Class 20: Web

Analytics

Przemyslaw Jeziorski
Haas School of Business
Agenda

1. Introduction to web-analytics
2. Overview of tools
3. Metrics in web-analytics
4. A/B testing
5. Campaign evaluation
6. Campaign evaluation in sponsored search auctions
Web analytics

- Click-stream - Entry point

- Event-stream - Exit point

- Dwell times - Individual

characteristics
- Conversions
- Past behavior
(session, life-time)

How it might it be used for a firm’s advantage?

Dashboards
Funnel tracking
Voice of consumer

- Live surveys
integrated into the
webpage

- End-to-end research
design

- API access

- Integration with CRM

Data collection

- Invisible sniplets of code on the website called Tags

- Tags collect the data on any event on the website and send to the cloud

- Examples:
• Google analytics tag
• Adwords tag
• Statcounter.com tag

- Once the tag is in place you can control the data collection using a web
interface – no need for IT involvement

- Tags can leave cookies on the customers’ computers

- Most of the web analytics tools enable uploading off-line behavior

Metrics

- Number of sessions (visitors)

- Number of unique visitors

- Time spent on the webpage (dwell time)

- Bounce rate

- Conversions
Unique visitors
- Visitor = website session (usually 30 minutes)

- After 30minutes the session is considered abandoned

- Abandoned session that reactivates is a new visitor

- Unique visitor metric does not double count abandoned sessions

- Which is better? Why?

Metric (3 months of data) Jeziorski.me

Visitors 5,432
- Daily unique visitors
Daily unique visitors 2,421
- Monthly unique visitors Monthly unique visitors 2,074
Unique visitors 1,523
Dwell time

1.5s 3.0s
Dwell time = 5.5s

- Time between first and last action on the webpage

- Cannot be measure for single-action sessions

- Pros?

- Cons?
Bounce rate

- Percentage of single action sessions

- What does it mean?

Conversions

- Desirable actions

- Examples:
• Purchases
• Creating an account
• Mailing list sing-ups
• Downloads

- Conversion value: cash-flow or profit from the

conversion
A/B testing
Purchase funnel
Consumer decision making process

Event

Event

Event

Event
Sponsored search auctions
- Ads are displayed in ad-slots from the best (above organic search and top
slots on the right-hand side) to the worst

- Ads are sold in on-line auctions

- You bid how much you want to pay per click

- There is a separate auction for each search keyword

- Bids are weighted by the proprietary quality score to obtain weighted bids

- Consumers with the higher weighted bid is allocated a higher slot

- Consumers pay the bid of the bidder below them (fairly complicated, but
should induce you to bid close to your value of the click – think eBay proxy
bidding!)

https://support.google.com/adwords/answer/2996564?hl=en
- It is possible to exclude yourself from certain impressions, for example:
male/female, zipcode, etc…
Statistical power problem

- Problem 1: Individual level sales are very volatile

- Finding impact of volatile event is challenging

- Problem 2: A/B test change advertising on the margin

- Marginal changes in advertising should have close to zero ROI

because of:

- Diminishing returns (advertising budgets increase until effective

ROI is zero)

- Small impact overall

- Require large changes in advertising

Robust campaign evaluation

- Individual level randomization is less useful

- Use diff-in-diff or synthetic control evaluation with larger policy

changes

- Exclude yourself from the impressions in a particular geographic

location and use it as a control group

- Another possibility is cross-channel control group (see next).

- 3 variables
• Conversion
• Campaign: 1 if came from the ad, 0 otherwise
• Region: 1 if in the region where the ad was displayed, 0 otherwise
Ebay experiment

Source: Blake at al (2014)

Summary

Web analytics enables better sales funnel tracking

Easy to perform A/B testing and randomizing at the individual level

Requires specialized software and knowing the metrics

Beware of the conversion problem