in a conversion. Video has a higher conversion rate than many other digital
marketing channels, such as display advertising:" its greatest benefit, according to many marketers,
however, is that it lifts overall conversion rates from digital channels, especially website conver-
sions. Thus, video conversion rate is often measured in terms of conversion paths that include video
at some point along the path. This measurement can be achieved by looking at multichannel con-
version reports in a brand's web analytics tool. For more on attribution, see Chapter 9. When brands
invest in video, they must consider its overall contributions to customer awareness, growth, and
retention.
YouTube Channel Metrics
In addition to measurement of individual metrics, YouTube, as the world's most popular video dis-
tribution channel, provides a range of metrics to channel owners. These metrics provide additional
insights into the performance of video content. In addition, they provide valuable data on the
overall performance of a brand or influencer across the platform. In this section, we will explore
channel metrics. Although the focus is on YouTube channels, as they are the most common, other
video platforms provide similar metrics, and these metrics can be applied in other contexts, such as
social media pages, which also provide many of the same measurements.
305
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Subscribers
Brand channel owners scrutinize the growth of their subscriber base. A common belief among
marketers is that a channel is only successful with a high rate of subscribers, those who opt in to
receive updates when new content is added to the channel. However, the usefulness of the sub-
scriber metric depends on the intent of the channel. Certainly, influencers need subscribers. Their
brands are built on rapport with their audience as well as the sense of community they foster. An
informational channel, similarly, can be measured by its subscribers, who tune in to see new educa-
tional or news content, which, by its nature, is sequential and continuously updated. For a regular
brand, however, subscribers are only one measure of content marketing success. Brands can have
strong ROI without attracting a large number of subscribers, depending on their content market-
ing strategies.
Impressions and Impressions Click-Through Rate
Impressions can also be measured on the aggregate, channel level, as they are on individual videos.
impressions
This measure of reach can tell us much about video's contribution to potential brand awareness.
In video marketing, the
Impressions that take place outside of YouTube are not tracked in this metric.’ However, such off- number of times a video's
site impressions can be tracked in other ways. When a video is embedded on a brand's own website, opening screen or listing
impressions can be tracked as pageviews. When a video is part of an ad placement, impressions on was seen. Does not
indicate whether the user
the ad as a whole are trackable using custom tags created with a tag manager or the native analyt- played the video. Can also
ics available through the ad platform. measure the number of
times an entire YouTube
As with impressions, the impressions CTR is also trackable in aggregate form. When branding channel was seen, again
is consistent across all a brand's thumbnails, and titles are consistent, this metric, when examined not necessarily indicating
at the channel level, can cast light on how video is boosting brand awareness on YouTube. It can that any videos were
played.
indicate how well thumbnails and titles overall are encouraging visits to all channel videos. Trends
in impressions CTR for the entire channel should also be tracked as a trend over time. This can
measure the efficacy of efforts to increase engagement with video recommendations and drive traf-
fic to the channel. As a trending metric, it can provide some useful insights to marketers wishing to
optimize their visibility across YouTube.
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Google Analytics for Power Users
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Views and Unique Viewers
Views and unique viewers are key channel reach metrics. On the channel level, views and unique
views
viewers are aggregate numbers tracking the total number of each across the entire channel. As a
The total number of times
result, it isa good metric of the overall popularity of a channel. As a trending metric, it can measure
a video was viewed, even
in part. Also, on YouTube, the growth of content marketing efforts on YouTube, tracing the growth of viewership over time.
the total number of times In addition, it can provide channel owners who wish to monetize their channels with a key metric
all videos published by a
sought by advertisers seeking to engage with popular influencer channels. Brands wishing to work
channel were viewed.
with influencers typically first select the influencers based on their number of followers. This does
viewers not mean that only those with millions of followers are worth a brand's investment. Often, smaller
The total number of
influencers with followers in only the thousands have special niche content that aligns better with
individual users who have a brand's goals. Whether they seek to work with large-scale influencers or those who are more
viewed either a video, or, focused, brands use the views and unique viewers metric, alongside the more commonly used sub-
when used as a channel
metric on YouTube, the
scriber rate, to assess influencers’ reach.
number of individuals who However, viewership alone cannot measure how focused an audience is, nor how engaged. To
have viewed any video
published by a channel. determine an audience's engagement, those seeking to work with an influencer channel should
examine metrics such as subscriber rate growth, the percentage of watch hours attributed to sub-
scribers, comment rates, and comment sentiment.
Watch Time and Average View Duration
When analyzed on the channel level, the watch time metric indicates the total watch time for all
videos on a channel, across all viewers, in a given time period. It provides useful data on a channel's
overall popularity, particularly over time. It's a valuable metric for assessing influencers, indicating
the volume of exposure offered by the influencer’s channel.
On the channel level, average view duration (AVD) tells us the average time spent watching any
video on the channel. When videos on channels are fairly uniform in engagement and length, aver-
age view duration is a useful metric of the amount of time users spend engaged with their content.
Measuring channel-wide average view duration penalizes channels with a wide range of content,
such as videos of varied lengths, those with highly successful videos mixed with those less popular,
or those covering a range of topics. In such cases, channel AVD has issues with accuracy in measur-
ing the success of a channel's content, as it averages across all the varied content on the channel.
However, it has limited utility as a measure of the number of minutes consumers may be expected
to view a channel's messaging. This helps in determining the expected amount of exposure to a
307
brand's message. This can guide marketers in evaluating a YouTube channel

on which to advertise
or sponsor native influencer content, for example. It can also measure trends
in overall channel
engagement, by monitoring increases or decreases in channel AVD. In addition, it
provides an indi-
rect measure of brand exposure itself.
Audience
Audience data can provide basic insights into the age groups, self-identified genders, languages, and
regions of a channel's viewers. As with other audience data, such as that available for social media
pages, audience data for video channels is somewhat limited in its applications. Demographic
data is valuable, as we have learned before, if a brand's offerings are demographically focused. For
instance, if a brand sells a product of interest only to persons over age 65, such as post-retirement
financial planning, it makes sense to target a brand demographically. Location data is valuable
for marketing offerings that have geographically limited availability. However, in an increasingly
diverse, empowered consumer world, ever fewer products are relevant only to persons of a given
age, or identified with one of two binary genders. Thus, unless a product can only be marketed to
persons in a specific region or over or under a given age, demographic targeting, and thus demo-
graphic data, is of less value than it was to prior generations of marketers.
More useful in audience data are reports on subscribers. Within the audience report, YouTube
tracks what percentage of total watch time was performed by subscribers, in contrast with non-
subscribers. If a large percentage of watch time originates with subscribers, this is an indicator of
strong viewer loyalty. Indicators of growing loyalty can mean that viewers are more likely to con-
vert, that a channel will be attractive to advertisers, if advertisement is sought, or that content is
engaging. By contrast, a high percentage of views from non-subscribers does not necessarily indi-
cate that viewers dont return for more content. If a channel's overall audience is growing rapidly,
many viewers may be new to the channel, thus, not yet subscribers. The percentage of watch hours
by subscribers and non-subscribers should be examined in the light of other metrics, such as chan-
nel growth, conversion rates, and comment sentiment. However, if persistently more than 70% of
watch hours are from non-subscribers, reasons why viewers are not converting to subscribers mer-
its examination. Generally, a mature site with stable monthly viewership growth should see at least
30% of its watch hours from subscribers if content is engaging enough to merit viewer loyalty.
If watch hours do not achieve this proportion, then content should be evaluated for consistency,
engagement, and overall channel themes. It may be that content is too fragmented, attracting too
wide a range of viewers, who see only a few videos that are relevant to them. A low proportion of
subscriber views indicates a channel content strategy that may need focus or it can indicate the
overall video quality improvement.
Traffic Sources
Traffic source reporting shows channel owners the overall drivers of traffic to their channel. It is
heavily weighted toward YouTube's internal drivers of traffic, such as the many locations at which
recommendations appear. It is thus the most accurate reporting available on which type of rec-
ommendation within YouTube is generating the most click-throughs for overall channel content.
Recall that earlier in this chapter, we learned that impressions CTR is an important metric for how '
well a video's thumbnail and title interest viewers. We also learned that impressions CTRs tend to
be lower for recommendations than impressions for other promotions.
The traffic sources report can help marketers understand which types of recommendations
have the highest CTR and are thus the most effective in generating new viewers. That, in turn, has
exam-
several important implications: It can tell us what audiences find a video most appealing. For
ion
ple, let’s go back to Sally's video work. Her video on winter skincare appears as a recommendat
Of all
alongside influencer videos by beauty vloggers, how-tos on organic gardening, and ski videos.
these, it's the recommendations next to ski videos that drive the most traffic. This tells Sally that
she needs to do more to focus on winter-sports fans. In addition, traffic sources can tell marketers
where they need to do more to optimize their videos. For instance, let's say Sally's video appears
equally next to sports videos and beauty tutorials. However, the impressions click-through rate on
beauty tutorials is much lower. This could reflect an issue with the title, the thumbnail, or other
aspects of the creative being more appealing to sports fans than to beauty aficionados. If that's the
case, she can try out different video messaging to the beauty segment to increase her appeal to that
group.
There are many ways to interpret traffic sources—one way is to look at conversion rates from
different ones, analyzing not just simply what sources drive traffic, but which ones send higher-
converting viewers. This can focus marketing efforts and ensure a higher return on video content
spends. For more on measuring conversions, see Chapter 8.
11.3 Video Ad Metrics
In recent years, spending on digital video ads has skyrocketed; spending on the channel increased
by 25% annually in 2019 alone:"” though it has tapered off, it remains one of the faster-growing
channels, projected to reach $45 billion by 2025." Video ads play an increasingly vital role in mar-
keters’ efforts to reach consumers, representing a significant area of marketing growth. Measuring
video ads is important to understand the return on that new investment. It requires a separate set
of metrics from video content, which we will explore in this section.
Calculating YouTube Metrics
https://www.reelnreel.com/how-to-calculate-youtube-advertising-metrics/
Views and View Rate
The first step in getting consumers on video platforms to convert is, of course, to get them to view
the ad. This makes the total number of views a critical metric. Generally, viewership is a function of
an ad's budget—brands pay for the ad to be seen, so the more they spend, the more the ad is shown.
This is true even when an ad is paid on a pay-per-click basis. To get more clicks, publishers show the
ad more times. Thus, the view rate measures mainly the amount of attention an ad received based
on its budget.
Separate from the views count is the view rate.” This measures the percentage of viewers who
watched the ad after it was shown to them, as opposed to closing the ad as soon as they could. This
can tell brands how engaging the first few seconds of an ad are or how interested consumers are in
seeing an ad from the brand. Increasingly, platforms don't allow consumers to opt out of viewing a
video ad, so the metric is less useful on platforms on which consumers are forced to view even a
portion of ads. If consumers do have the option to view an ad or not, then it can give marketers
ao ra
Source: Shutterst ock.com critical guidance on how to increase the appeal of their ads. It can also tell marketers whether they
are targeting the right audiences, if the view rate is high with one segment while lagging with
another.
309
Impressions
Impressions are the number of times a video is seen by users. An impression occurs when a video
appears on the screen of a user. It is not a view, which occurs when a user clicks to play a video
and watches it for a minimum number of seconds. Impressions measure only the appearance of
the video thumbnail with its play button on the user's screen and do not indicate that the user saw
the video for any length of time. Many impressions are a brief appearance on-screen as a user is
scrolling, looking for other content.
On its own, impressions provide a very approximate metric of how many consumers were
potentially exposed to a brand's video online. However, many impressions are measured by detect-
ing that a video has been served to a user's browser. It is possible, due to technical issues, that an
impression was not seen by the user; the video was served, but the user's browser was closed before
they scrolled far enough to see it, for example. Thus, with today's measurement techniques, impres-
sions must always be regarded as an approximate measure.
me
Viewability Rate
As we learned in the previous section, not all ads that are served are actually seen by consumers. A viewability rate (VR)
range of technical issues can interfere with an ad being seen. In addition, bot traffic can traverse The percentage of
the web: bots can trigger ad delivery without any human seeing the actual ad.” To address the con- impressions of a video ad
cern that many ads are not seen by their target audience, or indeed, any person, advertising that were viewable by
users.
industry groups have introduced the viewability rate (VR) metric. This metric measures the per-
centage of impressions that consisted of the ad in question being on-screen for at least one second,
and with at least 50% of the ad visible on the screen at that time.“ The VR measures the efficacy
of an ad platform in ensuring that its advertisers receive the exposure for which they paid. Adver-
tisers look to the VR to determine how much of their advertising spend resulted in brand exposure,
as well as the potential to earn clicks, by having their ads appear clearly on users screens.
Click-Through Rate
The click-through rate (CTR) on video ads is, as with other advertising, is the measure of how many
users clicked on an ad to visit an advertiser's link. Historically, video ads have higher CTRs than
display or social media advertising." In comparing CTRs of video ads to other ad campaigns on
different channels, it is important to compare conversions and sales, as well. A video ad may have
higher CTRs than a company’s search campaigns because it is more engaging; however, the PPC
campaign may have higher ROI because it reaches a more targeted audience that is closer to mak-
ing a purchase. Regardless, video advertising remains an attractive channel for brands because of
its high CTRs, which average 0.18%," in contrast with 0.02-0.07% for display ads."”
Conversion Rate
Conversion rate for video ads is the same metric as it is for other forms of advertising: It is the per-
centage of viewers who took a desirable action after seeing the ad. As with all conversions, it is up
to the marketing team to decide how to define conversion: It can be an email signup, a purchase,
or other start to a longer-term relationship with a brand. How to define conversions depends on
the channel on which the ad appeared. Video ads appearing on social media do not always drive
sales. Instead, it may be more realistic to aim for micro-conversions, such as following the brand
on social media or filling out a contact form to learn more about an offer. Sales conversions are
more likely from social media video advertising when the advertised product is an impulse pur-
chase, such as a low-cost consumer product, or for a free trial. Video ads placed on well-selected
YouTube videos may have higher conversions, for example, ads for project management software
that appear before instructional videos educating project managers. Even with targeted B2B place-
ments, however, it is often more realistic to set micro-conversions as a KPI, given the low sales
conversion rates of most advertising.
Let's go back to the example of Sally's subscription box. She produces a ten-second video ad
with skincare regime tips for outdoors enthusiasts, targeting consumers with an interest in skiing,
hiking, and snowboarding. She includes a link at the end to sign up for her tips on skincare during
outdoor sports. Twelve percent of viewers sign up for the tips. This micro-conversion brings con-
sumers onto Sally's email list. Eventually, most consumers who signed up for the list from her video
ad convert after two emails, purchasing an average of $130 worth of products on their first shop-
ping trip. This successful ad uses a micro-conversion to start a relationship with consumers that
eventually pays off.
Earned Actions
earned actions
Earned actions are subsequent actions taken by viewers of a video ad. For example, let's go back to
SoapBox. Sally's channel is now attracting subscribers, thousands of views a month, and great com-
Subsequent actions taken
by viewers of a video ad. ments. Sally decides to run a video ad, featuring a fun demo of Sally making soap, accompanied by
her cat, Suds. The ad earns only modest conversions, with about 4% of those seeing the ad clicking
through to make a purchase. However, the ads are a success in other ways. Those who see the ads
flock to Sally's YouTube channel to see more demos, not to mention more of Suds the cat. Over
10,000 viewers who were exposed to the fifteen-second “Suds Helps Sally” ad subscribed to Sally's
channel, 3,000 commented on her other videos on her channel, and 1,900 shared her videos. All of
these actions are earned actions—actions taken on YouTube to engage with a brand by users who
have seen a brand's video advertising. Note that earned actions are not engagements with the ads
311
themselves; instead, they are actions with organic (non-ad) channel contents or
with the channel
itself that are inspired by seeing an ad. Earned actions are desirable in themselves, since
they build
brand awareness, as well as lead to conversions, if they are actions on a conversion path (for
more
on conversion paths, see Chapter 9). In addition, the earned actions metric measures the impact on
brand awareness, reach, and sentiment of an advertising campaign. Thus, it provides a fuller pic-
ture of an ad's ROI than direct conversion metrics, views, or CTRs alone.
Cost per View

The cost per view (CPV) measures the amount each view of an ad cost. Since views impact brand
cost per view (CPV)
awareness more directly than they do conversions, tracking cost per view is important in managing
The amount each view of
the expenses related to branding efforts. When advertisers place video ads, they have several
an ad cost.
options for what they want to prioritize, bidding on specific metrics accordingly. In other words,
video advertisers can pay for ad space by saying they will pay a certain amount (bidding) every time
a user clicks on the ad, every time a user views an ad, or for a certain number of impressions.
When it comes to YouTube and other video platforms’ advertising, cost per view is somewhat
of a misnomer. YouTube, in 2021, defines a view as a consumer watching a video for
¢ the duration of the video or thirty seconds, whichever comes first or
¢ a click or direct interaction with the video’s content, or with display ads from the same cam-
paign being shown on the same screen as the video ad.
Thus, CPV does not strictly measure the price advertisers pay for a view, but
for views of a lengthy duration, plus interactions with ad content that occur dur-
ing a view. While paying for only longer views, along with interactions, is cost-
effective for advertisers, it complicates the metrics of CPV. When using CPV to
measure marketing spending, it's important to think of it as budgeting metric
and a bidding mechanism rather than a measure of consumer interest. It is the
amount an advertiser is spending on meaningful interactions with their video ad
content. As such, the amount an advertiser is willing to spend per YouTube-
defined “view” can be adjusted up or down, based on the ROI they detect from
advertising programs, as measured by more direct metrics of ROI, such as click-
through rates, conversions, and average purchases per video ad-acquired
shopper.
11.4 A Closer Look: Forget the Stage

Fright— Go Live
Billie Jones runs a record store, Vintage Vinyl and More. She's been wondering how to drive traffic
to her online store, where she sells rare vinyl records, vintage band T-shirts, and other memorabilia.
She has a YouTube channel, which features interviews with musicians, DJ appearances, and behind-
the-scenes videos of the store. She is also considering running a video ad, focused on targeting
gigs,”
serious collectors. “My goal is to make more sales, but also to build up a fan base for my DJing
rtable
she explains to her friend, Jas Singh, who is a successful food vlogger. “I'm not super-comfo
in advance to be sure they'll be popular. How do I know
on camera, so I try to plan all my videos
which ones are really driving sales?”
“Well,” says Jas, “first off, you need to own it. Your videos are awesome—but I agree, some videos
do better in driving traffic than others. And sometimes, the videos that get a lot of views are not
the ones that get you the most sales. Remember that promotion I did with that sauce brand? The
video I did on new ways to dress up breakfast got two million views, while the less-popular video
on dorm room dinners sold over $40,000 in Maple Sriracha. So, you're right to take a look at your
metrics. What videos are getting the most click-throughs to your store?”
“Honestly, it's the DJ guest spots,” says Billie. “They bring people to the store website by the
thousands.”
“And are they buying or booking you to spin?” asks Jas.
“Not really,” Billie admits. “What does are the behind-the-scenes videos. I always get bookings
when we post those. But I'm so self-conscious!”
“The data doesn't lie!” says Jas. Billie looks at her questioningly but decides the next weekend
to do a Facebook Live video from a festival where she's appearing. The results are strong: The video
garners 28,000 views in two days, with 8,000 people tuning in live. The livestream and recording
video also attracts 250 comments, all of which are positive. Importantly, although the video itself
does not have the ability to drive click-throughs, visits to the site increase by 30% with Facebook
traffic accounting for most of that growth. The result is a summer of full bookings for Billie as well
as $32,000 in e-commerce sales in comparison to $14,000 the same time the prior year.
“That was scary at first,” Billie says. “But youre right, the numbers don't lie. Looking at my met-
rics helped me focus my efforts on the videos that bring in the most new business. Now, if only I
can stop having stage fright!”
11.5 Mobile App Metrics
Across the board, companies are launching mobile apps to deliver business results. The app stores
of Google and Apple have more than two million apps available." While many apps are standalone
products, built to fulfill purposes from health to entertainment, thousands of apps focus on achiev-
ing companies’ marketing goals. Such apps are called branded apps; they are built by brands that
are not primarily in the app-building business as part of their marketing programs. These apps
are another channel for brands to market their goods and services, either directly, through in-
app purchases, or through promotions pushed to consumers via the app. Thus, branded apps are
both a promotional channel as well as a placement mechanism, representing two of the 4Ps for a
brand. As a marketing channel, mobile apps have experienced mixed results, showing early promise
before becoming another channel in the marketing promotions mix, effective when deployed with
focused KPIs. Measuring the effectiveness of branded apps as a channel presents opportunities for
marketers to understand this dynamic channel, while tracking the ROI of this major promotional
and distribution channel. In this section, we will focus primarily on marketing metrics originating
from, or related to, the use of branded apps.
313
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Mobile App KPIs in Context

When tracking mobile app KPIs, it's important for brands to keep in mind the purpose of the app
itself. This purpose will dictate which KPIs measure an app’s success.
Brands build apps for a range of reasons. In some cases, the app itself is a product, as is the
case with B2B software companies that release a light mobile version of their desktop platforms.
Gaming apps, too, are products rather than marketing vehicles, though some are both.
Some e-commerce or brand apps are monetized via direct conversions: consumers make pur-
chases within the app. Revenues from the app are generated primarily from direct purchases. By
contrast, brick-and-mortar companies often build loyalty apps; these apps offer discounts, loyalty
points that can be redeemed for special offers, and engagement via content. The ROI of such apps
is often that it drives additional purchases. However, revenue is not generated from sales via the
app. Finally, some B2B brands and many B2C organizations build apps for content. They provide
gamification, resources, or other “infotainment” to consumers. The intent for these apps is to build
brand affinity, awareness, and recognition. Loyalty or direct sales may occasionally be integrated.
However, such apps are mainly a content marketing vehicle.
KPIs for each type of app vary significantly. In-app purchases, for instance, are a main driver of
gaming app revenues. However, an educational app designed to engage a brand's consumers with-
out selling to them directly may not offer any in-app purchasing options. Similarly, as we will learn,
apps meant for frequent usage, such as social media platforms, track success by the number of
times users log in during the day. By contrast, a shopping app for a specialty product is unlikely
to see multiple logins even in a single week. Knowing your app, knowing the consumer needs it
addresses, and understanding industry app usage norms are critical for understanding app KPIs.
In this section, we will discuss a full range of metrics applicable to various types of apps. When
marketing teams use data to set strategy, they may measure some or most of these, depending on
their apps purpose. Using judgment is key to ensure clarity in app success measurement. We will
explore the appropriate metrics for different goals, as well as learning how to apply the metrics to
making both marketing and app-making decisions.
Basic Mobile App Metrics
Metrics for measuring mobile app performance, like those for many marketing channels, include
those commonly used, as well as those that are more advanced. Basic metrics tell us how many
users are engaged with our apps each day, how long they keep our app installed on their devices
(a key measure of loyalty), and what purchases they make that involve the app. We'll start this sec-
tion by exploring these key metrics, which can tell us a wealth of information on the health of our
apps. Advanced metrics tell us more nuanced details, such as how long users go without using the
app before logging in again, how frequently users engage with our apps, and how their locations,
psychographics, and demographics shape their usage. Finally, certain limited technical data, though
mainly important to app developers, can tell marketers important facts, such as whether glitches
are impacting usage. This can tell marketers whether an app’s content itself is the driver of perfor-
mance on the other metrics, or whether it needs to be optimized for better technical performance.
Daily and Monthly Active Users
The popularity of a mobile app is measured in how many active users it has. An active user is one
who has logged in within a given time frame, engaging in some action. Brands can set a higher
threshold to define an active user, depending on the features of their app. For instance, let’s imagine
a loyalty app for a sandwich chain, Joe's Deli. If a user simply logs in but does not collect points for a
purchase, view offers, or consume content, but instead, simply views the home screen for a few sec-
onds, the brand may not define such a user as active. In this way, only those users who truly engage
with the app for its intended purpose counts as active users for analytics. Other brands may define
any login as an active user or set the threshold for activity as being logged in for thirty seconds.
daily active users Active users are measured by the day and month. Average daily active users (DAU) are the
(DAU) average number of active users, as defined by the marketing team, on any day in a given time
The average number of period. Monthly active users (MAU) are the total number of active users in a month. This number
mobile app users active may fluctuate with time. For instance, an advertising campaign designed to gain new signups may
each day.
increase the number of MAUs. Thus, both DAUs and MAUs should be measured as trending data,
monthly active users looking for increases or decreases in response to promotional efforts, attrition, or feature changes.
(MAU)
The average number of
mobile app users active in Retention Rate
each month.
retention rate Retention rate is the percentage of users who remain active for a given time. For instance, if 90%
of users who download an app still have the app on their devices after thirty days, an app's thirty-
The percentage of users
who remain active for a day retention rate is 90%. To calculate retention rate, marketers divide the number of MAUs of an
given time. app during a specific timeframe by the number of app installations over that same time frame. For
example, let's return to Joe's Deli’s loyalty app. In September, 10,000 customers installed their app.
At the end of the month, 8,000 of those users who installed the app for the first time in September
were still using it. For the month, the app thus had an 80% retention rate. This method is also
known as measuring the cohort retention rate, as it measures the retention of a specific cohort of
users, all of whom were onboarded in the same time period."
A useful historical metric is the aggregate retention rate. This tracks the total retention rate of
the app from the moment it was launched. Aggregate retention rate is calculated by dividing the
current number of monthly active users by the total number of app installations. Overall, four mil-
lion customers have downloaded the app. In September, it had 500,000 MAUs. This means it has an
aggregate retention rate of 12.5%.
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Aggregate retention rates are typically lower than cohort retention rates,
becoming lower and
lower the longer an app has been available. This is because app attrition is typically very
high; users
uninstall 28% of apps after using them for thirty days.”
Length of Session and Number of Actions
Although some apps require only a brief login, such as an app to redeem loyalty points, most apps
offer opportunities for a range of experiences. For apps that have more complex user interfaces
than a simple redemption code, the time spent in the app is a critical measure of engagement.
In addition, the number of actions taken, including screens viewed, can also indicate strong user
engagement.
It's important to measure time in the app in proportion to the most likely user actions. If users QR (quick response)
with the highest CLV tend to just redeem their coupons using the in-app QR (quick response) code,
A graphic pattern that can
measuring the impact of lengthier sessions may not be useful. In contrast, if customer loyalty is be scanned with a phone
closely tied to app usage, it's a more valuable metric. It all depends on the way users use the app. to take some action.
Churn Rate
Related to retention rate is the churn rate. Churn rate takes into account new users installing an
churn rate
app just as older users are uninstalling it. This contrasts with the retention rate, which measures
The speed of turnover
only the overall percentage of users who remain with an app versus those who uninstall. The churn among app users.
rates expresses the speed at which users cycle through using the app to uninstalling or becoming
inactive. Churn rate is calculated by dividing the number of users lost by the end of a time period
by the number of total users at the end of the period:
Users lost during time period/Users at end of time period = churn rate
Here's an example: Joe's Deli had 500,000 active users on October 1. By October 31, they had 600,000
active users, but they actually signed up 150,000 new users, while losing 50,000 older users, resulting
in a net gain of 100,000 users. Dividing 50,000, the number of users lost in a month, by 600,000, the
number of users left at the end of the same month, yields a churn rate of 8.33%:
50, 000/600, 000 = 0.083333
Although calculating churn rate is simple, defining the numbers used is more complex. For exam-
ple, a brand can define a “lost” user, for purposes of churn, as one who has uninstalled the app. How-
ever, they can also define “lost” users as those who have become inactive but have not uninstalled.
In this case, the marketing team must also define how they define “active” users. As discussed in
our section on DAUs and MAUs, are they those who used certain core features of the app, or those
who logged in for a given amount of time? In general, brands should define “active users’ the same
way across all metrics, using the defined metric for MAUs to calculate churn. In most cases, using
the DAU number in churn calculations will artificially depress the number of current users; recall
that MAU is typically a higher number than DAU. In addition, churn is best measured monthly or
weekly, not on a daily basis, as it measures user turnover over time.
If an app is gaining many downloads, but losing users at a nearly equal rate, then it is not
retaining users and is unlikely to meet a brand's long-term KPIs, be they gross/net sales, share of
wallet, or even awareness. It is important for companies using branded apps to monitor churn at
least monthly. For brands whose product is an app itself, measuring churn weekly is justified. In
such cases, using weekly active users (WAU) in calculations provides the most accurate measure-
a
ment. App churn is at least as important a metric of app performance as DAU and MAU. Churn is
critical metric for understanding how effectively an app is meeting its goals.
Conversion Rate Data
We have learned much about conversion rates in this text already, in a range of contexts, with its
special implications within each context. For branded mobile apps, conversion rates present many
measurement challenges and opportunities. Recall that for many branded apps, direct sales are not
the goal of the tool. Instead, brands launch apps to encourage revenue in other channels, such as
by growing brick-and-mortar sales.
It's important that an app contributes to revenue; those contributions to revenue are often
more diffuse and longer-term than quarterly sales may indicate. Measuring app conversions
involves a wider range of standard metrics than, for instance, measuring website conversions,
because app conversions can occur in a very wide range of formats, from in-app purchases to visits
to a brick-and-mortar store. Thus, it takes expertise to measure app conversions effectively. In this
section of the chapter, well learn how to measure this complex metric for real results.
In-App Conversions
Sometimes, our most engaged consumers take action directly within an app. They may make a pur-
in-app conversions
chase, or they may redeem a coupon using their phones. These in-app purchase behaviors are our
Conversions that occur
within an app itself.
in-app conversions. For commerce brands, they come in two broad varieties: direct in-app
purchases and in-app offer redemptions. These are both critical metrics for brands that offer
in-app purchases these kinds of conversions. We'll explore them here.
Purchases and offer
redemptions that take
place inside an app. In-App Purchases
in-app offer For apps that offer the option to purchase in-app, measuring the gross value of in-app purchases is
redemptions a critical metric. It's often worthwhile to compare the value of in-app purchases with the value of
Offer redemptions that purchases made on other channels, as well as looking at their frequency and the specific items pur-
take place inside an app or
chased in the app in contrast with those on other channels. It is also important that marketers
using an app, such as
using a scannable code track the overall purchasing behavior of app users in comparison to non-app-using customers.
inside an app.
Let's go back to our friends at SoapBox, whom we met when we learned about video metrics.
With the success of its monthly subscription model, its founder, Sally Davis, has decided to launch
a wellness app, CleanStyle. It features daily motivation, plant-based skincare tips, and a monthly
Q&A with a dermatologist. Within the app, customers can purchase soaps. Comparing the total
shopping cart value of in-app purchasers with those buying on the SoapBox website, Sally finds
that in-app purchases are 12% lower than those made on the company’s e-commerce site. However,
in-app shoppers buy on average three times a month, and they often make at least one of their pur-
chases on the e-commerce site, where their purchases are larger. Sally concludes that in-app
shopping contributes to SoapBox revenues, both by encouraging additional small purchases that
customers would otherwise not make and by building the brand's relationship with their most
loyal shoppers.
Interestingly, SoapBox also finds that in-app purchases are of different types of products than
those bought online or in stores. Online, most shoppers buy multiple packages, each with three
soaps, while in stores, they tend to purchase individual bars. In the app, by contrast, they purchase
three-soap packs, but they buy them one at a time, not multiple packages. This may indicate that
the three-soap package is an attractive impulse buy for virtual shoppers, affecting merchandising
and packaging decisions. Sally decides to try out an in-store display stand showcasing the three-
soap packs, with attractive signage and a slogan encouraging buyers to treat themselves to the
mid-priced product. Within three months, in-store sales of the three-soap packs have grown 120%,
with online sales increasing 80%. By leveraging in-app purchase data, SoapBox not only tracked the
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contribution of their app to overall revenue, but it also gained useful insights for refining
its place-
ment, product, and promotions strategies.
In-App Offer Redemptions
Many brick-and-mortar stores offer limited e-commerce opportunities, especially when it comes to
their apps. Instead, they use apps to drive visits to their stores. They typically do so with some com- upselling and cross-
selling behaviors
bination of content marketing and promotions available within the app. For instance, they may
Promoting additional
offer coupons, exclusive gifts, and loyalty point redemptions. Consumers convert by making in-
products or services to a
store purchases, using their app to scan at the register and redeem a coupon or points. In this case, consumer. If the product
it's more useful to measure in-app offer redemptions. Neither is exclusive—many stores offer both, or service is of a better
quality, larger, or more
in which case, it's useful to compare the rate of in-app purchases in contrast with in-app redemp-
costly than the original
tions. This can tell marketers whether consumers prefer to shop in-store or through the app, as well purchase, the action is
as whether the two channels can work synergistically to drive upselling and cross-selling called upselling. If the
product or service
behaviors.
promoted complements
When looking at in-app purchases and redemptions, it's important to focus the original purchase, the
action is called
on the bigger picture. Direct conversions to purchase are often held as the main cross-selling.
metric of a retail apps ROI. However, as we see with the SoapBox story, in-app
purchases often form part of a greater ROI in terms of higher customer loyalty
and thus lifetime customer value, as well as providing insights into different tar-
get segments product preferences. As such, the in-app purchase gross total is
only one way to leverage in-app purchasing data for marketing. It’s more produc-
tive to look at assisted conversions in conjunction with in-app purchases or
redemptions, as well as viewing the longer-term data on mobile apps, such as the
CLV of app users.
Direct Versus Assisted Conversions
We learned earlier in this section that conversions are a key metric. However, this metric is partic-
ularly challenging to measure. Apps are not the only way in which consumers of brick-and-mortar
stores can convert, for instance. A user may see a promotion for a product in their loyalty app, go
into a store, and end up purchasing another product entirely. While the app prompted their visit to
the store, the retailer cannot directly trace their eventual purchase to what they viewed in the app,
or can they? Using the principle of assisted conversions, we often can.
Using point-of-sale (POS) and location data, brands with seamless integration between their
app, POS, and other consumer data can track whether an app user subsequently entered a store to
make a purchase. They can thus connect in-app actions with in-store purchases, even if the pur-
chases involve different products than those promoted in the app.
CLV of App Versus Non-App Users in Retail
As we learned in the SoapBox example, mobile app shoppers may have different buying patterns
than those shopping in-store or desktop-only. Customers who install a mobile app may be demon-
strating greater loyalty to a brand than those who opt not to install; consumers place great value
on mobile device memory space and exercise caution when installing apps.” Thus, if a consumer
chooses to install an app, they may already be disposed to shop often with a brand, finding the dis-
counts within the app attractive because they will use them more often than the average, more
to note
casual customer. Thus, when measuring CLV of app versus non-app users, it’s important
brand
that app usage alone does not cause brand loyalty. Instead, it may be an indicator of existing
loyalty.
With that caution in mind, it's useful to measure the CLV of customers who have downloaded
a brand's app in contrast with that of those who did not. More interesting is to track growth of CLV
after app download. App usage is often intended to produce a “virtuous cycle’ in which customers,
already inclined to be brand-loyal by virtue of being willing to download a brand's app, become even
more loyal, encouraged by frequent engagement, offer redemption, and identification with brand
values through the mobile app. Thus, it's important to not only measure CLV of app users in aggre-
gate, but also to track its growth over time. More powerfully, tracking the specific in-app actions
that grow CLV on a customer-by-customer basis can provide data useful for accurate segmentation,
deeper customer insights, and feed personalization efforts that, in turn, further grow CLV.
Let's return to the example of SoapBox. With growing sales data, Sally finds that her app users
are distinct from her other customers in more ways than simply their purchase behaviors. She
finds that these users also spend more per order than those who don't use the app. That may be
because the app is encouraging loyalty or because loyal customers are more likely to use the app.
What really tells Sally that the app is driving loyalty is the trend in CLV of users who download
the app. Before using the app, customers average a CLV of $800. After downloading it, users who
previously had average CLV increase their CLV to $980. Controlling for the time they have been cus-
tomers, demographics, and other factors, Sally finds a strong correlation between app usage and
higher CLV.
Advanced App Metrics

We've learned a lot about basic app metrics that paint a big picture of an apps ROI. In this section,
we will explore in depth those metrics that tell a fuller story of how well an app is engaging its
intended audience. We'll close out the section with a brief overview of technical metrics that indi-
cate the health of an app. Just like web analytics metrics that track websites’ speed and other
technical factors, it's important for marketers to have a knowledge of technical measures of app
performance. In this section, well close by learning about those technical metrics, as well. Now, let's
begin.
Engagements per User
Measuring engagement on the user level in aggregate can reveal how engaging an app is to its cur-
rent user base. That information can help developers understand whether an app is succeeding as
a product or a marketing channel. For a brand using an app as a marketing channel, engagement
is a key sign that the app is a worthwhile investment for the brand, as it is driving consumers to a
deeper relationship with the brand. This makes this type of data important to measure. This sec-
tion will explore engagement metrics in more detail.
Daily Sessions per DAU
While retaining daily active users is important, so, too, is ensuring that they use an app frequently.
Think about how often you use your favorite apps: Do you log in once a day? Use it several times a
day? Or do you log in just once a week, or even less? When it comes to retaining users, those who
use an app in their daily lives show the most interest in an app; thus, they are more likely to remain
active users. Measuring daily sessions per DAU is a good way to measure app engagement.
Again, it is important to keep in mind an apps purpose and KPIs before measuring DAUs. For
many brands, daily sessions per DAU simply do not exist; thus, they cannot be measured at all. A
gaming app would be expected to have daily users who log in for several sessions, playing the game
at different times throughout the day. So, too, would a consumer app, such as one that tracks cus-
319
tomers fitness or user's budgets. However, it would be unusual fora loyalty app for a specialty store
to have daily usage, let alone several sessions per DAU. For example, let's say you run the marketing
for an accessories brand. Your loyalty app can only be used in-store to collect points for purchases,
see special offers, and use an augmented reality dressing room to try out different accessories with
your favorite outfits. However much you want customers to be loyal, it would not be healthy for
them to be buying new fashion accessories several times a day! In this way, you will find daily ses-
sions per DAU to be less relevant to measuring your app’s success.
Session Intervals
The amount of time between a user's engagement with an app is called the session interval. We
have learned that many users log in less often than once a day, especially for loyalty apps that are
best utilized in-store. The meaning of the session interval metric depends on the purpose of an app.
An app designed to be used primarily in-store for a retailer with specialty products can have
longer session intervals than a gaming app. When interpreting session interval data, ask: How often
should a loyal user need this app? If the app is for entertainment, do we want users logging in daily?
Several times a day?
Often, with marketing data, we encounter questions of ethics. Such questions often center on
consumer privacy and how much data is reasonable to use related to consumer actions. However,
metrics can also present other ethical implications, and the session interval metric is one such data
type. If an app encourages addictive behavior, with users logging in for multiple sessions a day, with
intervals of only a few hours, can the app be considered a success? Encouraging shorter session
intervals by engineering addiction-building behaviors into an app raises ethical questions; thus,
using shorter session intervals as a KPI of app success can be problematic.
Instead, marketers should triangulate session interval data with user experience inputs, such
as customer interviews and usability testing. Determining what successful app usage looks like,
from both the brand's and the user's perspective, is the first step in setting session interval changes
as a KPI. For some brands, lengthening the time between sessions may be a sign of successful
implementation. For instance, a customer-service app may only see usage when customers experi-
ence problems, so longer session intervals would indicate fewer customer service calls. Once KPIs
of healthy yet loyal usage of the app are set, the ideal session interval can be determined from his-
torical data or user observation. Measuring against this benchmark of ideal intervals makes the
session interval metric meaningful, useful, and effective.
Technical Performance Metrics
Several technical performance metrics are available to track an app’s user experience. While this
discussion will not be exhaustive, let's look at some of the core measurements that track whether
an app, on a technical level, is providing users with the enjoyable experience they expect.
Average response time is the app correlative to a website's page speed measurement. It is the average response
time
number of seconds it takes for an app to respond, on average, to user input. It typically is measured
in fractions of a second. For instance, if you click “Buy” to make a purchase in a retail app, you will
The app correlative to a
, website’s page speed
feel satisfied if your order is placed in a second or less. If the app lags, spinning its indicator wheel, measurement. It is the
you may become less satisfied. number of seconds it
takes for an app to
respond, on average, to
user input.
Among technical performance metrics is the Apdex score.~! This measures the proportion of
Apdex score
app experiences that are satisfied, tolerating, or frustrated user experiences, as measured by the
Measures the proportion
of app experiences that
app response time. A satisfied experience is one in which the response time is T, the ideal response
are satisfied, tolerating, or time determined by a brand—this is a somewhat subjective decision a brand must make based on
frustrated user the estimated needs of users. It is typically set at 0.5 seconds; a tolerating user experience is one
experiences, as measured
in which the response time is over T, yet lower than four times T. Therefore, a typical T of 0.5, 4 « T
by the app response time.
would be 2; thus a tolerating Apdex score would be any response time between 0.51 and 1.99 seconds.
Finally, a frustrating experience is one that is four times T or higher. In our example, it would be
any response time of 2 seconds or more. Why does Apdex score, a technical metric, matter to mar-
keters? Users tend to uninstall apps with poor Apdex scores. This means that, from a user
engagement standpoint, the first order of business is to ensure a satisfactory Apdex score for users.
crash rate The crash rate is another key technical metric. This is the number of times the app crashes, or
The number of times the closes itself, fails to respond, or otherwise stops functioning for the user. A satisfactory app should
app crashes, or closes seldom crash.
itself, fails to respond, or
otherwise stops Monitoring technical aspects of app performance is usually the responsibility of the develop-
functioning for the user. ment team. Marketers should request periodic updates on how well an app is performing in order
to develop a complete picture of the consumer experience while addressing any user experience
challenges with the development team.
Demographic, Psychographic, and Usage Pattern Data
As with websites, tracking the geographic location and devices of users, as well as the times of day
for peak usage, can provide key data. In addition, app tracking using tools such as Google Analytics
can provide similar demographic and psychographic information as is available for website users.
All of this data can help brands better understand customers, target their apps better, and engage
with users. Knowing the geographic location of users of a loyalty app, for instance, can provide
valuable guidance on where new stores should be built, or to predict the product needs of users
that are geographically influenced.
For instance, picture a general retailer, ShopValue, that uses a loyalty app to distribute offers.
The company tracks not only overall app usage but also the specific offers redeemed by customer
demographics. Their most active home and garden shoppers are those who live within twenty-five
miles of a store, but especially those who live in small cities. They tend to make frequent, small
purchases, likely because they have smaller gardens than the chain's suburban shoppers. Based on
the data, the retailer pilots smaller urban stores with large home and garden sections visible from
the street. Within two years, the small-footprint, GardenValue stores are accounting for 15% of the
firm's overall growth. Looking at app metrics allowed them to find a winning retail expansion strat-
egy.
11.6 A Closer Look: Do We Want to

Keep Them Entertained or Loyal?
FestFind is a mobile music-, food-, and fan-festival booking platform. They help people interested
in any style of music, any type of food, or any fandom find the next event they may wish to attend,
book it with friends, and make travel arrangements. Launched in 2020, the app gained traction with
food-festival attendees who attended locally. This presented a revenue challenge for the team, led
by Michael Wu. “Our revenue model is based on a percentage of ticket and travel sales. When a
321
festival-goer books an expensive trip, we make 3% of a large

travel booking. But were not seeing
that—instead, we are getting a lot of $20 food-truck festival tickets,
and that's not driving revenue.”
Face The Music Let The Music Speak
Jane Stith, his CMO, agrees. “What we need is to increase our average CLV from $40 to closer to
$400. That's a tall order! We would need an investment in more advertising, including more video.”
“Wait a minute,” says app designer Tim Clementine. “What if we instead tried to increase our
average MAU, so that we have more users spending money? That way, we could make up our rev-
enue shortfall with more small sales.”
“It's worth a try,” agrees Michael. Jane and Tim agree on a plan to increase monthly active users
by 300% to grow the app’s revenue. To do that, they need to increase the app's engagement.
“What if we do a promotion to keep users in the app longer, like adding a game where they
answer band-trivia quizzes?” suggests Tim.
“That could work,” agrees Jane. “What if we encourage them to keep logging in more often,
though? The more they use the app, the more they will be likely to recommend it to a friend.”
Since it takes the team time to build app features, they decide to try one strategy first: keeping gamification
app users logging in more often with gamification (adding game elements) such as rewarding Adding game elements,
points every time a user logs in to use the app. such as rewarding points,
to an experience.
Within two months, they see a modest increase in DAU with shorter time between sessions,
but no real increase in MAU, meaning that the app is getting more logins, yet not adding new users
over the month. They decide to add the trivia quiz to keep users in the app longer. This adds some
MAU, but not the 300% growth needed. From the data, it appears both strategies won, in part. Per-
haps both were needed?
They then decide to integrate more features that both entertain users, such as competitive
trivia, as well as incentives for logging in frequently. Within a month, retention rates, a key metric
of loyalty, are up, as are monthly active users. Within a year, the app has more than 50,000 users,
putting it on the path to profitability. “Keeping users in the app longer, and logging in more often,
helped save the company! We needed to keep them entertained to keep them loyal,” notes Michael.
“It looks like the data-drive approach was the right one.”
11.7 Do the Math: Measuring Net

Engagement Growth
In both sections of this chapter, we explored the importance of user engagement. Engagement can
mean different things in different contexts. When it comes to apps, we have seen that it can be the
amount of time a user spends in an app, the length of time they watch a video ad, or whether they
like or share content on a YouTube channel. Engagement platforms often have a range of complex
metrics to measure engagement which, when looked at separately, can be confusing.
weighted total Measuring weighted total engagement is a way to consolidate and normalize different mea-
engagement sures of engagement. With this method, marketers first weight each type of engagement for its
Engagement weighted by relative importance. A baseline engagement type is set and given a weight of 1. This is the “medium”
the relative importance of level of engagement, which is stronger than the weakest forms, yet not the most intensive level of
each engagement action.
engagement for a brand. For instance, a like may be given a weight of 0.5, a complete view a weight
of 1, and a comment a weight of 1.5. This can be partially subjective; however, it is grounded in his-
torical data. The baseline engagement type should be the type that is most often associated with
ROI and also represents the lowest intensity of engagement that is closely associated with ROI. A
brand may find, for example, that they generate the most sales from videos with a high rate of com-
ments and completed views; however, comments are rare, and completed views are three times as
common.
linear regression They may also find that ROI is not closely correlated with how many likes a video receives. A
A type of statistical linear regression, a type of statistical analysis that tracks how closely two phenomena grow
analysis that tracks how together, or correlate, can map the correlation between specific engagement actions and ROI. That
closely two phenomena can help establish the engagement metric that will be weighted as 1, as well as those that will
grow together, or
correlate. receive fractional weights because of their lesser correlation with ROI. Those engagement types
that are rarer, and associated with very high ROI, will be weighted higher than 1.
With these weightings, brands can measure each type of engagement in proportion to its effect
on ROI. For instance, let's return one last time to Sally. Her latest video series showcases fall fra-
grance ideas for your home. Past data shows a positive correlation between complete views and
ROI, yet complete views are a common engagement. Complete views are thus weighted 1. Com-
ments are also common on Sally's channel, so they, too, are weighted 1. Likes are weighted 0.25,
because her videos get many likes even with no resulting sales. Shares and click-throughs are rare
and highly associated with ROI, so the team opts to weight them at 1.75. The videos received a total
of 8,000 likes, 3,000 complete views, 2,100 comments, 145 shares, and 100 click-throughs. Weighting
the engagements by their importance to ROI, the team calculates this weighted total engagement
figure:
8, 000(0.25) + 3, 000(1) + 2, 100(1) + 145(1.75) + 100(1.75) =

2,000 + 3,000 + 2, 100 + 253.75 + 175 = 7, 528.75 total weighted engagement
This metric makes it easier to track the growth in engagement over time, if the types of engage-
ment vary over a time period. For instance, let's say the next video series Sally produces garners
many more shares, but far fewer likes. With weighted total engagement, the SoapBox team can
compare the engagement rates of each video in a consistent way.
The same principle can apply to mobile apps. For instance, the FestFind team can apply weight-
ing to their key metrics of time spent in app, session intervals, and screens viewed. Weighting for
session intervals of thirty days can be 1, if that is the normal session interval for a loyal but not
frequent user, with session intervals over thirty days weighted at 0.5 and those under thirty at 1.5.
These metrics, again, are partially subjective but should be grounded in the correlation between
past engagement measures and app ROI. Ina month where they have 300 users who logged in after
Chapter 11 The Engagement Economy 323
thirty days, 100 who logged in after more than thirty days, and 50 who logged in after less than
thirty, their total engagement, excluding time spend in the app, is:
300(1) + 100(0.5) + 50(1.5) =

300 + 50 + 75 = 425
This is a simplified model. In app analytics, time spent in the app interacts closely with session
intervals, so the team can also weight time spent in the app. They can weight time under five min-
utes spent in the app at 0.5, over five but under seven minutes at 1, and over seven minutes at 1.25.
They can thus further refine how the weight engagement in sessions. For instance, a session that
occurs after less than thirty days, and thus is weighted at 1.5 normally, may only be weighted at 1
if clocks in at under five minutes. This can become complex, but it can provide greater confidence
in engagement metrics. Applying this principle, which takes into account time spent in app as well
as session interval, we can set more refined weighting for the following engagement for the past
month:
200 sessions with session interval of 30 days and 5-7 minutes time in app = 200 (1)
100 sessions with session interval of 30 days and over 7 minutes time in app = 100 (1.25)
30 sessions with session interval of under 30 days and over 7 minutes time in app = 30 (2.75)
20 sessions with session interval of under 30 days and 5-7 minutes time in app = 20 (1.5)
80 sessions with session interval of over 30 days and 5-7 minutes time in app = 80 (0.5)
20 sessions with session interval of over 30 days and over 7 minutes time in app = 20 (1)
200 + 125 + 82.5 + 30 + 40 + 20 = 497.50
Again, these weights are determined based on marketers’ assessment of each metrics relative per-
formance as a predictor of ROI. They are subjective in that they are whole numbers or rough
percentages assigned to specific engagements based on past performance. However, if based on a
dataset with 5,000-10,000 datapoints, the weights are highly predictive of engagement’s effect on
ROI. With fewer datapoints, intelligent guesstimates can still be a useful weighting metric.
Importantly, this weighting will also track engagement connected to ROI, making it a valuable
way to measure the true engagement for video or app content over time.
11.8 Conclusion
The engagement economy is the orientation of modern brands toward marketing channels that
provide a deeper, more interactive connection with consumers. Together, video marketing, includ-
ing both organic video content and video ads, as well as mobile apps, are the cornerstones of the
engagement economy. Metrics for measuring video and mobile apps thus center on measuring con-
sumer engagement. For organic video, that means tracking engagements through data points such
as total watch time, average watch time, and comments, shares, and likes. To determine which ele-
ments of video are most interesting to users, marketers also track metrics such as drop-off time,
as well as comment sentiment. YouTube, the world’s best-known video platform, allows users to
subscribe to brand channels. Thus, channel metrics such as subscriber growth, impressions, and
audience are critical to understanding a brand's success. Video advertising is measured by similar
metrics, as well as more traditional advertising metrics, such as click-through rate. Both organic
video and paid advertising are also measured in terms of the conversions they create.
Mobile apps can be standalone products, or they can be part of a customer loyalty program,
content marketing, or other brand-building initiative. For mobile apps, success typically means get-
ting consumers to return to an app often, for instance, to make purchases. Key mobile app metrics
include daily and monthly active users, engagements per user, and conversion rate. It is also critical
for brands to measure the total impact of an app on purchase behavior, including in-app purchases.
In addition, mobile loyalty app users may have a higher lifetime customer value than those who do
not use an app, which is critical for brands to understand and track.
Measuring the engagement economy tools of video and mobile apps means looking at the
totality of user engagements, sales, and loyalty across the relationship with the customer. While
the metrics may be less revenue-focused than those for other channels, with the exception of video
advertising, they nonetheless provide vital insights into consumer needs across the 4Ps.
325
11 -9 Questions for Further Study
13 What is the difference between a video's average view time and its total view time? Why is
each metric important?
. What is a video ad's view rate? How is it different from the view time of a content video?
. ls a video ad’s click-through rate (CTR) a full measure of its efficacy in driving sales? Why or
why not?
. What is the difference between impressions and the impressions click-through rate? Why do
we measure one or the other, or do we measure them both together?
. How would a brand know where their videos are being shown on YouTube? What does traf-
fic source data tell a brand when used in conjunction with other data, such as conversions
and click-through rates?
. Perkins Paper is the Midwest’s largest distributor of paper towels to restaurants, offices, and
other commercial spaces. They have created a YouTube ad targeting restaurant and office
managers, promoting their environmentally friendly line. Their cost per view is $0.22, with a
conversion rate of 3%. The average net profit resulting per order from these YouTube ad
conversions is $300. Are the ads worth continuing to run? Why or why not? Explain your
reasoning with calculations.
. Describe the limitations and benefits of YouTube’s audience data reports. How should mar-
keters, in particular, use data about subscribers?
. What is meant by the following terms: drop-off rate, completion rate, and average view time?
. Kelly’s Kittens is a cat rescue that promotes the adoption of kittens. They have a popular
YouTube channel! with videos of the cats, along with pet care tips for humans. They review
their most-popular videos. They find that their videos with pet-care tips all have a drop-off
point after 2 minutes. You are the head of a marketing agency hired to help them drive more
adoptions. What should they do to improve completion rates of their videos? What is your
recommendation?
10. What is multichannel attribution? How does it impact measurements of video?
Ads What is meant by a video’s earned actions? How do earned actions impact the overall return
on investment from a video ad?
12. What is the difference between DAU and MAU? Why would you measure MAU rather than
DAU?
13. What can a brand do if it notices that its retention rate is declining? What other mobile
metrics can point to an app’s overall performance as it impacts engagement and return on
investment? How would that data apply to increasing an app’s retention?
14. Name the two types of in-app conversions. When and how do you recommend a brand mea-
sure each one? What are some of the benefits and limitations of this metric in determining
an app’s return on investment?
$5: Naomi’s Home Improvement is an online brand that provides home repair tips, supplies, and
paid how-to classes to first-time homeowners. They have an app that provides answers to
homeowners’ repair questions. The app was installed by 50,000 people in July; during that
time frame, they had 40,000 monthly active users (MAU). What is the app’s retention rate?
16. What is the difference between an app’s churn rate and its retention rate? How do we mea-
sure both metrics?
sHe Why would you measure daily sessions per DAU? What can that metric tell a B2C brand?
What about a B2B brand?
18, Why do we measure an app’s crash rate?
19. Describe the three different types of user experience defined in the Apdex index. Why do we
measure the Apdex index?
20. Bikely is an app for dirt-biking enthusiasts that allows them to track routes, vote on favorite
biking locations, and review products. It has an average of 260,000 MAU, with time spent in
app of 2.4 minutes. The company wishes to determine whether its engagement is really low,
based on more metrics than simply the time spent in the app. You have been brought on
as a consultant to help the company improve its app engagement. What metrics would you
recommend the company examine? Why do you recommend those metrics? What actions
would you recommend Bikely take based on the metrics?
12; Pedotto, Lynn. “5 Things to Consider If Your YouTube View Rate Is Low.”
Strike Social, August 7, 2018. https://strikesocial.com/blog/5-things-to-
Endnotes consider-if-your-youtube-view-rate-is-low/.
13. Broughton, Mathew. “Bots vs. Brands — Battling Ad Fraud in the Age
of Automation.” ExchangeWire, November 18, 2019.
https://www.exchangewire.com/blog/201 9/1 1/18/bots-vs-brands-bat-
tling-ad-fraud-in-the-age-of-automation/.
14. Driskill, Justin. “Viewability Rate Definition.” The Online Advertising Guide,
. Zilli, Matt. “Voices of the Engagement Economy: Christian Nolte, VP of May 21, 2020. https://theonlineadvertisingguide.com/glossary/viewability-
Marketing & Global Business Development, Masonite International.” CMO rate/,
Nation, February 1, 2018. https://cmo.marketo.com/2018/01/18/voices- . Shukairy, Ayat. “The State of Online Video Advertising — Statistics and
engagement-economy-christian-nolte-vp-marketing-global-business- Trends.” Invesp, April 11, 2018. https://www.invespcro.com/blog/online-
development-masonite-international/. - video-advertising.
. ‘Video Advertising Spend Report 2019.” Interactive Advertising Bureau, . “Video Ad Performance Metrics, North America Performance Metrics, Esti-
April 29, 2019. https://www.iab.com/insights/ad-spend-report-201 9/. mates and Historical Data.” eMarketer, May 1, 2020. https://www.emar-
. Hayes, Adam. “What Video Marketers Should Know in 2021, According keter.com/performance/channel/58fe5 1a4d2670009840a9eea/
to Wyzowl Research.” HubSpot Blog, April 9, 2021. https://blog.hub- 58e4ee903ffSe905a0f34dbc.
spot.com/marketing/state-of-video-marketing-new-data. 17. Chaffey, Dave. “Average CTRs for Search, Display and Social [Latest
. Tankovska, H. “YouTube: Hours of Video Uploaded Every Minute 2019.” Stats and Charts].” Smart Insights, March 5, 2021. https://www.smartin-
Statista, January 26, 2021. https://www.statista.com/statistics/259477/ sights.com/internet-advertising/internet-advertising-analytics/display-
hours-of-video-uploaded-to-youtube-every-minute/. advertising-clickthrough-rates/.
. Alsam, Salman. “Facebook by the Numbers (2021): Stats, Demographics 18. Iqbal, Mansoor. “App Download and Usage Statistics (2020).” Business
& Fun Facts.” Omnicore, January 6, 2021. https://www.omnicore- of Apps, May 6, 2021. https://www.businessofapps.com/data/app-statis-
agency.com/facebook-statistics/. tics/.
. “YouTube: The 2nd Largest Search Engine (Infographic).” Mushroom Net- 19, “Retention Rate: KP] Example.” Geckoboard, 2021. https://www.geck-
works, accessed May 14, 2021. https://www.mushroomnetworks.com/ oboard.com/best-practice/kpi-examples/retention-rate/.
infographics/youtube— -the-2nd-largest-search-engine-infographic/. 20. Valdellon, Lionel. “Why App Uninstalls Aren't Forever.” Cleverfap, August
. Chi, Clifford. “YouTube Analytics: The 15 Metrics That Actually Matter.” 20, 2020. https://clevertap.com/blog/app-uninstalls-arent-forever/.
HubSpot Blog, October 26, 2020. https://blog.hubspot.com/marketing/ 21. Wilson, Madeleine. “App Download Stats Reveal Reason Behind Low
youtube-analytics.
Number of Apps Downloaded.” Zipwhip, July 18, 2019. https://www.zip-
. Khandelwal, Astha. “Learn the Art of Video Marketing for Your Business.” whip.com/blog/app-download-statistics-reveal-why-people-dont-down-
WVO Blog, May 3, 2021. https://vwo.com/blog/video-marketing-for-busi- load-apps/.
ness/ 22. Apdex Alliance, 2021. https://www.apdex.org/overview.htm.
. “Understand Your Video Reach - YouTube Help.” Google, May 14, 2021. 23. “Apdex: Measure User Satisfaction.” New Relic. Documentation, Retrieved
https://support.google.com/youtube/answer/75781 15?hl=en.
August 6, 2021. https://docs.newrelic.com/docs/apm/new-relic-apm/
10. “Video Advertising Spend Report 2019.” Interactive Advertising Bureau, apdex/apdex-measure-user-satisfaction/.
April 29, 2019. https://www.iab.com/insights/ad-spend-report-2019/.
iil “Video Advertising - Worldwide: Statista Market Forecast.” Statista, 2021.
https://www.statista.com/outlook/dmo/digital-advertising/video-advertis-
ing/worldwide#ad-spending.
CHAPTER 12
Predictive Analytics, Data
Visualizations, and
Dashboards
Learning Objectives

1. Understand the core practices of data mining and predictive analytics, including the core
statistical concepts used in data science.
2. Define key predictive analytics terms, such as supervised and unsupervised learning.
3. Differentiate between different predictive analytics models and describe the core methods of
text analytics.
4. Apply predictive analytics across the 4Ps.
5. Create effective data visualizations appropriate to a range of contexts.
Imagine if you could see into your brand's future. What would you be able to accomplish if you
could predict with greater certainty which customers on your website right now were most likely
to make a purchase? How about if your ads could appear in front of those customers who have
already browsed your competitors’ websites and reach them at the moment when they are having
second thoughts about buying from that competitor—and not a moment sooner or later? How
about knowing the right price to charge each week, based on not only last week's sales, but a range
of conditions from the economy to social media buzz? You may be aware that these actions are fully
possible today thanks to predictive analytics. What you may not know is how predictive analytics
really works. In reality, today’s predictive analytics is powered by a combination of the latest com-
puting power and mathematical methods that were invented, in some cases, over two centuries ago.
Much of what we attribute to fancy artificial intelligence (AI) technologies is little more than some
tried-and-true math, just done at scale by computers. In this chapter, well learn about the future of
marketing analytics’ frontier: data mining and predictive analytics.
Well also learn about something a lot less high-tech, but just as important: how to present data
so that stakeholders will listen. Marketing data is more complex than ever, even without predictive
analytics. Throughout this book, you have learned how to gather, create, and analyze data. In this
chapter, you will learn how to present data with visualizations that convey meaning. We will learn
about charts and tables in marketing analytics, how to create powerful infographics, and how to
craft specialized marketing data visualizations such as customer journey maps.
Finally, we will look again to the future: your future. Analytics skills are the most in-demand
skillset in marketing for the 2020s. How do you capitalize on what you have learned in this book
to grow a satisfying career? It's an exciting time to be a marketer, so let's get started learning about
the latest advances, understanding how to cap off our data work by presenting results powerfully
and making the most of our talents in the dynamic world of marketing analytics. Let's dive in.
12.1 Data Mining in Marketing

Analytics
According to the data analytics company SAS, data mining is any method of examining large sets
of data to find patterns and then using those patterns to predict future outcomes.” Among the dif-
ferent methods of data mining are predictive analytics, natural language processing, and machine
learning. The much-discussed big data revolution in marketing is really the integration of data min-
ing in understanding consumers, predicting the actions of customers and markets, and using those
predictions to make strategic marketing decisions, serve ads, and optimize our experiences as con-
sumers.
retargeting ads Take, for instance, the last time you saw an ad that was for a brand of which you have never
Ads that target a user heard, but which offered the exact product you needed. Ads from websites you visited are not
based on their prior based on data mining—they simply use tracking pixels and other technologies to track you individ-
actions, such as a visit to a ually, presenting you with ads from brands you have browsed in the past. While many consumers
website.
think these retargeting ads are the product of data mining, they are not. They simply use your
individual browser history to show you ads based on that history. However, what about those ads
that seem perfectly aligned with your personality, needs, and shopping history, from completely
new-to-you brands? You know you never visited their website, so how did they know you would
want their products? Those marketing efforts are the result of predictive analytics. Every second,
billions of bytes of data are collected about consumers. This data is analyzed using computers look-
ing for patterns, which they detect with the use of often very common statistical models.
natural language At the same time, billions of text items, from TikTok comments to customer-service communi-
processing cations, need to be analyzed systematically. While certainly humans can, and do, read most text
Using computers to commentary initially, the volume of this text input for large brands means that they need a more
analyze and map patterns sophisticated way to detect patterns in the text. This is why brands increasingly turn to natural
in text.
language processing, or using computers to analyze and map patterns in text.
Data mining is about looking for patterns.”! From text to clicks, consumer actions follow pat-
terns every day. Our shopping behavior changes based on social trends, the weather, the economy,
what we see advertised, and our own changing lifecycles. Companies’ reputations grow or decline
based on online commentary. New products shoulder out old ones, while long-forgotten brands
make strong comebacks. Sometimes, those patterns are obvious from our other data sources. We
have learned a lot in this book about using data sources to understand and predict our best mar-
keting moves. However, sometimes patterns are concealed, too subtle for us to notice or too much
work for people to understand. After all, you would not spend all day online looking at millions of
e-commerce orders and then sending custom-tailored emails to each and every one of thousands of
customers, based on their last purchase with your brand. It's not possible—but data mining makes
it very possible, by processing data, finding patterns, and instantly predicting the right response to
those patterns, be it a new email with tailored discounts or a dynamic ad with text custom-scripted
to meet customer interests. In this section, we will explore the world of data mining.
12.2 A Closer Look: The Next Must-

Have Product?
Jasminee is a beauty company that has been in business for more than 100 years. Sold in exclusive
retail stores, its floral scented bath products, organic makeup, and natural skincare are a cult
329
favorite. With over $50 million in annual sales, it has a lot of data on
its customers. The problem is,
the company doesn't know how best to use this wealth of data.
The company collects data on every channel on which t markets. From its ads to
itssocial media
activities, it measures the success of each campaign. It also has a CRM to keep
track of each B2C
customer, as well as its B2B accounts. On the surface, it looks as if the brand is doing
an excellent
job of using data to optimize its marketing. However, the executive team knows that
this century-
old beauty company is not up to date in how it uses data. The reason: It needs a plan.
ce ?
“I can understand social media data; I started out in social media marketing,” says the vice
president of consumer sales, Esther Ngongo. “CRM, customer relationship management data, also
makes sense to me, because it tells us the story of the individual customer. Email, ad analytics, and
other channel-specific data make sense when we dive into them individually—for instance, when
we A/B test email subject lines.”
“But,” she notes, “we know we can do more. Many brands are using their existing data to predict
which of their products will be a best-seller, or what geographic regions or demographics to target.
We do a good job of doing descriptive analytics—using analytics to talk about what's happening or
has happened with our marketing. What we also need to do is predictive analytics—using analytics
to predict trends and outcomes.”
Esther turns to Jacyntha Smith, the new data scientist who has joined the company’s business
intelligence team. Business intelligence, the practice of mining an organization's data for inputs to
business decisions, is the broader discipline to which the use of technology to mine marketing data
belongs.”
“We need to be able to predict consumer behavior, including demand for our products,” says
Esther on their weekly Zoom call. “For example, the past year, we have had much lower demand
for some products that we thought would be huge sellers. We had to mark them down 75% just to
move product. At the same time, we ran out of the chamomile line completely in half our stores,
with no pattern that we could figure out. If we knew what the demand was for chamomile body
wash each month, we could produce just the right number of units. Better still, if we knew where
the demand was going to be highest, we could ship more units to regions where chamomile is pop-
ular.”
“That's just one example. If we could predict which customers are likely to be our most loyal, we
could target them with coupons, ads, and social media messages that cater to their needs. I know
that many brands are winning using predictive models—we can too, if we make the effort. I'd like
us to get started.”
“We definitely can do that,” says Jacintha. “First, we need to decide on a starting point. Pre-
dictive analytics is complex. For a start, you need to define predictive analytics. True predictive
analytics uses machine learning,“' which is the use of computer algorithms to learn, or improve
their accuracy and effectiveness over time, as they encounter more and more data. You do need a
lot of data in order for algorithms to be able to detect patterns, and clearly predict outcomes. Thank-
fully, were a large organization with lots of data, so that's not a hurdle.
“Next, we need to understand the kinds of predictive models and other
methods available to us. They all have benefits, but they all also have limitations.
Let's take predicting pricing, for instance. A machine learning algorithm can only
mine the data provided to it. So, if we use a machine learning algorithm to predict
the ideal pricing for our products, we need to have some idea of what factors have
influenced our prices in the past. We would then need to ‘train’ the algorithm on
that data, so that it can learn the patterns, such as the economic factors, social
media buzz, or sales numbers, that impact the prices our customers are willing to
pay. Once the algorithm is trained, it will keep on learning, making better predic-
tions as we use it, and it learns when it's right and when it makes mistakes. So, it's
Source: Shutterstock.com the right time to get started, since it's going to take time to get great at making
predictions.”
“I didn't realize you needed to train computers to do these things! I thought they just knew,”
says Esther. “There's more to predictive analytics than I thought.”
“That's true,” says Jacintha. “But used right, it can really give us a competitive edge. Let's come
up with a strategy. First, let's come up with goals for our predictive analytics program. For instance,
do we want to identify our most profitable customers based on their behavior? Predict demand for
new products? Build a marketing automation program that promotes the perfect product to each
customer, every time?
“Let's do all of that and more!”
“We can do that, but it will take different algorithms, different data, and different approaches.
Let's prove the benefits of predictive analytics with a focused program initially. Let's start by pre-
dicting which customers are most likely to be our biggest fans.”
“We can do that?”
"Yes, by looking at historical data on what customers do at the beginning of their relationship
with us, and on subsequent interactions, that indicate a potential for loyalty that meets our high-
est-level ‘VIP’ standards, which means a customer in the top 10% of lifetime customer value. We can
then engage those customers early with offers, messaging, and ads that may increase their CLV.”
It took a few months to train, implement, and launch the predictive analytics system: after
six months, customers were identified in the first few weeks of their first purchase as likely VIPs.
Customers who received offers based on these predictions made 30% more purchases, with a 15%
higher CLV than the average VIP.
“The investment in predictive analytics really paid off,” says Esther. “Now, can you predict the
weather for my vacation next month?”
Chapter 12 Predictive Analytics, Data Visualizations, and Dashboards 331
12.3 Data Mining and Predictive

Analytics in Marketing
In recent years, increasing numbers of marketing functions are supported by data mining and pre-
dictive analytics.
It's important to note that automation based on predictive analytics is not replacing human
marketers. It's accomplishing tasks that human marketers cannot and have never performed, sup-
porting us in our work." For example, many ad platforms now create hundreds of different ads
from images and text created by advertising managers. The platforms serve these hundreds of
combinations, then slowly start to serve more of those combinations that are winning the most
clicks. You would never have the time to create hundreds of variations on a single ad manually. This
automation is enhancing your ability to create the right ad, automating testing different types of
creative to different audiences. A human being is still writing the ad, designing the graphics, and,
most importantly, creating the marketing strategy that puts the product or service in front of the
right audience. If automation, predictive analytics, and Al are a threat to any jobs, it's the rote task-
focused roles that are neither creative nor strategic.”
me
Predictive
Analytics
®

Data Mining Versus Predictive Analytics

Versus Artificial Intelligence
Before we go further into the details of data mining and predictive analytics, let's clarify some
machine learning
terms. As stated before, data mining is any process that utilizes large datasets to make predictions.
A type of Al by which
Predictive analytics is one type of data mining, one that uses statistical analysis to make predic-
computers learn to
understand, predict, and tions based on those large datasets. Going a step further, artificial intelligence is a term you hear a
sometimes perform lot when it comes to business technologies, but it’s currently less common than is touted. Artificial
actions based on
intelligence (Al) is the science of developing computers to act and process information in ways sim-
algorithms.
ilar to human thought; much of the AI used in business is machine learning, a type of AI by which
algorithms computers learn to understand, predict and sometimes perform actions based on algorithms,
Sets of rules for which are sets of rules for understanding and acting on information."
understanding and acting
on information.
Machine Learning
Machine learning is one part of the complex world of AI, using relatively simpler techniques than
true, sophisticated AI systems such as those that power Siri."! Most machine learning commercially
available is simply a speedy way of doing statistics with computers to work out the next step in
a customer's journey or identify especially profitable customers. Many use statistical models that
could be used on a small scale in a spreadsheet program; they simply process a lot of data. This
does not mean that predictive analytics is not extremely valuable to marketers; simply, it means
that much predictive analytics is not AI, but simply a useful way of helping marketers accelerate
processes while increasing their accuracy, using fairly straightforward statistics. That will certainly
change in the next few years. The use of more advanced AI techniques, such as neural networks,
which mimic the connections in the human brain, will make AI more sophisticated, able to make
more decisions independently."
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12.4 How Does Data Mining and

Predictive Analytics Work?
Most data mining and predictive analytics today rely on common statistical models. They are struc-
tured to understand information and make predictions based on the patterns they see in large
datasets. For example, we can return to our friends at Jasminee. They have more than twenty years
of sales data. Alongside this data, they have years of information on the external context in which
sales occurred, such as economic conditions, the sales of their direct competitors, and even the
weather, which they suspect impacts the sales of their sunscreens and lotions. In addition, they
have data on promotions, discounts, and advertising going back ten years.
Using this data, a predictive analytics platform can look for patterns that relate to product
sales. It can look at millions of sales, comparing those sales with weather data, and determine
whether sunscreen sales do, indeed, correlate with sunnier weather. It can look for patterns in
coupon redemption, referral traffic, or other marketing factors. In doing so, it can pinpoint the
factors that seem to support stronger sales, along with those to avoid. Further, when paired with
an advertising platform or marketing automation system, it can automatically enact some of the
actions it has identified as beneficial by mining the data. For example, if it notes a pattern of higher
redemptions for sunscreen on sunny days, it can automatically send a coupon to consumers in
cities where the weather is going to be sunny.
In order to create these predictions, a predictive analytics platform relies on clean data, the predictive models
right predictive models, and aligning the models with appropriate applications across the 4Ps. In Statistical model used in
the next section, we will explore how predictive analytics works. machine learning to make
predictions.
12.5 Basic Concepts of Predictive

Analytics: A Primer for Marketers
Predictive models used in machine learning rely on common statistics. This is not meant to be a
complete guide to predictive models. You do not need to be able to code to be able to know the basics
of predictive analytics! In this section, we'll learn about some of the very basic core concepts of pre-
dictive analytics. It's a toolkit of key terms and activities that marketers need to know in order to
make informed decisions, as marketers, about how they will use predictive analytics in their work.
Think of it as an expanded glossary that will allow you to know what data scientists are talking
about.
Cleaning Data
as
To be useful in any analytics effort, data must be what is called “clean’—it must be as accurate
possible, formatted consistently and correctly for its purpose, and sourced reliably. Most marketing
of
data can suffer from issues in any or all of these areas, as does most data. Let's take the example
Jasminee’s email marketing list. Consumers can join the list in several ways:
1. Signing up online via several different web forms on the Jasminee site
2. Being automatically enrolled when they make an e-commerce purchase
3. Adding their names to a signup sheet at a popup event

4. Providing their names verbally to cashiers when they pay in-store, with cashiers typing the
contact information into the point-of-sale (POS) system
5. Via text at popup events
In all of these systems, errors creep in: Someone might type their name in twice in an online
form, or enter it using all lowercase letters, or put their full name, both first and last, into the box for
first names. A cashier may mis-hear someone's name, entering the wrong name, such as “Sharon”
for “Cheryl.” Handwriting may be hard to read on signup sheets. In time, a significant percentage of
data may be inaccurate.”
At the same time, even accurate data may be formatted inconsistently or incorrectly. For exam-
ple, let's say the company switches to using ZIP + 4 ZIP codes, the longer version of ZIP codes, this
year. All customer addresses collected prior to the date of the changeover to the longer ZIP codes
will need to be updated. If they are not, the ZIP code data will be inconsistent depending on the
dates on which they were collected. Some data may be listed last name first, others, with the first
name first. Mix them up, and you may end up sending thousands of customers personalized emails
addressing them by their last names when you meant to use their first.
What are some of the inconsistencies and potential errors you see in the table? How would they impact a
company’s ability to use the data in the table?
|First Last Email Address
Name _ /|Name
Cheryl Ngo Chrly@learnmarketinganalytics.com (999)567-8910
David Klein David@learnmarketinganalytics.co 999-123-4567
Anthony |James Anthony@learnmarketinganalytics.com 9992345678
Smith esmith@learnmarketinganalytics.com (999)1236789 |
Emma ewillis@learnmarketinanalytics.com |
Willis
georgem@learnmarketinganalytics.com 999-999-1234
Data should be cleaned regularly, even if a brand is not doing predictive analytics. However, for
predictive analytics, it is the standard first step to engage in data cleansing. Typically, this involves
checking data for accuracy against a reliable source—for instance, verifying that you have the cor-
rect ZIP codes with postal services is standard. You should also check to ensure that all data follows
consistent formats for each data type—for example, that all customer records have the first name
in the same field. Once data is cleaned, it's ready to be mined, as brands can feel confident that
the data itself is as reliable as it can be.” Data scientists then need to select the right methods for
mining data. For text data, such as social media posts, customer reviews, and customer service call
transcripts, they typically use text analytics. For quantitative data, such as web traffic, advertising
clicks, and pricing strategies, they use a range of predictive models.
Supervised Versus Unsupervised Learning

Machine learning comes in two distinct types: supervised and unsupervised. When data scientists
supervised learning
implement supervised learning, they provide the machine learning system with a set of examples
Developing a machine
from which it can learn about the patterns it's meant to detect. For example, the team at Jasminee learning system with a set
could develop a database of their top 10% of customers, with all their characteristics clearly labeled. of examples, from which it
This would be the system's training dataset. The machine learning (ML) system could then learn can learn about the
patterns it’s meant to
from this dataset what a profitable customer looks like: what marketing channels they engage detect.
with, where they live, what products they buy, what social media they use. It can then predict who
will become a profitable customer based on this historical data. training dataset
But what if times are changing? What if Esther and her team don't know who their most prof- A set of examples used to
train machine learning
itable customers are because they see their demographics shifting? Or what if they simply have not
algorithms in supervised
identified a training set that they feel reflects the correct information? It may be better to use learning.
unsupervised learning. In unsupervised learning, data scientists don't use a training dataset. The
system is simply set to analyze data in order to detect its own patterns. Unsupervised is useful in unsupervised
finding patterns that are not expected, such as new consumers who might be an attractive market learning
for Jasminee but have not yet been identified as profitable customers. It can be invaluable in under- Development of a machine
learning system without a
standing data that does not seem to have any patterns or for which the patterns are not
training dataset. The
understood." system is simply set to
analyze data in order to
detect its own patterns.
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QUERY: CUP?
Supervised Machine Learning

The computer is given examples of inputs and typical outputs which it uses to develop and refine an
algorithm. The algorithm is applied to new data and the outcome is used for further refinement.
E.g. Training a computerto recognize and classify similar objects based on shape.
Unsupervised Machine Learning

Unsupervised machine learning is similartolearning without a teacher. The computer
learns by exploring the data and finding structure and data patterns on its own.
E.g, Learning to spot patterns in customer data based on purchasing behaviour.
As a marketer, you need to know whether the machine learning tools youre relying on use
supervised or unsupervised learning. If youre relying on supervised learning, it's often valuable to
work with your data team to provide those training datasets that model what, for instance, great
customers look like. If you're relying on unsupervised learning, it's important to remember that
such methods can uncover patterns in your data that are especially surprising, particularly in very
large datasets or new situations. Both methods can be highly effective; however, your role may be
more hands-on when using supervised learning.
337
Statistical Methods
Key to predictive analytics is statistical analysis. Predictive analytics is the use of statistics, in fact,
to describe current data and forecast future data. For instance, a brand may look at past data of
how many units of a product they sell whenever a specific condition is present, using that informa-
tion to project future sales depending on future conditions. Jasminee’s team may look at sunscreen
sales, for example, as it correlates to the weather. If statistical analysis shows that sunscreen sales
increase by 5% for every one-degree increase in average weekly temperature, they can predict the
growth in sales they will see as the weather gets warmer every year. Most of the predictive analytics
tools on which marketers rely use statistics as their core functionality; while the statistical models
are often very complex, it's important to remember that even the more cutting-edge AI tools used
in marketing likely are simply making predictions based on commonly used statistical techniques.
Regression Analysis
Regression analysis maps the relationship between variables; specifically, it measures the extent
regression analysis
to which one or more variables change in proportion to other variables. Many predictive analytics
A statistical method that
programs use linear regression to predict consumer actions. Take the example in the introduction maps the relationship
to this section: measuring the growth in sales in relationship to changes in the weather. This is an between variables;
example of regression analysis: It looks at how much one variable, in this case, sunscreen sales, vary specifically, it measures
the extent to which one or
in relationship to another variable, in this case, weekly average temperature. Regression models rely more variables change in
on regression analysis to predict the future outcome of one or more phenomena if another specific proportion to other
factor is present or absent. Regression analysis includes several different but related methods. variables.
Univariate regression tracks the relationship between a single variable that marketers are trying
univariate regression
to predict, called the dependent or response variable, and just one predictive variable, also called
the independent variable, or the variable that we think is causing the dependent variable’ varia- Tracks the relationship
between a single variable
tions. Multivariate regression looks at more complex relationships. It tracks relationships among that marketers are trying to
several different dependent and predictive variables. It's important to remember that, as the predict.
famous adage says, “Correlation does not equal causation.” That is, two things may happen at the
same rate, without being directly related. What if Jasminee promotes its sunscreen with a Buy One, dependent or
response variable
Get One Free sale every June, just as temperatures are rising in the Western Hemisphere? Is the
In regression analysis, the
growth in sales due to the summer weather, or is it due to the sale? Regression, remember, only tells
variable whose changes
us that two or more things tend to happen at the same time, in roughly the same proportions. It the researchers are trying
doesn't prove the reasons behind those correlations. to predict.
predictive variable
In regression analysis the
variable that we think is
causing the dependent
variable’s variations.
multivariate
regression
Regression analysis that
tracks relationships among
several different
dependent and predictive
variables.
One way in which analysts can paint a fuller picture of causation is by selecting the right
regression analysis methods. Choosing univariate analysis, for instance, is perfect in some situa-
tions while over-simplifying others. In the Jasminee example, the team might miss the impact of
sales if they just attempt to correlate sales with weather. If they also factor in the discount promo-
tions by using a multivariate regression, by contrast, they can examine the impacts of both weather
and discounting on sales. Using multivariate regression, they find that sales do, indeed, increase by
5% for every one degree increase in temperature, but only if there has been a Buy One, Get One pro-
motion within one week of the temperature jump. Skilled interpretation is also critical.
Bayesian Models
Bayesian probability
Did you know that one of the most sophisticated tools for mining big data is more than 300 years
old, pre-dating the invention of computers by centuries? Bayes’ Theorem, a philosophical concept
Statistical method that
creates inferences based developed in the 1700s by mathematician Thomas Bayes, forms the basis for models that allow for
on new evidence as it highly nuanced interpretations of patterns in data. In Bayesian probability, we make inferences
becomes available. based on new evidence as it becomes available. Every time new data is added, a Bayesian model
updates its predictions of what is likely to happen in the future.
339
BAYESIAN ANALYSIS
Posterior beliefs
Evidence
Prior beliefs
Take, for instance, the earlier look at Jasminee'’s sunscreen sales. We learned that sales jump
along with increases in temperature using a simple univariate regression. The team later used mul-
tivariate regression to factor in the Buy One, Get One Free offer. But what if new information
becomes available? What if the first week in July, sales jumped even more, by 10%? How can the
team now predict where sales will go next week? Bayesian probability models continuously update
probability predictions based on incoming new information. This makes them extremely powerful
for predictive modeling in marketing. Many platforms use Bayesian probability to provide contin-
uously accurate predictions based on current consumer actions.
The advantage of Bayesian statistics is that, instead of making a single prediction, a machine probability
learning algorithm built using Bayesian probability is always updating its predictions based on new distribution
data. Another strength is that Bayesian models provide a probability distribution, or a range of A range of likely outcomes
likely outcomes, for the information we want to predict, rather than an absolute percentage for a provided by Bayesian
probability methods.
probability. For instance, a predictive algorithm using Bayes may indicate that a consumer living in
a city with a five-degree jump in temperature who received a Buy One, Get One email has a 50-60%
likelihood of buying sunscreen on their next website visit. Because these models provide this range,
rather than trying to pinpoint exact likelihoods, they are considered more realistic models in many
contexts, since they acknowledge that we can only roughly predict future actions and provide more
details on the actual chances of a consumer taking a given action.
Classification Models
In contrast with regression models, a classification model sorts phenomena, such as customers,
classification model
into related groups, classifying them according to criteria. These criteria can be set by marketers or
A mathematical method
that sorts phenomena,
can be learned by the algorithm by seeing patterns in the data. For instance, a classification model
such as customers, into may sort customers into those likely to become profitable versus those likely to generate little
related groups, classifying profit.
them according to criteria,
either as a binary
classification, which simply
sorts phenomena into
categories, or a
classification predictive
model, which notes the
probability of an item
belonging to a specific
class.
Data
classification
vector illustration eps 10
MORE DETAILS —>
A classification model can be probabilistic or non-probabilistic. Up until now, the models we

binary classification
model have discussed have all been probabilistic; that is, they use probability to determine the likelihood
of a consumer taking a specific action or fitting a particular persona. Such a model can be trained
A classification model that
assigns labels to items. by providing it with a list of profitable customers and a list of unprofitable ones. It will then detect
the similarities between profitable customers—for instance, they may be more likely than the aver-
classification age customer to shop late at night, or to purchase hypoallergenic products. Or they may be over
predictive modeling twenty-five years old, live in the southern United States, or be email subscribers. Regardless of
A probabilistic model for whether characteristics are behavioral, such as shopping times, or demographic, such as location, a
classification that can note
good classification model will be able to recognize patterns in those characteristics, provided with a
the probability of an item
belonging to a specific large enough training dataset. It will then take that information and use it to characterize any cus-
class. tomer as to whether or not they have the characteristics of a profitable customer. Classification
models vary in how they classify: binary classification models can simply assign labels to items;
classification predictive modeling, a probabilistic model, can note the probability of an item
belonging to a specific class.""! For instance, a classification model designed to detect whether a new
customer is likely to be profitable might label a customer who meets most of the criteria that it has
learned indicate profitability as “profitable.” By contrast, a classification predictive model might
indicate that the new customer is 80% likely to be profitable, based on their location, behaviors, and
other relevant factors.
It's important to note that a classification model can only label phenomena. It does not explain
why they act as they do. For instance, it cannot tell us why consumers who shop late at night are
the most profitable. Nonetheless, classification is a critical part of predictive analytics and data
mining. By categorizing consumers or actions, marketers using a classification model can predict
consumer actions based on their membership in a specific category. Many ad targeting platforms
rely on classification models to determine the appropriate audience for a given ad, for example.
They will classify a given consumer as being interested in a product type based on how consistent
their actions are with other consumers who made a specific purchase. Consumers may be classified
as prospective car buyers, for instance, if their online actions are very similar to those of millions
of other consumers who took the same actions and then purchased a vehicle, such as looking at
car mileage charts or reading online car reviews. Ads for cars will then be served to the consumer,
based on this classification, which predicts that they will soon purchase a vehicle.
Neural Networks
Neural networks look for patterns in data in a way that is similar to the connections formed by neural networks
human minds." A neural network is built of nodes, simple processing features that are connected
Machine learning method
to each other. These nodes are built in layers, and information is processed by successive layers to that looks for patterns in
detect connections and patterns. Data enters the input layer, is processed in the hidden layer(s), data in a way that is similar
which contains hundreds or thousands of nodes, and is then made available through an output to the connections formed
by human minds.
layer, which provides users with the processed data. Neural networks are often supervised, mean-
ing they are trained using a training data set rather than relying on unsupervised learning. Neural
networks are often used in predicting consumer attitudes and behavior. They can also be used to
generate content, such as in dynamically generated ads.
RECURRENT
NEURAL NETWORK
HIDDEN |!
12.6 Natural Language Processing for

Data Mining
Natural language processing (NLP) is the science of using computers to understand and detect pat-
terns in text. It's valuable in understanding large amounts of text, such as analyzing the transcripts
of customer-service calls to look for trends. Let's go back to Jasminee. They have a wide range of
different types of text content with important data, from tweets about their products to the tran-
scripts of customer-service calls. They need a way to understand all this text-based data. In this
section, we will look at the principles and processes of NLP.
oO
edureka!
Natural
Language :.
Processing :

343
Methods of Natural Language Processing

Natural language processing involves breaking text into small segments that computers can under-
preprocessing
stand, then mapping out the meaning of that text by looking for patterns. It starts with
preprocessing, which changes text into the special fragments that a computer can analyze. After Step in natural language
processing that changes
preprocessing, methods such as bag-of-words and term frequency-inverse document frequency text into the special
(TE-IDF) mine the preprocessed text for patterns in the types of words used as well as the relation- fragments that a computer
ships of those words to each other, in order to understand the themes and sentiment of content. In can analyze.
this section, we'll explore some of the key concepts of natural language processing. The emphasis
bag-of-words
throughout is on how NLP functions.
Method of natural
language process that
converts text to numbers
Preprocessing that computers can
process and depends on
how often words appear to
We talked earlier about how data needs to be cleaned before it's using for data mining, to ensure it's determine meaning.
consistent, accurate, and updated. Since human language is too complex for today’s computers to
term
understand in its standard forms, it needs to be processed into units that a computer can better
frequency-inverse
handle. In natural language processing, this is called preprocessing, and it typically involves the fol- document frequency
lowing steps." (TF-IDF)
Measures how often a
FIGURE 12.1 Preprocessing term appears within a
document, comparing the
frequency to how popular
the term is overall in the
training set.
Stemming/
Stop Word Removal Tokenization Lemmatization
Stop word removal: Common words such as “the,” “and,” “he,” “they,” “or,” and so on are stop word removal
removed. This can dramatically change the meaning of some sentences, yet is a common prepro- Step in natural language
cessing step. For example, picture a review on the Jasminee site that reads “The lilac scent is THE processing in which
fragrance for Spring.” Stop word removal takes out all instances of “the,” changing the meaning of common words such as
“the,” “and,” “he,” “they,”
the sentence. Nonetheless, many natural language processing systems remove stop words; though and “or” are removed.
many newer ones, such as BERT, a highly advanced method developed at Google, do not.
Tokenization: Sentences are broken up into individual words, simple phrases, and punctuation tokenization
symbols. Step in natural language

processing in which
sentences are broken up
into individual words,
simple phrases, and
punctuation symbols.
Stemming or lemmatization: Variations of a word are transformed to their common origin. For
stemming or
lemmatization example, “colorful” and “colors” are changed simply to “color.” Past tenses are also made present
tense: for instance, “ordered” and “ordering” become “order.” Stemming is the simpler, less accurate
Step in natural language
processing in which way to reduce variations on a word to the word's most basic form. In stemming, compound or long
variations of a word are forms of a word are trimmed; “ing” is simply removed from the end of “exciting” to become “excite.”
transformed to their
As you may guess, stemming can sometimes change a word's meaning. For instance, with stop
common origin. For
example, “colorful” and words removed and stemming, a review saying, “a new fragrance from Jasminee is always an excit-
“colors” are changed ing happening” would become “fragrance Jasminee excite happen.” Lemmatization, by contrast,
simply to “color.” uses grammar rules to identify the core meaning of a word. It is more likely to identify the word
“happening” as a synonym for an event, and not a verb.
Once text has been preprocessed, it can be analyzed." Two of the most common methods of
analyzing text are bag-of-words and TF-IDF.
Bag-of-Words
Bag-of-words converts text to numbers that computers can process. It does so by

first identifying each individual word in a document. It then breaks the docu-
Ss bs ment text into individual sentences or phrases, counting the frequency with
= Sere =e which a word appears in each sentence. For example, a gym may look at their
caues $5SB ACHIEVEScrm ; media comments. They want to understand the social media buzz about
social
sec aS == COMMITHNENTin :
their programs. An algorithm relying on bag-of-words will count how often, for
PERSEVER ANCE instance, the word “workout” appears in a set of social media posts by fans about
the gym, as well as the frequency of any other words, such as “weights.” It will
~ ACHIEVEI== HARD =*2WORK sours then determine the topic of a text from how often words are mentioned. If the
S| word “weights” appears often, it will determine that weights are important to the
Fe gyms fans. Of course, you could go through millions of Instagram posts and
count up all the words, but it would take a long time. Bag-of-words, though a very
simple method, is useful in identifying trends, topics of interest, areas of concern,
and overall consumer intent.
TF-IDF
Term frequency-inverse document frequency (TF-IDF) measures how often a term appears within
a document, comparing the frequency to how popular the term is overall in the training set.
Remember, the training set is the set of comparable materials on which a machine learning system
“trains” in order to recognize patterns. Take, for instance, the team at Jasminee. They have tran-
scripts of all customer service calls to their call center. Using TF-IDF, they want to identify those
calls that are about shipping and delivery, to identify how customers feel about the company's
order fulfillment. They first train the model using all the transcripts for the past two years of
customer service calls. Using TD-IDF, they can then identify calls that have words such as “ship-
ping,” “arrived,” “delivery,” and “ship” much more often than a typical customer service call. “Term
frequency” refers to how often a term appears in a specific document—in this case, a call tran-
script—while “inverse document frequency’ is the relative frequency with which the term appears
in the training materials, or corpus," and is thus the measure of how popular the term is overall in
that type of text. If the word “shipping” occurs only once every 300 words in the average customer
service call transcript, but once every fifty words in a specific one, then that specific transcript is
likely to be from a call with a consumer highly concerned about shipping!
Natural language processing, though powerful, does not “read” language the way the human
brain can. It relies on highly simplified versions of text, looking for patterns in stripped-down con-
tent. This doesn't mean that NLP is not a critical tool for marketers. Rather, you should understand
345
its limitations as of this writing when relying on NLP-based tools to understan

d your consumer
sentiment, customer feedback, or competitive landscape. It is just one tool
of many.
Sentiment Analysis
A specialized application of text analytics used often in marketing is sentiment analysis. Senti-
ment analysis is the mining of text to measure the tone, on a scale from negative to positive. For
sentiment analysis
example, Outdoors.ly might use sentiment analysis on social media posts about cross-country ski- The mining of text to
measure the tone, ona
ing, in order to measure the current attitude of consumers toward the sport. They might mine the scale from negative to
transcripts of customer-service calls to measure the positivity or negativity of the conversations. positive.
Rules-Based Sentiment Analysis

The simplest forms of sentiment analysis simply looked for positive words, such as “good,” “happy,”
or “cool,” or negative ones, such as “sloppy.” The problem is that people can often say something pos-
itive using complex sentences that involve a mix of positive and negative words. Thus, sentiment
analysis was challenging to develop, since it involves nuanced language.
Nonetheless, in somewhat more sophisticated form, sentiment analysis that looks for positive rules-based
sentiment analysis
and negative terms is still utilized. Called rules-based sentiment analysis, it depends on a set of, as
the name suggests, rules, to measure whether the sentiment of a text is positive or critical. One Sentiment analysis that
uses a set of rules to
method that ensures greater accuracy of analysis is a sentiment library. This is a collection of posi- measure whether the
tive and negative phrases rather than individual words. These libraries are created by humans. For sentiment of a text is
instance, “barely tolerable” is classified as negative by humans, even though it contains a word, “tol- positive or critical.
erable,” that can be neutral without the addition of the modifier “barely.”””
Machine-Learning Sentiment Analysis
Machine-learning (ML) sentiment analysis, in contrast with rules-based sentiment analysis, does
machine-learning
(ML) sentiment
not use defined libraries of phrases. Instead, it learns what phrases mean by being trained on a set
analysis of documents that have already been labeled as having a specific meaning. For instance, a company
Sentiment analysis that
could identify several thousand social media posts that are positive, several thousand neutral ones,
learns what phrases mean and a similar number of negative ones. An ML sentiment analysis system would then develop its
by being trained on a set own set of rules as to what is a positive statement, a neutral one, or a negative one. The more posts
of documents that have
already been labeled as
that it's provided that are labeled by humans, the more likely it is to correctly create a set of rules
having a specific meaning. to identify the tone of a comment.”
As you can see, both types of sentiment depend on initial human input. A computer needs to
learn from humans what is considered a specific type of language, such as a positive social media
comment or a useful form submission. Data scientists either must present the computer with a
defined set of rules, or with a large number of examples.
Selecting the Right Models

As we see in the previous examples, the range of predictive models available to marketers varies
in application. In many cases, more than one model might apply to a marketing challenge. For
instance, when trying to determine the right message that will cause a prospect to convert, do we
use a Classification model to categorize them according to the type of buyer they likely represent,
or do we use a probability model to predict the likelihood of their converting on a given website
visit? Marketers should work together with their data analysts to understand the types of models
that are being applied to their marketing data. Teams should be willing to experiment with differ-
ent models in order to determine which ones result in the best results, as measured in revenue.
347
12.7 Using Predictive Analytics

Predictive analytics are among the most exciting tools in a modern marketer's toolset. They can
help organizations predict trends on both a large scale, such as forecasting demand for a product
over several years, and on the individual consumer level, predicting the actions of a specific con-
sumer in real time.
Many marketers are using predictive analytics without even knowing it. For instance, any time
you place an online ad, sophisticated predictive models are used to determine which users brows-
ing a website at any given moment are most likely to welcome the ad. This prediction is created
using models that might consider a consumer's past search history, products they have purchased,
their social media friends’ actions, their location, age, income, or other factors. While, as we learned
in the prior section, no predictive model is perfect, predictive analytics can provide an additional
input for marketing decisions.
Predictive analytics can only work, in its current form, with large datasets—large enough for
the models to detect clear patterns. For most machine learning algorithms, that means hundreds of
thousands to millions of individual items of data need to be available for the algorithm to be able
to make realistic predictions.
That doesnt mean that companies with smaller datasets can't leverage predictive models.
Many tools available to organizations of all sizes still can build their predictive models based on
large datasets. When a small coffee shop places an Instagram ad, they are leveraging the predic-
tive modeling of Instagram’s parent company, Facebook, in determining which consumers are most
likely to click on their ads. The broad availability of powerful tools built on large consumer datasets
means that any company can market using predictions based on billions of consumer actions.
It's also possible to make predictions based on smaller sets of data without resorting to predic-
tive analytics. Think about the last time you “predicted” that your classmates might come to your
club's recruiting night if you put up fliers. You predicted this action on the part of your consumers
based on prior observations, even if your target audience consists only of a few hundred students.
Most of the techniques explored earlier in this book involve extrapolating trends from observed
data, yet don't fall under the heading of predictive analytics because they are done without using
complex models and high-powered computer programs. The email marketing company Mailchimp,
for instance, offers predictive analytics that select the best time to send an email promotion, such
as a newsletter or coupon. It bases its predictions on the most popular time for people on your
email list to open emails—for instance, if 30% of your subscribers open your email newsletter at
6:00 p.m., while 40% open it at 7:00 p.m., it will recommend a time closer to 7:00 p.m.”! Predictions
of this type are based on simple observation, falling outside of predictive analytics.
Predictive analytics is for large datasets that can't be analyzed using simpler methods, such as
observation or basic calculations using spreadsheets. Brands with large datasets, for instance, those
with millions of users, can mine their data to predict their consumers’ actions, while smaller com-
panies can rely on vendors that can build powerful models based on data available to the vendor,
which can be generalized to other contexts.
12.8 Data Visiualization
Once we have marketing data, we need to be able to see it. That's where marketing data
visualization
visualizations come in. Let's go back to Jasminee. Imagine if Esther asked Julie about recent sun-
A visual representation of
screen sales, and Julie responded something like this: “Our 4 oz. package sold 30,000 units each last
data, such as a graph,
chart, or infographic. month, except the coconut scent, which only sold 3,000. Last year, at the same time, I think coconut
sold the best, but don't remember by how much. Then, the 16 oz. is selling 40% better, which is about
the same as last year, and then there is the orange scent...”
All this information would get to be challenging to follow along with, let alone make useful
comparisons between datapoints. This is why marketers use visualizations such as charts, graphs,
and tables. They make it easier to process information about complex data.™! In this section, we
will learn more about techniques of data visualization for marketing metrics.
me
DATA CONCEPTS
Types of Visualizations
Marketing visualizations are typically charts, tables, presentations, and infographics. The most
common are charts and tables, gathered together in presentations for a quick snapshot of market-
ing performance or predictions. Another technique for presenting visualizations, the dashboard,
presents data interactively, most typically in real-time or near real-time. We will discuss creating
dashboards in detail later in the chapter.
349
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Whether you are creating a simple chart to show growth in sales or creating a robust dash-
boards with dozens of interactive charts and tables, the methods of visualization remain the same:
Gather your data, and present it in clear, attractive charts, tables, and infographics. In this section,
well learn about common types of charts, tables, and infographics along with some best practices
for making them accurate and appealing.
Types of Charts
Nearly every presentation of marketing data relies on charts. They map our sales by quarter and
our likes per Instagram post. They show us where we are in our journey to success by breaking
down data in a common set of shapes that have agreed-on functions and meanings. Let's take
a look at the most popular charts in marketing today. This is by no means an exhaustive list of
every type of chart possible. Rather, it’s a collection of those most often used in marketing analytics
reporting. For a comprehensive guide to charts, check out the references at the end of this chapter.
- Pie charts are another familiar chart type. These are round graphs that show different factors
pie chart
as slices of the circle. For instance, in the example shown, the slices each represent the percent-
Round graph that show
different factors as slices
age of Jasminee's sales represented by each product category. Pie charts can also be formatted
of the circle. as donut charts, with an empty center in which additional information can be presented.” A
related chart type, though not strictly considered a pie chart, is a sunburst diagram, which can
donut chart present a hierarchy of different data types within a single round chart.
Variation on the pie chart One of the main challenges with using pie charts in mar-
with an open center.
keting data visualization is that much marketing data does
bar chart not neatly add up to 100. The result is many pie charts that
don't add up—literally. For example, pie charts are often
Chart that represents data
as bars, with longer bars used to present the percentage of consumers who gave a
representing more of a specific response on a survey; however, if consumers could
quantity and shorter ones
give more than one response or no response, the percent-
representing less of a
quantity. ages will not total 100. A pie chart is not always appropriate
and should only be used for clearly separate data points
line graphs that together add up to the total number of responses or instances being measured. In
Graph that maps data on a many cases where pie charts are used, bar charts or line graphs are more accurate.
continuous line, such as
the amount of web traffic - Bar charts represent data as bars, with longer bars repre-
to a site on each day ina oat senting more of a quantity and shorter ones representing
month. i ; less of a quantity. Unlike pie charts, they can easily repre-
‘ be ie he sent information where each datapoint does not add up to
Venn diagram
gh wa u le 100. In the example pictured, for instance, we see the
Data representation that
results of a survey of Jasminee customer asking their
shows the overlap
between two or more favorite scents. Respondents were allowed to select more than one response, so a pie chart
different datasets. would not be appropriate. A bar chart makes it easy to compare the relative popularity of the
different items. Here, we can see that chamomile is twice as popular as pine among the con-
scatterplot sumers surveyed. Bar charts are among the most popular visualizations in business reports,
Chart that shows two including marketing analytics.
different variables as dots
on a graph. Bar charts include subtypes such as stacked bar charts, where several closely related dat-
apoints are grouped together into a single bar, making category comparisons easier. In the
trend line stacked bar chart shown, all soaps are together in one bar, while all lotions and lip balms
In a scatterplot, the line are also represented by a single bar. Each bar is subdivided by the specific scents that make
that is typically drawn
up each product category. Using a stacked bar chart allows marketers to present data on
through the area with the
densest concentration of product lines with multiple products, consumer groups with different subgroups, or mar-
dots, indicating the main keting channels, such as social media, that have several different specific outlets, that make
tendency of the data. up the broader category. Another way to group data in a bar chart is a grouped bar. In this
type, bars within a category are placed side by side, to allow for comparisons within a cat-
heatmap
egory.”"! Notice what happens when we move the stacked bar data from the prior example
A term that refers to two
into a grouped bar chart. It becomes much easier to see how chamomile dominates the soap
completely different types
of visualizations: In web category. When creating bar charts, it can be useful to experiment with different styles to
analytics and user determine which one presents data the most clearly.
experience measurement,
heatmaps are maps that
show specific areas of
interest or interaction on a
webpage or app. Areas
that receive large numbers
of clicks or other types of
attention from users, such
as mouse hovers, are
typically shown in red,
while those receiving little
attention are shown in
blue, with a range of colors
in between, typically
shades of red and purple.
In chart design, a heatmap
351
¢ Line graphs map data on a continuous

chart i i izati
line, such as the amount of web traffic to oe
presenting complex data
a site on each day in a month. They are Scent Preference that shows phenomena as
MiChamomile “Lavender |) Lemon! Pine
especially useful in showing trends. For a table with color used to
indicate stronger or
example, the line graph shown indicates weaker intensity or
the number of shoppers on the Jasminee sopra? relationships.
site every hour of Black Friday, the
busiest shopping day in the United Lotion | flowchart
States. You can see that traffic spikes in A diagram or chart that
the early morning, reduces in the after- illustrates a process.
Lip Balin
noon, and is at its highest in the evening.
funnel charts
Line charts, like bar charts, are extremely
A chart in the shape of a
popular in data visualization.
funnel, often used to
¢ Venn diagrams show the overlap illustrate conversion
processes or activities.
between two different datasets or more.
Each dataset is represented by a translucent circle. The overlap between the circles shows the
percentage of overlap between the two sets. For instance, in the example below, the circle on
the right represents the number of consumers who redeemed Jasminee's most recent coupon,
while the circle on the left represents the number of consumers who purchased lip balm.
The overlapped section represents
those consumers who both redeemed
that coupon and bought lip balm. You
can use Venn diagrams to show the
extent to which two or more factors
Lip Balm —
work together or show commonality.
Purchase
These diagrams can illustrate how
much two or more groups of con-
sumers have something in common,
the role two or more marketing chan-
nels played in conversions, the
number of times units of two or more products were purchased together, and so on. It can
be a useful way of presenting relationships clearly.
+ Scatterplots show two different variables as dots on a graph. For instance, in this example,
they show each time a consumer purchased chamomile soap as red dots, and each time they
received an email promotion as a blue dot. A trend line, calculated using linear regression, goes
through the thickest concentration of dots, showing the overall trend in the data. In this case,
sales of the chamomile soap correlate positively with email promotions. This does not prove
that email promotions lead to sales of the soap.
However, when we compare the cor-
relation between sales of lemon soap
with email promotions, we see a
much weaker correlation—notice
that the dots are much more dis-
persed around the grid, showing less
of a relationship between sales of
lemon soap, indicated by yellow dots,
and email promotions, again indi-
cated by blue dots. Scatterplots, as
you may have guessed, are often used Source: Shutterstock.com
in visualizations of linear regressions.
web
- Heatmap is a term that refers to two completely different types of visualizations. In
when we talked about web data,
analytics and user experience measurement, as we learned
or app.
heatmaps are maps that show specific areas of interest or interaction on a webpage
Areas that receive large numbers of clicks or other types of attention from users, such as
mouse hovers, are typically shown in red, while those receiving little attention are shown in
blue, with a range of colors in between, typically shades of red and purple, indicating areas of
relatively more or less interaction or attention. Another style of heatmap, a heatmap chart, can
be used as an alternative to scatterplots when presenting complex data—examples can include
data where one variable is a number and one is not, or data in which there is a measure of
intensity, such as the degree to which a product is rated positively or negatively, or the amount
of foot traffic in a store at different times.””
- A flowchart illustrates a process,
such as the steps needed to complete
a purchase. It can be used to diagram
internal processes for a marketing
department, identify the steps taken
by consumers in a specific interac-
tion, or show the progression of a
marketing campaign. Though used
less often for reporting, flowcharts
can be modified to show the process
for specific consumer interactions,
such as checking out on an e-com-
Source: Shutterstock.com merce site.
Funnel charts, as we saw in earlier chapters, are an absolutely critical marketing data visual-
ization. The process of a consumer becoming aware of a brand, engaging with it, and making
a purchase is referred to in marketing jargon as a funnel; the data relating to the sales funnel
are typically presented with a literal funnel visualization. Funnel charts may show the exact
number of consumers engaged with specific steps of the funnel in a given time period, map
the percentage of consumers who drop from the funnel at each step, or both. They can also
show the actions taken by consumers who abandon a funnel. For example, the team at Jas-
minee might show, in a funnel, that 3% of consumers abandon their shopping carts before
clicking on the checkout button to go to the brand's social media pages, while another 22%
leave to check emails. Using this information, they might hypothesize that consumers are leav-
ing the funnel not because they have lost interest, but to check on coupons available through
social or email marketing channels. Making it easier to remember coupon codes, clearly noting
when a coupon code has been pre-populated, or even using popup coupons might thus keep
consumers on site. Funnel visualizations make it easier to manage data related to customer
retention. Another type of chart showing customer interactions is the customer journey map.
The key to successful data visualization is to select a style that is appropriate to the informa-
tion being presented. Don't be afraid to use more than one type of chart if that's appropriate to the
information you wish to present. For example, you can show long-range trends asa line chart, while
switching to a table for a closer look at monthly store-by-store comparisons.
Charts: Color, Design and Labels
Charts should be clearly labeled to ensure that readers understand what they are seeing. Ideally,
the label needs to be next to the datapoint. When labels are really long, such as the names of prod-
ucts, it's possible to use a key, explaining which item on the chart represents what. However, keys
should not rely solely on color, as readers who are colorblind will face additional barriers in reading
a chart with a key that shows what color represents what data.
In addition, color can be used to show more meaning; it's important that color be used with
high contrast, so that colorblind users can get the same information from the chart as those who
see color. You can use darker or brighter colors to highlight the most significant information. For
example, a store with particularly strong sales growth could be highlighted in red.
353
FIGURE 12.2 Bar Chart Example
Scent Preference
Lemon 35%
Lavender
Pine 15%
Chamomile 30%
Labels should indicate the percentages for each item, as well as the information being mea-
sured (see Figure 12.2). Keep chart types consistent for the same data. For instance, if you show the
percentage of products sold in one store as a pie chart, use a pie chart to show the sales for each
store, rather than presenting the same data for one store as a line graph, another as a pie chart.
Consistency ensures comprehension while also maintaining integrity. Effective charts are easy to
read, trustworthy, and informative.”
Charts: Scale
In creating both line graphs and bar charts, it's important to maintain a realistic scale. Take a look,
for instance, at the examples pictured. In the bar graph on the left, it appears that the violet scent
is three times as popular as the lemon scent. However, when we look at the scale, it goes from
5% to 15%. This unusual scale misrepresents the number of consumers who prefer lemon by mak-
ing 7% appear close to zero. On the right, the same data is presented on a 100-point scale, making
the relative popularity of the two scents more apparent—neither is anywhere near as popular as
chamomile!
FIGURE 12.3 Scale
Distorted Non-Distorted
Violet Lemon Violet Chamomile

Lemon
In addition, it's important to use consistent intervals. For example, you can label the gridsona
scale 1, 2, 3, 4,5, and so on, or 10, 20, 30, but don't jump from 1 to 5, then 5 to 10. This, again, creates an
inaccurate impression, even with clear labels.”! Bar and line graphs can present data in this decep-
tive manner, often by accident. It's critical to use realistic scales and intervals that present accurate
proportions when creating bar and line charts.
Tables
Tables are a fairly straightforward way of showing data. As an internal reporting tool for small sets
of data, they can be useful. Their precision, showing each datapoint with corresponding values,
makes them useful for small sets of critical data, such as weekly sales by store. In creating tables,
ensure that this level of precision is appropriate for what youre trying to convey. Good candidates
for tables include factual information where it's important to examine each instance with preci-
sion. For example, Jasminee's director of customer experience, Stephanie Gonzalez, looks at sales for
each of the company’s 120 stores monthly, in a table that includes the number of hours of training
the team at each store has, its square footage, the geographic area that it reaches, its product mix,
and the number of competing brick-and-mortar beauty retailers in the area. This data is a small
enough sample that it can be presented in a table. It is also the kind of data that needs to be exam-
ined individually—it would not help Stephanie to look at all stores on average, as she might in a
chart, since she wants specific dollar amounts for sales in each store and to be able to compare that
specific dollar amount to the exact number of training hours of the staff, precise location, and other
very specific data.
Be careful of presenting data in a table when that data could easily be aggregated. For example,
if Stephanie only wants to compare the amount of training associates in Vermont have had versus
the training levels in Michigan, she could easily view that data in a bar chart. You can use tables to
present specific information when you need to do a deep dive into it.
To make tables easy to read, use legible labels for columns and rows. Color can enhance the
readability of tables, especially shading that allows users to distinguish between headings or better
scan alternate rows. Organizing data is also critical in tables. For instance, you can alphabetize by
column or row heading, sort critical values from highest to lowest or vice versa, or group specific
categories together." Organization is key to helping readers understand tables, structuring infor-
mation in order to create effective meaning.
Narrative Techniques: Infographics, Mapping, and Visual

Storytelling
One of the hottest trends is “storytelling with data,” being able to use numbers to create a coherent
infographics
narrative. Using charts, tables, and infographics is important. However, being able to weave
Visualizations with a mix of
charts, tables, text, and together a story from images is more important. Using infographics is a growing trend in present-
illustrations to tell a longer ing information, one that marketers can make use of to communicate complex data stories.
data story.
Infographics are visuals with a mix of charts, tables, text, and illustrations to tell a longer data
story. For instance, the team at Jasminee created the infographic shown to explain what the quar-
terly social media data says about the brand's strategy. When creating infographics, some key tips
to make them more effective are:
+ Focus on a single topic. Infographics allow for in-depth exploration of important information;
avoid the temptation to put a range of topics into a single graphic. Instead, add amplifying data
points for a more nuanced story.
- Use consistent imagery throughout. Keep to the same colors, fonts, and design theme to main-
tain consistency.
355
+ Mix different visuals. Include graphics, charts, and illustrations as appropriate to tell the most
complete story. For instance, highlight changing data with line charts, call out key granular
data in a table, and enliven qualitative data with an illustration.
+ Use text sparingly to label, highlight, or explain.
Infographics bring data to life, telling a story that can convince stakeholders.
In addition to infographics, other techniques of visual storytelling can help marketers explain customer journey
and interpret data. Many standard visual techniques have been popular with marketers for years. maps
Customer journey maps can be presented in a range of styles. Like a flowchart or funnel visualiza- Detailed visualizations,
tion, they show the steps consumers take in their relationship with a brand. However, their purpose similar to but more
is much broader than the flowchart or even the funnel. The customer journey map showcases the extensive than a flowchart,
that illustrate actions taken
entire relationship of a customer with a brand, from before they are even aware of the brand all by a consumer in the
through the post-purchase period, including all years of a customer's relationship with a brand. process of engaging with a
brand or taking other
Qualitative data on customer segments can be presented as personas, or cards with fictional
actions, such as pricing.
biographies of a composite customer that brings a specific segment to life as an imaginary person
based on the characteristics of the segment. They also come in many standard formats. Other nar- personas
rative data storytelling graphics used in marketing include canvases, which map out key Cards with fictional
information such product positioning, often aligned with business framework; they include an biographies of a
empathy canvas, which helps map the emotional experience of using a product or service, the value composite customer that
brings a specific segment
proposition canvas, which maps the value a product brings to consumers, and the business model to life as an imaginary
canvas, which outlines the 4Ps as well as the larger business model for a product. person.
Once a marketing organization has created visuals that capture its data, that data often needs
canvases
to be collected in a single place to help the entire organization understand the big picture. When it
Detailed visualizations of
comes to organizing data visuals for action, as well as to serve as a coherent repository of informa-
key business strategies or
tion, most marketers create dashboards. concepts.
dashboards
Interactive, editable
12.9 Making Data Actionable:

visualizations that collect
data from one or many
sources into a single clear
Creating Dashboards view, specifically to help —

users understand
information clearly.
Few personnel at any level of an organization have the time to spend looking at raw data in order
to do their jobs. Think of marketing managers at busy startups. They may be writing blog posts,
managing social media, and creating videos, all while creating strategy to grow the emerging com-
pany. They don't have time each day to log into each social media channel and review analytics for
how well their posts are doing, then check their email marketing platform the analyze the latest
newsletter’s results, then head over to their video channel to check on the sentiment of the newest
comments. Yet, they need to know these metrics in order to make decisions about how to prioritize
their marketing and meet customers’ needs.
Their CEO may have even less time to look at metrics, yet has to know what marketing invest-
ments are delivering the best results. Enter dashboards. Dashboards collect data from one or many
sources into a single clear view, specifically to help users understand information clearly. Creating
dashboards is often a critical part of many data-driven marketer's jobs. In this section, we will learn
to
about the different purposes for which organizations build dashboards, as well as tips on how
create clear, effective visualizations of data for an organization.
Strategic Versus Tactical Dashboards

Earlier in the chapter, we met the team at Jasminee. They felt they were strong at descriptive ana-
lytics. That is, they were good at finding data to describe what is happening with their organization
or assessing the performance of past marketing campaigns. We also learned that it's not enough to
know that a campaign was successful. The value of data is in using it to make decisions about what
to do next.
When a dashboard simply shows the current state of marketing metrics, or summarizes the
performance of a campaign, it's a reporting dashboard. This type of dashboard is useful when you
just want to share the results of activities with a team or client, for instance. A reporting dash-
board often focuses on big-picture metrics, such as net revenue for a quarter, total clicks on an ad,
or cumulative open rates for a marketing automation campaign. Reporting dashboards can be built
for any type of marketing effort, from a specific channel, such as email, to a particular segment,
such as a brand's performance with Gen Z consumers.
Strategic marketing dashboards don't have one specific format. They may be a few simple
charts, as would be the case for a brand with limited product lines and marketing channels. Or they
may be a dozen or more charts for a complex business. The point is for the strategic dashboard to
provide information on a company’s overall marketing direction.
Let's take Jasminee as an example. The beauty brand is a fairly complex business, with more
than 400 products, wholesale and direct-to-consumer sales, and twenty-five marketing channels,
from a YouTube presence to marketing automation that sends email coupons to customers based
on their purchases. Their strategic dashboard is top-level, yet highly detailed. It outlines the con-
tribution of each marketing channel to the bottom line, from sales generated from YouTube to
assisted conversions from social media. It maps the performance of different product categories,
from lip color to skincare. It also tracks performance by product benefits, since it's a beauty com-
pany, comparing the sales of pollution-protection, skin-smoothing, and sensitive-skin lines across
all categories. Finally, it tracks the performance of the brand with different demographics: Gen X,
Gen Z, urban dwellers, rural customers, and more.
Strategic dashboards often start with common data points, such as sales attributed to specific
marketing channels, online traffic, engagement, and sentiment numbers, and the popularity of
different product categories. Jasminee, for instance, tracks its sales, digital channel engagement
metrics, and product performance. Tracking can be further customized, however, to measure any
data that's critical to a brand. For example, as we see with Jasminee, the company needs to know
the product benefits, such as anti-pollution or sensitive skin, that are selling the best. An automo-
tive company might need to know the popularity of hybrid versus internal-combustion vehicles for
planning and branding purposes. While the focus of a strategic dashboard is often revenue, what
revenue-impacting data is reported depends very much on the company’s product lines, industry,
and growth stage. A new company, for instance, may need to focus heavily on geographic growth as
it expands into new regions, while a mature company facing a competitive threat may need to focus
on Net Promoter Score and customer retention. Strategic dashboards are completely customizable.
They just need to report that information that the entire company needs to know in order to under-
stand a brand's current progress toward major organizational goals.""
By contrast, tactical dashboards, sometimes called operational dashboards, are tools to help
people managing the day-to-day. Tactical dashboards include reporting dashboards, as their main
function is to report information for regular use (although, to be clear, all dashboards report on
data). They can also include real-time monitoring dashboards, for instance, those that show incom-
ing social media messages. Any dashboard that helps manage routine marketing activity is a
tactical dashboard. What makes a reporting dashboard different from a tactical dashboard is often
simply the intent. A reporting dashboard is there to give a summary of what has happened in the
past. A tactical dashboard, on the other hand, is meant to be used as a day-to-day decision-mak-
357
ing tool.’(33] A tactical dashboard may present the specific metrics that teams working
hands-on in a
department will need to be able to do their jobs.
For example, Sally Chen, an email marketer at Jaminee, uses a tactical dashboard
that shows
open rates for the most recent quarter's worth of emails, broken down by the email type,
target seg-
ments, time of day, and audience demographics. The dashboard also shows the opens, clicks, and
other key metrics for each email sent in a month. This is much more data than the CMO needs;
indeed, only Sally reviews this data regularly, if at all.
They can use this data to inform their tactics as they build their next email campaign. They
may find, let's say, that emails sent on weekends have done better over the last three months, espe-
cially among millennial moms. In addition, “Buy one skincare product, get a makeup item free”
deals have done well, but 40% any item deals did even better. The average click-to-open rate for
those coupons was 22%, more than double the company's average of 9% and better than the “buy
one, get one” at 1%. Broken down by customer segment, millennial women with at least one child
at home redeemed the 40% off coupon in large numbers: The click to open rate in this segment was
37%, and the average order value (AOV) for those in the segment using the coupon was $140. A typ-
ical AOV for the brand is $85.
Based on this data, Sally decides to focus more on this loyal segment, sending them Jasminee's
best offers. They review the results of these emails each week, to confirm whether this new data-
driven strategy is working. In addition, they monitor the tactical dashboard focused on email daily,
looking for new trends on which they can base new email initiatives. As they see interesting data in
the dashboard, they will, at the very least, investigate it to determine whether there are new oppor-
tunities to which the data points. For instance, they may find in time that open rates are strongest
on weekends, but sales are strongest on Mondays. They may then decide to try focusing on sending
their best offers on Mondays to encourage more sales. Or they may track whether those who open
emails on weekends are the same customers who shop Mondays, meaning that sales tend to lag
promotional campaigns, and adjust their sales forecasting accordingly. Tactical dashboards allow
marketers to see the fullest range of data that will allow them to improve their efforts continuously.
A tactical dashboard offers marketers all the data they need to do their jobs. It’s typically more
comprehensive than a strategic dashboard, with a focus on information that hands-on teams need
to improve marketing activities down to the individual message level, such as the individual social
media or email newsletter. This tactical data changes day to day, so such dashboards need to be real-
time. Marketers tend to view them daily, to get the latest input to optimize their posts, campaigns,
and activities.
Often, a strategic dashboard and a tactical one vary only slightly. They may cover many of the
same basic metrics, with the strategic dashboard focusing on broader aspects of marketing, such as
the contribution of different channels to revenue, and the tactical dashboard breaking down those
channels into how they perform on the message or campaign level. The smaller the organization,
the more hands-on senior management often is, resulting in closer alignment between tactical and
strategic dashboards. In a larger organization, strategic dashboards may focus only on overall chan-
nel or segment performance, or even on only net sales by channel.
Tactical dashboards can be structured to show data on any area of focus. For instance, they
can show all data relevant to running a specific channel, as we saw in the example of Sally's email
work. They can also be configured to help decision-making across all channels, as may make sense
for Sally's boss, Steve Myers, the director of digital marketing, who oversees all online marketing
efforts. He may need to see data on email, social media, paid and organic search, display ads, video,
influencer campaigns, and more. A tactical dashboard for Steve may have less detail on each chan-
nel, but it will still have more detail than the strategic one used to assess the broader picture. Given
differ-
the broad scope of his responsibilities, it may run to several sections, each often set up as a
ent view or tab in the dashboard-building platform.
The benefit of tactical dashboards is that, like strategic ones, they have no set format. Tactical
should provide
dashboards are those that, remember, are there to help people do their jobs. They
to do their
data at the right level of detail to help people understand the information they need
work best. However, they can include any number of channels, present data at different levels of
detail, and be structured differently, depending on the users’ work needs.
Performance Dashboards
You may sometimes hear the term “performance dashboard.” While sometimes, the term may apply
to a tactical dashboard, it's also a specific type of reporting for some organizations. Performance
dashboards are defined as monitoring tools that show the current performance of systems within
an organization.
They can be mid-way between a strategic dashboard and a tactical one, showing the overall
results from all the latest marketing efforts. For instance, an organizational performance dash-
board could contain the open rates on the most recent campaign, the current social media reach for
the week, and the most recent sales.
What makes a performance dashboard different from a tactical dashboard is that it focuses
simply on performance. It shows the net results of activities rather than providing the more gran-
ular data on why marketing is producing the results it is. It looks at net social media likes, for
instance, but not at what times of day are best to post or what types of messages resonate most
with a specific demographic. What makes performance dashboards different from strategic dash-
boards is, again, the emphasis only on results rather than on reasons for those results. It’s less for
strategic or tactical decision-making and more for monitoring the current outcomes of key mar-
keting activities. Thus, in contrast with strategic dashboards, performance dashboards typically are
pulling in raw data in real time.
For many organizations, strategic and tactical dashboards are sufficient. Tactical staff monitor
data in real-time, while management checks in on marketing periodically for a big-picture view.
While not required, performance dashboards are often used in quickly changing situations, such
as when companies are exploring new marketing efforts, product launches, and in startup compa-
nies. They can also be used on the departmental level to monitor the group performance. As such,
they are most often used in sales organizations, where sales performance dashboards monitor cur-
rent conversions from leads to sales, gross sales, and sometimes the individual performance of each
team member.
Executive Dashboards
An executive dashboard provides an organization's leadership with the essential information they
need to understand an organization's marketing at the top level, including the return on a firm's
investment in marketing. Executive dashboards focus on key metrics of overall marketing per-
formance. They seldom go into more detail about specific channels than to show the overall
contribution of the channel to a brand's total sales or revenue, as well as the ROI of investments in
the channel.
Typically, an executive dashboard for marketing will report on net sales, revenue, and the per-
formance of key channels and the impact of campaigns across a longer time frame. They don't
generally report on the metrics of a specific ad, social media post, or other individual marketing
creative. The goal of executive dashboards is to show long-term trends and help leadership under-
stand the role of different channels and campaigns in driving revenue.
Some best practices for creating executive dashboards include the following:
+ Focus on revenue-generating activities. Keep the key charts centered on sales, revenue attrib-
utable to specific channels and campaigns, and a firm's total revenue from all campaigns.
359
° ees Show both the positive and less successful outcomes of marketing activities to
uild trust.
* Rely on readily comprehensible visuals, such as line graphs, which make it easy to see progress
toward marketing goals at a glance, rather than tables.
* Keep the size of the dashboard manageable. Up to five tabs or screens should be sufficient.
The chief goal of a marketing dashboard is to measure the ROI of marketing while providing a
topline analysis of overall marketing activities’ productivity. A high degree of granularity impedes,
rather than supports, its usefulness, so keep the focus where it matters, on the bottom line.
| _KPls for Digital Marketin

Evaluating Performance & Allocating Budget
12.10 Tools of Dashboard

Management and Data Visualization
Often, marketers can create effective visualizations using common tools. Spreadsheet applications
such as Excel or Google Sheets, presentation tools such as PowerPoint or Keynote, or drawing appli-
cations such as Illustrator allow users to create charts, tables, and more complex visualizations.
Many popular marketing tools themselves include a data visualization feature for the data created
within each tool. For instance, most social media management platforms, CRM systems, and other
marketing management tools include basic visualizations of the data that they produce. For more
complex data, such as information from a range of different sources, purpose-built data visualiza-
tion tools allow for powerful comparisons and presentations.
me
al “g
a template in
l Google Sheets
Integrated Tools
Most marketing analytics tools provide a range of visualizations built into the tools themselves.
From SproutSocial to the many popular web analytics tools, most platforms present the data they
collect in a graphical format. Tables and simple graphs, most often line graphs or pie charts, are the
typical output of marketing tools’ analytics features.
These integrated tools offer several advantages. For one thing, since they are often part of the
same tools used to manage the channel they measure, they present data side-by-side with the mar-
keting efforts being assessed. For instance, a marketer who posts a tweet via Hootsuite, a popular
social media management tool, can simply click on the tool's onboard analytics to see the results of
that tweet, including its resulting clicks, the geographic location of those engaging with a post, and
more. This convenience makes accountability easier. It also makes it simple for teams working on a
specific channel to see the results of their work quickly.
The drawbacks of these integrated tools, however, are several. First, the limited range of visu-
alizations means that data can only be presented in the few defaults available. Some tools, such as
HubSpot and Google Analytics, do offer some visualization options. However, the typical options
for presenting data visually are limited in type, style, color options, and file formats. For instance, a
tool may offer downloads only as a PDF, and not as images. Another may only create pie charts, and
only in pastel colors. This limits the usability of the reports.
Another challenge is the integration itself. While convenient for the teams doing both manage-
ment and reports, it can allow for greater access than is desirable. For example, if a team relies only
on their social media tool's analytics to report on their social media success, they may be tempted to
give access to the tool to other team members who just need the social media data, such as the con-
tent marketing manager. However, many tools don't allow for control over what a user can access,
so, in giving access to their data, they must also give access to the ability to post to social media
publicly.
Finally, the greatest challenge with integrated tools is that they can measure only the data they
produce. A social media tool's analytics only give us data on the social media channels that are
managed using the tool or, at best, on all of a brand's social media. A full marketing automation
suite, such as HubSpot or Marketo, will provide more comprehensive data, including all channels
and marketing efforts managed using the tools. Nonetheless, they may not include all data if third
parties or other marketing tools also control some elements of a brand's marketing. For example, a
brand may manage all of its social media, content marketing, advertising, email marketing, and cus-
361
tomer relationships using its marketing automation platform. However, the brand contract with an
agency for its SEO. That agency uses its own tools to measure SEO success, which are not integrated
with the CRM. In addition, the brand engages with an influencer marketing agency to manage
influencer relationships. While traffic from those influencers is measured using the marketing
automation tool’ analytics, not all of the influencer content is tracked, such as the engagement on
each influencer's posts.
These silos mean that brands seldom collect all of their vital data using a single platform.
Hence, they need a way to integrate all the data from their efforts into a single set of reports, to gain
a complete picture of their marketing efforts.
This doesn't mean that integrated tools aren't valuable. Their convenience means that teams
can easily access the data they need for day-to-day management. This data is essential for man-
aging channels, playing a key role in tactical decision-making. However, as brands become more
purposeful about analytics, they move to dedicated visualization tools.
Data Analytics and Visualization Tools

Often, the data a company needs to access lives in a range of different tools. Their email marketing
data may live within their CRM system, alongside data on customer purchases. Their social media
information is available attached to each social profile. Their ad data is provided by their advertis-
ing vendor. Yet, they need to look at all their data together in order to understand their marketing
completely. In addition, as discussed previously, the on-board data visualizations offered by mar-
keting tools are often limited. For this reason, many marketers turn to data visualization tools
specifically designed to present data from different sources. This allows marketers to better com-
pare the effects of different marketing efforts.
Data visualization tools offer marketers the best way to integrate data from multiple sources
for reporting. They offer more control over how data is presented visually, including a large range
of specialized charts and graphs. Typically, only dedicated visualization tools offer some charts that
can be very useful to marketers, such as Venn diagrams or scatter plots. Typically, brands rely on
specialists skilled in data visualization tools to present data using these platforms.
Marketers have two main options for creating powerful data visualizations: data tools, such as
Tableau and Google Data Studio, and programming languages for data processing, such as Python
and R.
=
8Bef Google Data Studio
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Data Visualization Platforms: Tableau, Data Studio, and

More
Two of the most popular data visualization that marketers need to know about are Google's Data
Studio product and Tableau. Google Data Studio, available free, allows marketers to gather data
from a range of sources, from popular Google tools, social media platforms, advertising vendors,
and CRM systems. The basic capabilities are without cost. Tools called connectors, which range in
cost from hundreds to thousands of dollars, are often needed to bring data from marketing plat-
forms into Data Studio, where it can be analyzed and presented.
Tableau is a popular tool that allows users to analyze and interpret data through visualizations.
Like Google Data Studio, it allows users to collect data from a range of sources and pull them into
a single repository. It also allows the user to create a wide range of visualizations, including Venn
diagrams, scatterplot charts, and tables. In addition to its popularity in business, it's often used in
academic settings, as well. While Tableau does require a subscription fee, it does require connectors
to access data from many sources.
There are many other paid tools in the market—however, many companies rely on the most
popular ones, as it's easier to find qualified staff who understand the complexities of these power-
ful applications. As a result, marketers who wish to strengthen their data-management skills often
focus on becoming proficient in either Google Data Studio or Tableau. As of this writing, Tableau
also offers certification exams that allow users to prove their proficiency.
Additional tools for visualization include PowerBI, which is focused entirely on the business
market, IBM SPSS, a statistical package popular in academic settings and business for decades,
TIBCO Spotfire, a powerful all-purpose analytics and AI tool, Domo, and Oracle Analytics Cloud,
which are also multipurpose tools. The landscape for data tools is ever-changing, so brands period-
ically evaluate their toolsets to ensure they have one that fits their analysis and reporting goals.
Data Analytics with Programming Tools
Many data scientists use multiple tools to store, process, and analyze data. The decision to use a par-
ticular tool is one that depends on the skillset of the team, the existing technologies used to store
an organizations data (for instance, it may already be in a SQL database), and the types of analy-
sis. While a marketing analytics expert typically does not need to know data science in a hands-on
way, it's important for data-driven marketers to understand the basic tools used by the data scien-
tists with whom they might collaborate. In this section, we'll learn about some of the most popular
programming languages used to analyze data. It's helpful to know the names of these languages in
order to communicate better with data science teams, as these are the tools of their trade.
The Python and R programming languages allow users to process and visualize data. The pri-
mary benefit of both programming languages is in actually processing complex datasets. Thus, few
teams would use R, for instance, only to create visualizations—dedicated tools such as Tableau are
available for visualization. However, if data analysis is already being performed using these lan-
guages, then it's possible to create effective visualizations using the same tools,"*
Python is a programming language used for a wide range of applications, including building
websites and managing databases. One of its many uses is data analytics. It can be used to clean,
process, and visualize data, including performing linear regression and probability func-
tions.®” Python is considered relatively easy to learn, even for those who have never coded before,
making it a popular, yet powerful choice among data analysts. It is especially popular for natural
language processing because of its strength in processing text data.
R is a programming language specifically for data analysis. It can be used for statistical analysis
as well as for data visualization. It is less popular for natural language processing, but very popular
for use in quantitative analysis. It can also be used to create interactive dashboards that can be
363
presented online.®* For quantitative analysis tasks, R is a natural fit. R is often used
for machine
learning.
Other programming languages used by data scientists when analyzing marketing data include
Structured Query Language (SQL). SQL was originally developed in the 1970s," while R and Python
were developed in the 1980s and 1990s respectively.“ SOL is a database tool, used very widely in
software that manages database-centered marketing tools such as CRM systems. Much data analy-
sis can be performed using SQL, including standard statistical analyses. An advantage of SOL is
that it is often also the language in which the database housing the data being analyzed is written.
This means that teams managing the database have the skillset to do the analysis.
Most data scientists use multiple programming languages, with the three we explored being
the most popular. According to research by the data science firm, Kaggle, more than 80% of data
scientists use Python, followed by SQL, used by 44% and R, used by 36%." There are many other
programs used to analyze data, used in specialized applications. Apache Hadoop, also simply called
Hadoop, is used to process extremely large datasets,” such as those for running advertising plat-
forms.“ C/C++ is, like Python, a multipurpose language that can be used to analyze text and
numbers,“ as is Java. Finally, JavaScript (a completely different language from Java with a similar
name) is a language used often in app and website development that can also process and present
data.
The data science landscape changes frequently. Marketers don't need to learn how to program,
although adding one or more of the above programming languages to their skillsets can increase
their career options. Understanding the role of programming in creating the reports, predictive
tools, and marketing automation on which we rely can empower marketers to communicate effec-
tively in an increasingly technology-driven marketing landscape.
12.11 A Closer Look: Can We Trust

the Numbers?
Life at Jasminee has been exciting these past few months. Thanks to their new predictive analytics
platform, double-digit sales growth has been the norm. Weekly marketing meetings are cause for
celebration, as the team reviews the increase in sales of most of their products, as well as positive
sentiment growing on all their social media channels, increases in social media followers and email
subscribers, and steady growth in their lifetime customer value.
However, although the news is undoubtedly good, some of the data is giving
Vice President of Creative Services Timothy Baker some pause. Tim, a prominent
beauty influencer himself, wonders at the Friday recap meeting about the predic-
tion that mango scented sunblock will be twice as popular as any other scent this
summer. “Sounds like a pretty confident prediction,” he notes. “Where did you get
the data to back that up?”
The team doesn't know. They contracted with an analytics firm to do their
predictive analytics once the data became too complex for them to handle in-
house. They are unsure of what data is being used to make the predictions, let
alone the algorithms used to make them. But they promise Tim they will find Source: Shutterstock.com
out.
After a quick call, the facts emerge: The analytics firm has been using simple correlation, find-
Mango
ing that the time of year positively correlated with strong sales of different fragrances.
the same time, so they believed that the same sales would
scents had sold well the previous year at
follow this year.
“But that's just not logical,” says Tim. “Last year, we only had the mango and two other scents.
Now, the fragrance options have expanded to eight. Mango was also new; we invested a lot into
promoting it on several channels. Those factors weren't accounted for in the data the firm used or
in the algorithm.” In this case, correlation was most assuredly not causation. Tim goes back to the
analytics firm to share more about how Jasminee's 4Ps, especially their promotional and product
mix, impacted sales last year. The firm realized that they needed to deal with many more data-
points in order to make realistic predictions, updating the mathematical methods they used to
make those predictions. The new predictive models suggested that, based on more complex factors
such as price, other available products, promotions, and competing products from other brands,
Freesia was likely to be the season's most in-demand choice. The predictions proved correct, leading
to higher sales with lower risk of having leftover inventory.
“It goes to show,” says Tim, “that we marketers need to understand a bit about how predictive
analytics works. That way, we can guide our quantitative whizzes with our industry knowledge,
and everyone wins.”
12.12 Do the Math: Bag-of-Words

Text analytics starts with transforming human writing into numbers, so that computers can ana-
lyze text. As we learned in this chapter, one of the ways in which computers analyze text is called
bag-of-words. In bag-of-words, the number of times a word appears in text is counted to determine
the themes in the text. It's a bit more complicated than just counting all the words in a document.
Let's see how it works. For our example, here is a short comment left on Jasminee's Instagram:
Jasminee Shower Scrub is the best! It leaves my skin soft. When will it be available in the
Tropical Mango scent?
We remove stop words, so we end up with:
Jasminee Shower Scrub best! Leaves skin soft. Will available Tropical Mango?
There are eleven distinct words in this comment.

Using bag-of-words, we break the comment up into sentences. Let's look at the first sentence:
Jasminee Shower Scrub best!
It has the words “Jasminee,” “Shower,” “Scrub,” and “best” once each and has zero mentions
of
the other words in the comment “will,” “available,” “Tropical,” or “Mango.”
365
So, translated to numbers, it looks like this:

Jasminee -1
Shower - 1
Scrub -1
Best -1
Will-o
Available - 0
Tropical - 0
Mango -o
Which is further simplified to:

(1, 1, 1,1, 0, O, O, Oo}
Now, you may not go commenting 1,1, 0,0 on your favorite brands’ social media, but this is now
something a computer can process.
To further simplify language, bag-of-words often relies on pairing words and counting the bigrams
pairs. Words appearing together such as “will available” are called bigrams; groups of three words
In text analytics, a pair of
are trigrams. These groups are then counted rather than individual terms. words that occur together
and are treated as a single
With these words counts, an NLP system can then identify the topic of an item of text. For item.
example, the NLP system Jasminee is using looked at all Instagram comments and identified one-
third of them as being about the shower scrub. Rather than reading through thousands of trigrams
comments the Jasminee social media team now knows what the buzz on social is about. They can In text analytics, three
then use this information to promote the right products. words that occur together
and are treated as a single
item.
12.13 Conclusion
As data companies have access to more data than ever, big data is a critical aspect of marketing
decision-making. To handle the large volume of data, brands turn increasingly to data mining
to understand large datasets. In the move to data mining, machine learning plays a critical role,
enabling predictive analytics. Machine learning in a marketing context is the use of computers to
identify patterns in data and predict marketing-critical information, such as consumer behavior.
The use of machine learning and predictive analytics allows marketers to understand patterns bet-
ter than ever before. Machine learning can be supervised, depending on a training dataset that is
identified as typical data by the marketing team, or unsupervised, in which the machine learning
algorithm learns to see patterns on its own, without examples supplied. Regardless of whether it is
supervised or unsupervised, machine learning uses algorithms, methods of finding answers, that
often depend on standard statistics, including centuries-old concepts. Regression analysis and clas-
sification are common statistical methods used in machine learning. Both can be done using Bayes’
Theorem, which provides continuously updated estimations of probability rather than definitive
answers.
Text analytics is particularly important in marketing. It analyzes large volumes of text to iden-
tify patterns such as consumer needs. Sentiment analysis is a key application of text analytics. Text
analytics can use simple models such as bag-of-words or more complex methods such as TF-IDF.
With the proliferation of complex data, visualizations are increasingly critical. Creating charts,
tables, and infographics has long been important in marketing. Now, building dashboards, which
combine data visualizations from multiple sources, often with real-time data feeds, is a vital way to
communicate to both marketing and management stakeholders. Tools such as Tableau and Google
Data Studio enable marketers to build strategic and tactical reports. Analysts also increasingly rely
on programming tools such as R and Python. In all data visualization, accuracy is key. Using color,
scale, and labels, as well as selecting appropriate formats, are all essential to ensuring that data is
communicated clearly and is trustworthy.
1. What is the difference between data mining and predictive analytics?

2. What are some of the challenges a company might have in creating an accurate predictive
model if they do not clean it appropriately?
3. Distinguish between supervised and unsupervised machine learning. When might you use
one or the other in a specific application?
4. What are some of the main differences between regression models and classification mod-
els? When would you use one or the other?
5. What is Bayesian statistics? Why is it popular in marketing analytics applications? What are
its benefits?
6. What is the difference between rules-based and machine-learning based sentiment analysis?
Is one better than the other? Why?
7. Why is machine-learning based sentiment analysis said to be “trained”? How does this train-
ing work?
8. You’re the social media manager for ClassCo, a new company that helps students select
courses that fit their learning styles. Your signature product has been out in the market for
a year; you want to know what students in different geographic areas think about your app.
You decide to use text analytics to look for trends in social media buzz about your product.
What techniques would you use? Why? Explain your reasoning.
9. Your initial text analytics-based analysis was inconclusive. Clear trends did not emerge about
what key benefits students derived from the product. You did determine that sentiment is
slightly positive toward your brand. What are your next steps?
10. Name five different types of charts and explain briefly how you would use each one.
11. Why is scale important in creating charts?
12. As the social media manager of ClassCo, you want to create a presentation, reporting on the
past year’s social media growth. Here is the data you have: the number of followers at the
beginning and end of the year for each channel, the demographics prevalent on each social
media channel, your top posts on each channel for each month and the entire year, reach,
engagement sentiment, and top influencers mentioning you on each channel. How would
you present this data graphically? What types of charts and tables would be appropriate for
each data type? Explain your reasons.
13. What are some of the main considerations when creating an infographic? What are some
things for which we should watch out when turning data into a comprehensive infographic?
14, What are some of the advantages of using the integrated analytics available within a market-
ing platform? What are the main drawbacks?
15. You are the CMO of ClassCo. You want to know which marketing channels, especially those
that are paid versus those that are free, are working to drive traffic, generate revenue, and
create brand awareness. You don’t need to see the exact data for every social media post,
ad, or email, but you do want a lot of data on how specific channels are performing. You also
want to monitor consumer sentiment for your brand. What type of dashboard do you need?
16. Going back to question 15, create a dashboard based on the mini case study outlined in the
question. Draft a dashboard, using a graphic design or presentation software of your choice,
that presents the data outlined in question 12, meeting the goals detailed, as well.
17. Name three important functions of an executive dashboard.
18. What is meant by a tactical dashboard? How does it differ from a strategic dashboard?
367
19. What are some of the benefits of using the anal ytics functionalities integrated with marketing
tools? What are some of the limitations?
20. You have joined ClassCo as their first analytics manager. You have a limited budget for soft-
ware. You need to gather data from a wide range of sources, presenting them together
visually to explain how marketing is contributing to revenue. Right now, you use a marketing
automation platform, PPC tools such as Bing Ads, and a separate social media management
platform. Are these tools enough to also help you with your analytics? What tools would you
use to gather data and present it?
21. Name two of the most popular dedicated data visualization tools. Are they both free?
22. True or false: Python and C/C++ are programming languages used solely for data analysis.
23. Foreman, John. “Optimum Email Send Times.” Mailchimp, 2021.

https://mailchimp.com/resources/insights-from-mailchimps-send-time-
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24. Oetting, Jami. “Data Visualization 101: How to Choose the Right Chart
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https://www.kdnuggets.com/201 6/1 2/data-science-basics-types-pat-
https://chartio.com/learn/charts/what-is-a-scatter-plot/; “Heat Map
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. Pratt & Fruhlinger, “Business Intelligence” Worcester Business Journal. guide/standard-charts/heat-map-chart.
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. Hao, Karen. “What Is Machine Learning?” MIT Technology Review, April 5, 30. Malhotra, Anuj. “9 Quick Steps to Turn Shabby PowerPoint Tables into
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machine-learning-we-drew-you-another-flowchart/. https://www.-slideteam.net/blog/steps-to-turn-shabby-powerpoint-tables-
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replace-marketers-heres-why. folio.com/choosing-the-right-dashboard-report.
. Ibid. 32. Ibid.
. lriondo, Roberto. “Machine Learning (ML) vs. Artificial Intelligence (Al)
-Cru- 33. “Tactical Dashboards.” Business Intelligence Dashboards, accessed May
cial Differences.” Medium, April 2, 2021. https://pub.towardsai.net/dif- 14, 2021, https://www.bidashboard.org/types/tactical.html; Hennel, Pat.
ferences-between-ai-and-machine-learning-and-why-it-mat- “What's Your Dashboard ‘Type?" Intelligent Enterprise, 2020.
ters-1255b182fc6. https://www.silvon.com/blog/whats-your-dashboard-type/.
. Ibid. 34. “Performance Dashboard Examples.” InetSoft Technology, 2021.
. Hardesty, Larry. “Explained: Neural Networks.” Massachusetts Institute of https://www.inetsoft.com/info/performance_dashboard_examples/;
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networks-deep-learning-041 4. agement.” Datapine, October 28, 2020. https://www.datapine.com/blog/
. Gimenez, Leo. “6 Steps for Data Cleaning and Why It Matters.” Geotab, performance-dashboard-examples/.
October 20, 2020. https://www.geotab.com/blog/data-cleaning/. 35. “Choosing the Right Dashboard Report.” Klipfolio, 2021. https://www.klip-
12. Elgabry, Omar. “The Ultimate Guide to Data Cleaning.” Medium, March 2, folio.com/choosing-the-right-dashboard-report.
2019. https://towardsdatascience.com/the-ultimate-guide-to-data-clean- . “Choosing Python or R for Data Analysis? An Infographic.” DataCamp,
ing-3969843991 d4. January 9, 2020. https://www.datacamp.com/community/tutorials/r-or-
13. Salian, Isha. “NVIDIA Blog: Supervised vs. Unsupervised Learning.” python-for-data-analysis.
NVDIA, August 20, 2019. https://ologs.nvidia.com/blog/2018/08/02/ . “Welcome to Python.org.” Python, 2021. https://www.python.org/.
supervised-unsupervised-learning/. . RStudio, PBC. Shiny, 2021. https://shiny.rstudio.com/.
. Horgan, John. “Bayes’s Theorem: What's the Big Deal?” Scientific Amer- . “History of SQL.” Oracle, July 10, 2005. https://docs.oracle.com/cd/
ican, January 4, 2016. https://blogs.scientificamerican.com/cross-check/ B19306_01/server.102/614200/intro001 .htm.
bayes-s-theorem-what-s-the-big-deal/. . Smith, David. “The History of R (Updated for 2020).” Revolutions, July
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Machine Learning Mastery, August 19, 2020. https://machinelearningmas- updated-for-2020.html; Geeks for Geeks. “History of Python.” Geeks-
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16. Brenner, Michael. “Artificial Neural Networks: What Every Marketer Should python/.
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fa946d1 10825. 43. Nori, Sameer. “Hadoop in Advertising: How Big Data Helps Make Smart
18. Ibid. Decisions.” SmartData Collective, October 27, 2014. https://www.smart-
19. Fueyo, Enrique. “WTF Is TF-IDF?” KDnuggets, August 2018. datacollective.com/hadoop-advertising-how-big-data-helps-make-smart-
https://www.kdnuggets.com/201 8/08/wtf-tf-idf. html. decisions/.
20. https://www.lexalytics.com/technology/sentiment-analysis 44. Fontana, Cristiano L. “Using C and C++ for Data Science.” Open-
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21. Dorash, Maryna. “Machine Learning vs. Rule Based Systems in NLP.”
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Medium, December
machine-learning-vs-rule-based-systems-in-nlp-5476de53c3b8.
22. Vashishta, Vin. “Predictive Analytics for Pricing Strategy: Why & How for
Non-Data Scientists,” April 25, 2015. https://www.linkedin.com/pulse/pre-
dictive-analytics-pricing-strategy-why-how-vin-vashishta.
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Index
average response time coding
319 142, 164, 261, 282, 287-288, 296
bag-of-words competition
343-344, 364-365 11, 65, 75, 81, 98-100, 115, 119-120,
124-146, 181, 202, 221, 263-265, 270
bar chart
350-354 confidence interval
288-290, 294-296
Bayesian probability
338-339 confidence level
290, 296
behavioral segments
4Ps of marketing
186, 190 conjoint analysis
10, 15, 36, 239 136-140, 281
benchmarking
audience convenience sample
56, 100, 119, 129, 135-140, 183, 206, 263
143-144, 150-151, 168, 253, 271, 307 267 271
A/B testing big data conversion
29, 178, 193-195 60-63, 75, 82-84, 287, 328, 338, 365-367 6, 25-38, 54-60, 85, 89, 98-99, 105-117,
187, 142-148, 154-161, 169, 177, 181,
absolute top impression share bigrams 187-191, 207-236, 245-251, 255-258,
98 865 304-311, 316, 324-325, 351
acquisition channels binary classification model conversion opportunities

210, 225, 230-232 340 30, 255
acquisition data bounce rate conversion path report

57, 211, 220, 225-226 178-180, 198-201, 209-210, 225, 232, 212, 230
254-255
advertising networks conversion rates
63 brand image 29; 54-67, 105; 1110) 137, 155, 16l tae
269 207, 218, 223-224, 249, 258, 304-310,
affiliates 316
210, 241 brand recall (aided or unaided recall)
269 converted
affinity categories 105, 138, 172, 191, 204, 281-2382
252-254 brand trust
269-270 cost per acquisition
aggregate comment volume 96
147 business-to-business (B2B)
69-70 cost per click (CPC)
algorithms 95
17, 63, 72-73, 85, 101 MITS=1I16,-152 e653; buy-to-detail rate
235, 330-335, 347, 363-365 241, 257 cost per mille
96
analysis paralysis canvases
355 cost per view (CPV)
18, 36
Sad
announcements cart-to-detail rate
DAT, 251 coverage bias
134, 172
Oe
annual report churn rate
182, 198, 315, 325 crash rate
121-123
820,825
Apdex score classification model
340, 346 cross-device tracking
320
161, 206, 244-245
assisted conversion classification predictive modeling
curated-content
154, 161, 169, 234 340
146
attribution modeling click rate
customer acquisition
55-56, 142, 161, 234-235 174-175, 198
207, 224-226, 240
attribution models click-through rate (CTR)
customer discovery
234 30, 38, 131, 156, 800-301, 305-310,
324-325 259-264
average order value (AOV)
54, 240, 357
customer experience research email service providers (ESPs) heatmap
262 42 221, 350-352
customer journey engagement hit

60, 87, 108-109, 117, 172-173, 224-227, 13, 27-28, 128, 132, 141-147, 151-154, 5, 10-11, 37, 41, 80, 165, 205, 225, 300
232, 243-246, 256, 285, 327, 352-355 159-160, 165, 169, 175, 180-183, 187,
191, 197-201, 208, 212-219, 224, hits
customer journey mapping 238-236, 243, 250, 255-256, 260, 274, 10-11, 37, 205
108-109, 232, 246 297-326, 356, 361, 366
immediate conversion
customer journey maps external data 146
108, 327, 355 9, 40, 61-73, 77-87, 102, 1383, 263
impressions
customer journey messages false negative 34, 91, 98, 118, 155-156, 160, 166-169,
172-178 269 224, 282, 300-301, 305-311, 324-325
customer lifetime value (CLV) false positives impressions click-through rate

54, 106, 190 269 300-301, 305-308, 325
customer personas first-party data in-app conversions

253, 284-285 69 316, 325
customer relationship management first-touch in-app offer redemptions

system (CRM) 146 316-317
43, 189
flowchart in-app purchases
daily active users (DAU) 249, 351-355, 367 318-317, 324
314
focus groups in-market segments
dashboards 12, 110-112, 146-148, 153, 162-165, 253-254
6, 17, 106, 150, 158, 173, 300, 327-367 259-268, 281-286, 294
inbound links
data audit forward rate 88-92, 100-101, 108-110, 114-117,
49-58, 59 176 129-132
data brokers funnel infographics

6, 67-68, 120, 127, 189 6, 26-37, 41, 57-60, 85, 116-117, 145, 6, 52, 326-327, 348-349, 354-355, 365
216-220, 227-229, 233-236, 242, 251,
dayparting 256-258, 351-355 information architecture (IA)
148 249
funnel charts
demographic information 351-352 instrument
149, 275 177, 269, 274
funnel metrics
dependent or response variable 41, 57-60 integrated campaigns
337 108
gamification
direct mail 313, 321 internal data
61-84, 107, 188 39-83, 88
geotarget
direct traffic 207 key performance indicators (KPIs)
210-212, 225, 231, 244 9, 28, 109, 195, 228, 297
goal flows
director of marketing 229-230 Keyword Tool
17 34, 65, 71-72
goals
donut chart 6, 10, 16-22, 37, 41, 52, 57-61, 66, 79, 84, landing page
350, 367 101, 115, 120, 185, 1389-141, 147, 157, 33, 95-97, 153, 220, 224, 229, 256
161, 168, 176, 187, 192, 201, 206-207,
drop-off time 218-218, 224-229, 251, 255, 261, 270, lead
308, 324 274, 299, 306, 312-315, 330, 356-362, 16-18, 29-31, 37, 43-52, 58, 69-73, 78-82,
366 98-99, 106, 148-148, 154, 172-173, 177,
earned actions
190-191, 197, 209, 213, 220-224, 234,
810-311, 325 Google Analytics
246-253, 257, 269, 274, 286, 311, 351
5-6, 11, 34, 39-43, 56, 60, 88, 106-109,
email marketing 1385-137, 154, 161, 167-170, 202-208, lead generation (lead gen)
19, 40-42, 51-53, 60, 112, 135-140, 214-218, 224-226, 233, 237, 243-244, 251
171-188, 193-200, 273, 333, 347, 248-253, 258, 320, 360
352-355, 360-361 lead nurturing
172, 194
leading micro-conversion patent
1, 7-10, 18, 26, 30, 49, 59, 81, 110, 26, 30, 37, 810 74, 120-122, 128, 1389
114-115, 120-121, 125, 133, 144, 156,
VOW 1671 75181, 202821 Seonize monthly active users (MAU) path length
229-235, 246, 262, 272-274, 284, 814, 325 235-237, 257
294-295, 364
multichannel attribution pay-per-click (PPC)
line graphs
56, 233, 3804, 325 86, 301
350-354, 359-360
multichannel conversion visualizer personally identifiable information (PIl)
linear regression
288 61
322, 337, 351, 362
multichannel conversions personas
list
233 190, 253, 284-285, 355
15, 21, 29-30, 42, 48, 62, 67-73, 80,
90-91, 98, 110-114, 125-128, 139, multitouch attribution pie chart
151-154, 171, 176-188, 193-199, 213, 55-60, 142, 227, 233, 256 114, 350-353, 360
223, 268, 269-273, 281, 291, 310, 333,
340, 347-349 multitouch conversions play rate
208 297-300
list hygiene
179-180, 186 multivariate regression population specification error
337-338 272-273
long tail
102-103 multivariate testing PPC advertising
6, 29, 37, 158, 193-198 71, 96
machine learning
6, 17, 63, 162-163, 168-169, 235, natural language processing predictive models
287-288, 330-347, 363-367 163, 168, 328, 342-344, 362 106, 330-334, 346-347, 364
machine-learning (ML) sentiment Net Promoter Score® (NPS) predictive variable

analysis 266 337
346
neural networks preprocessing
market measurement
CICVECH SECl oYA 170; 843) 367
261-268, 275-276, 295
newsletters price sensitive
market research 12,26, 137, li7 1-172 239
5, 73-76, 115, 119, 125-126, 134-140,
222, 259-264, 268-278, 278, 283-288, Nielsen Designated Market Area primary data
292-296 fa 124
market research for marketing non-probability methods probability distribution

264 271 339
marketing automation non-response error probability methods

44-45, 106-109, 171-176, 184-191, oe 271, 3389
197-200, 211, 238, 299, 330-333, 356,
360-363, 367 open rate profit margin
173-178, 185-186, 193, 198, 357 47, 196
marketing funnel
26-33, 37, 41, 85, 116-117 optimize psychographic information
15-20, 29-31, 58, 59, 79, 95, 99-100, 67, 149, 320
marketing manager 152-153, 176, 184, 201, 211, 218-221,
17, 48-51, 72, 140, 149, 225, 251, 360 229, 233, 242, 251, 256-257, 262, 270, publicly traded
284, 301-308, 328-329, 357 121
marketing optimization
6, 29, 38 organic search QR (quick response)
32-34, 72-78, 78, 82-89, 98, 105-109, 815
marketing technology stack 116-117, 131-184, 210, 220, 231-285,
250 247, 260, 301, 357 qualifying questions
275-276
mentions outliers
42, 76, 91, 110, 124, 128, 148-151, 118, 290, 295 qualitative data
457-158, 169, 194-195, 288, 364 11-13, 37, 45, 61, 115, 125, 142-145, 181,
pageview 259-262, 282-288, 303, 355
metadata 209, 214
90-93, 100, 106-107, 115, 301 Quality Score (QS)
panel 95
167, 271, 296
quantitative data second-party data supervised learning
11-18, 37, 220, 283-286, 334 69 335-336
random sampling secondary research survey fatigue

278, 296 263-264 125, 274, 296
re-engagement rate segmentation systematic sampling

183, 198 180-181, 186, 190, 198, 212-220, 271
262-266, 318
reach third-party cookies
7, 18, 32, 39-42, 52, 58, 62-70, 76-80, selection error 61-68, 77, 82
89-92, 108-110, 129-135, 144-158, 272-278
166-170, 186-189, 195, 207, 216, 243, third-party data
249, 261, 271, 276, 301, 805-311, sentiment 69, 139
826-327, 358, 366 6, 13, 43-46, 101, 110, 124-128, 134,
138-148, 147-151, 159-170, 181, 265-270, time lag
referral link 274, 279-285, 301-307, 311, 324, 235-286, 257
281-235 343-346, 355-356, 363-367
tokenization
referral traffic sentiment analysis 343
ZIONZSoACoS 6, 13, 48-46, 110, 127-128, 141-142, 147,
161-170, 270, 303, 345-346, 365-366 top impression share
regression analysis 98
160, 337-338, 365 sessions metric
58, 205-206, 315, 319-325 top-of-mind awareness
replicated 143, 269, 295
290 share
11-18, 26, 42, 46, 50, 58, 77-79, 98, topline metrics
retargeting 128-134, 148-150, 155-157, 165, 169, 41,57
236-237, 251, 257, 328 187, 192, 219, 226, 240-242, 260-263,
267, 274, 281-286, 315, 322, 356, 364 total addressable market (TAM)
retargeting ads 81
236, 328 share of voice (SOV)
42, 156 touches or touchpoints
retention rate 56, 283, 304
302, 314-315, 325-326 share of wallet
79, 240, 315 trade magazines or trade journals
return on ad spend (ROAS) 74
24 short tail
102-103 training dataset
return on investment (ROI) 335, 340, 365
22, 47, 57, 89; 171, 291, 297, 325 siloed
17-18, 37, 50 transactional emails
rules-based sentiment analysis 172-174
345-346 site speed
93, 117, 246 trend line
sample 350-351
8, 27, 32, 188, 195, 259, 263, 269-278, skip logic
286-294, 354 274 triggers
34, 96, 171, 179, 189-192, 197-198, 309
sample frame error social listening
272-273 149-152, 157, 169-170 trigrams
3865
sampling spam
271-274, 285, 290, 294-296 62, 84, 157, 163-164, 177-180, 197-200 univariate regression
337-339
sampling error (sampling bias) standard deviation
272-274, 290, 295 288-295 unsubscribe
177-188, 198-200
scatterplot stemming or lemmatization
850-352, 362 344 unsupervised learning
327, 335-336, 341, 367
search engine marketing (SEM) stop word removal
86 343 upselling and cross-selling behaviors
317
search engine optimization (SEO) strata
34, 57, 85, 180, 232 273 usage and attitudes (U&A)
268
search engine results pages (SERPs) stratified sampling
73, 88 271-273
user experience (UX) viewers web analytics
41, 230 148, 148, 209, 213-214, 239, 298-310 1,5, 11, 19, 28, 40-43, 47, 53, 57-59, 78,
129, 137, 142, 154, 161, 181, 201-206,
user experience (UX) metrics views 210-229, 287, 242-251, 256-260, 291,
4 12, 19, 45, 68, 78, 96, 127, 148, 154-160, 299, 304, 318, 350-351, 360
169, 183, 189, 222, 280, 255-260,
Venn diagram 268-269, 274, 283-286, 294, 300-314, 322 web analytics data
238, 350-351, 361-362 41-43, 47, 57-59, 78, 181, 202-206,
visit 224-229, 248-251, 256, 260
video ads 11, 27-34, 41-44, 54, 63, 72, 77, 88-90,
297-298, 308-311, 324 96, 109, 129, 145-149, 154, 161, 185, weighted total engagement
190-191, 201, 205-236, 244-255, 299, 322
video content 305, 310-312, 316-317, 328, 339, 346
297-304, 308, 324
visualization
viewability rate (VR) OnZOp 4 150) 16n 2116-2175, 227-261,
309 236, 241, 256, 327-367
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Marketing Analytics

© 2022 by Boston Academic Publishing, Inc. d.b.a. Flat World

About the Author

SeotyienA pnitetieM ei isctvW r sige

About the Author

Chapter 1 What Is Marketing Analytics?

2.3 Conducting an Internal Data Audit 49

AO Questions for Further Study 59

Chapter 3 From Direct Mail to Ad Platforms: Supplementing Internal Data with 61

Chapter 4 The Data Engine of Search 85

4.1 The Data Engine of Search 86

Chapter 5 Understanding Your Landscape 119

5.1 Traditional Sources of Competitive Data 120

5.3 Digital Sources of Competitive Data 127

5.4 A Closer Look: Launching a New Product 131

5.5 Industry Data 132

Analyst Reports 133

Using Benchmarking Data 135

5.7 Do the Math: Conjoint Analysis 137

5.8 Conclusion 139

5.9 Questions for Further Study 139

5.10 Endnotes 140

ree Basic Email and Marketing Automation Techniques 171

Chapter 8 Measuring the Web’s Data 201

8.6 Content Data 218

Top Pages by Pageviews 218

Top Landing and Exit Pages 219

Sault Endnotes 226

9.2 Advanced Conversion Metrics 228

Chapter 10 Offline Research Matters, Even in an Online World 259

1034 Surveying Consumers to Learn Their Preferences 260

Chapter11 The Engagement Economy 297

tha Understanding Video Metrics 298

11.5 Mobile App Metrics 312

1252 A Closer Look: The Next Must-Have Product? 328

12.3 Data Mining and Predictive Analytics in Marketing 331

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Marketing News Resources

By the end of this chapter, you will be able to:

1.1 Marketing Analytics: More Than

From Campaign Measurement to Marketing

A Brief History of Analytics

Quantitative and Qualitative Data

1.2 A Closer Look: LuxeUnique

FIGURE 1.2 Analytics Activities in a Typical Week for a Business Marketer

Set up focus group

Conduct customer survey

Conduct industry analysis

Conduct sentiment analysis

Analyze the reach of social media messaging

Evaluate website metrics

Analyze sales, consumer, and other related

1.3 Analytics and the 4Ps

FIGURE 1.3 The 4Ps

marketing analyst is among the most critical jobs in marketing today,

Who Does Analytics?

also the person measuring the results.