Occam's Razor by Avinash Kaushik

Ten Minutes With….. is a new series where occasionally I’ll interview interesting people on the topic of Web Decision Making. With my questions I am hoping to get to know the interviewee a bit better, for them to share thoughts about their company/work and finally glean insights that might be helpful to all of us in the industry.  I hope you’ll enjoy the series.

My first interview is with someone I find extremely interesting: Matt Belkin. Matt’s the VP for Best Practices for Omniture Inc. Most recently I met Matt at the Emetrics summit in Santa Barbara and I am always struck by his passion for our space, a passion that is contagious.

Those of us who participate in the Web Analytics Yahoo Group are quite familiar with Matt, he is an active contributor to the forum, jumping in to help out with all questions Omniture or opine on industry trends or occasionally shake things up (which I have to admit I enjoy tremendously). 

To me Matt is very much Omniture personified. You’ll find Matt’s blog on my blog roll or at www.omniture.com/blog.

I want to profusely thank Matt for graciously participating in the discussion and I hope like me you will benefit from the wisdom in Matt’s perspectives below.

1. How do you make yourself indispensable to a company?

I've been most successful by focusing my attention and efforts on initiatives that were strategically important for the company, and not being afraid to test the status quo. I'm constantly thinking of new ways to improve our products and services, and I'm always thinking in terms of the customer. This is a fundamental part of my DNA – I really couldn't change it if I wanted to. I think this, more than anything else, has been key to my success.

2. What are some examples of activities and surroundings that motivate you?

I love talking to people that are really passionate. It doesn't necessarily matter what subject they are passionate about, rather that they care that much about a topic. I am often amazed by the things you can learn from people that have no obvious connection to web analytics or the online marketing industry in general.

3. What did you really love about your last job?

The people. I worked at Macromedia and was lucky to work with some of the most creative and innovative folks I've ever known.

4. What is Omniture's biggest strategic strength?

Our people. So yes, if it's not obvious, I put a lot of stock in people. They are the lifeblood of your organization. You can't predict the future, competition will change, customers will evolve, new technologies will emerge – but with the right people, you can always adapt to this new dynamic landscape. In my opinion, that's the biggest strategic strength a company can ever have.

5. What is Omniture's biggest challenge, looking into the future?

I'd say there are two challenges: attracting and retaining the right people, and execution. We've done a phenomenal job on both fronts and just need to keep that momentum.

6. Omniture has great people and whether I meet them in London or SFO they seem to have the same type of energy, passion and drive. Could you share what you look for in Omniture employees?

Great question! I think many hiring managers make the mistake of looking for people with deep experience in the role you are hiring for, as opposed to understanding the candidate for who they are. I always look for people with passion, intelligence, and hunger for success.

The hunger piece is really important to me. I'll always hire a younger, less experienced candidate who is hungry for success than someone who has years of experience but is not really driven and passionate.

7. On my blog I talk about the challenge with the mass of metrics available in our tools, what is the analysis that you most wish Omniture customers did but something that most don't?

Ooo, tough question – there are so many possibilities. If you'd permit me, I'd actually like to address the question somewhat differently. I'm less concerned with the analysis that customer are not doing. Rather, I'm most concerned with the lack of action that results from the analysis itself.

I've been in many organizations where they torture their data constantly – which isn't such a bad thing if they'd actually take action from it. So if there was one challenge I encourage companies to address, it's applying their newfound knowledge to improve their business.

I think vendors have equal responsibility in helping customers do this, which is why the Omniture Best Practices group was founded in the first place.

8. There is a lot of hype around search engine marketing, typically we all measure conversion by key phrases or overall conversion. What other insightful analysis examples have you seen in terms of best practices?

There are many, but I'd mention 4 strategic concepts here – success allocation, portfolio optimization, cross- and multi-channel conversion, and n-dimensional segmentation.

With success allocation, we're moving beyond simple conversion analysis to understand the sequence of keywords that contributed to conversion over time. Since most web visitors use multiple keywords prior to conversion, I expect this concept will attract more attention going forward.

I also believe keyword portfolio optimization will gain more traction in the marketplace, as marketers seek to balance quantity, quality, and reach to maximize their success. Cross channel conversion describes how customers interact with multiple marketing initiatives (i.e. keywords, email, direct mail, etc). In my mind, the ability to understand this interplay between different marketing tactics and optimize for it is the essence of our industry.

Multi-channel conversion covers people using search but then converting offline, typically via call center. Once again, this is an area where we're just scratching the surface, but those that are doing it well are profiting significantly.

Lastly, n-dimensional segmentation. N-dimensional segmentation is really the process of slicing and dicing your data by limitless dimensions, in real-time. This allows you to quickly create highly targeted segments that you can leverage and profit from. In many respects, n-dimensional analysis is the future of online business optimization because it allows you to go beyond the first- and second-degree reports that most web analytics packages offer today and that will become commoditized as this market matures.

9. Web data has lived by itself for some time now but many vendors are expanding into abilities to either import in or export data out. From a philosophical perspective do you feel that Web is the "center of the universe" for company data or the future is that current business intelligence tools will continue to be "center of the universe"?

Well, I think there are really two questions here. First, I think irrespective of how you define the universe, there will always be the need for data interchange. That is why Omniture has invested so much time and resources to providing customers with multiple ways to import and export data.

Second, I think the lines between the Web and the company will only continue to blur, such that you can't really distinguish between the two. Rather, I think the notion of the "customer" will really be the only constant in this industry and companies will gravitate towards whatever solutions, technologies, and vendors best allow them to maximize their customer success.

10. I am sure you have many favorite clients but probably one closest to your heart. Could you share some reasons why this anonymous client is your favorite? What is it that they do that is unique? What can the rest of us learn from them and emulate?

I don't think I actually have a favorite client, per se. But I do have one in particular that I just started working with that I'm really excited about. This particular client is fearless and incredibly ambitious. They "get" web analytics and online business optimization on many levels.

One of the most appealing aspects is that they understand that success requires an equal commitment from us and them. They have an executive sponsor, they have business and IT resources, and they are putting forth someone to "own" analytics. This is where many companies fail – irrespective of sophistication – so it's great to work with a company that is so forward-looking in this regard.

11. What is the one thing about the future of web analytics that none of us know, but you do? : )

Ah, that's for me to know and our competitors to worry about : -)

Do you have any feedback for Matt or I? Did you have a favorite answer (for me, it is hard to pick just a couple but, the answers to question 6 and 8 )? Is there a question I should have asked but you think I did not? Please share your feedback via comments.

Search Engine Marketing / Pay Per Click, is the hottest thing around. Everyone is doing it and if you are not doing it you dare not admit it for the fear of looking crazy. There are more agencies and consultants out there than you could care to count and all of us are trying to work with all of them trying to do our best.

My hypothesis is that while a few companies are laughing all the way to the bank as a result of their SEM/PPC campaigns the rest are probably not maximizing return on investment.

We in the Web Insights world can play a killer role in helping our companies truly measure effectiveness of our SEM/PPC campaigns. We are unique because we can cut through the crap because of our awesome analysis powers, our access to all the data and our ability to think beyond base metrics like CPC or CPM. Yes people are doing CPA now and we are even measuring Conversion Rate by Key Phrase. But there is more.

Here are my suggestions to us Web Insights Analysts for providing deep insights to our decision makers, and potentially a competitive advantage to your company:

# 5: Measure your Bounce Rate (aggregate and by top key phrases)

My definition of Bounce Rate is someone who stays on your website for less than five seconds. Some folks define this as visitors who stay on the site for one page or less, this is fine as well.

The conversion rate for most sites, per shop.org’s most recent study, is around 2.2%. When we do PPC/SEM campaigns we are thrilled to get 3% conversion rate and we ask for more money to spend. But since we are paying for this traffic we should expect much more than a bit better than normal conversion rate.

Measuring the Bounce Rate for SEM/SEM traffic in aggregate is an eye opener. It usually turns out that the Bounce Rate is really high (60%+, often even higher). Decision Makers are shocked that 60% or 80% of the traffic stays for such a small amount of time because we are paying for each click at the search engine.

It gets even more interesting if you measure Bounce Rate by Key Phrase. This will highlight stinkers very quickly, phrases that drive traffic that stays for five seconds or less (or only one page).

The point of the recommendation is to really dig into your traffic. It is possible that the key phrase is the right one but people are landing on the wrong page. It is possible that the phrase is ok but you are not repeating the value proposition on the landing page, or the offer is missing etc. Once you know you can fix, and oh do set the bar higher for PPC/SEM campaign conversion rates.

# 4: Audit you Vendors/Agencies

The de-facto standard is agencies are running campaigns using some very sophisticated analysis (bidding) and measure “success” using third party javascript tags on your website. This is good progress. But there is more.

There are often problems with third party cookies. Each agency seems to be using a different kind of data capture and data processing system. They also define the same metrics differently (even metrics say like repeat visitors or visits to purchase) and they don’t do any analysis on site effectiveness because they are, rightly, optimizing your bids.

My recommendation is to request (or force as the case may be) your agency to add an extra url parameter at the end of the URL string that goes to the search engine. This should be a parameter that your analytics tool will recognize (usually something simple like kaushik.net/avinash?source=google-avinash_is_nice will do). Now power up the segmentation in your tool and slice off the SEM/PPC traffic and match up key metrics like count of visitor, time on site, bounce rate, conversion rates using your own analytics tool.

The numbers will not tie, but if they fall within 10% you are fine. What you will usually find is they will be off by 20 or 30%, that would be a great time to compare notes with your agency because if they are measuring success 30% higher than you then it is likely your campaigns are not performing as well as you think.

Another benefit is that you can now truly, with inherent knowledge of your business that your agency does not have, analyze what this traffic is doing and understand their behavior and work on site optimization.

I have to stress that the Agencies are doing the best they can, they are not trying to mess with you. It is simply that there are limits to what they can do and you need to step up and take your responsibility.

# 3: Measure Cannibalization Rate (vs. Organic)

Another false measure of success, and very prevalent, is that we start buying our “branded key phrases”, traffic shows up, we pay google and overture, there are sales and success is declared. But if you have done decent SEO (search engine optimization) it is possible that you might still have gotten traffic from search engine (especially your well recognized branded key terms) from Organic results. Do you know how much you are cannibalizing your Organic (free) traffic by doing PPC (paying per click)?

This is a very powerful metric and something you should be watching all the time and based on the results of that analysis optimizing your SEM/PPC spend. Many good Agencies are doing this, demand it from yours.

I will share a very simple way of measuring cannibalization. Take some of your most popular branded key phrases, assuming you don’t have heavy weekly seasonality factors, and turn off your campaigns for those key phrases for a week. Measure number of visitors, bounce rates, engagement with site (if you have that metric)  and conversion rates. Turn on the campaigns next week and measure the same metrics again, for the PPC/SEM slice. Compare the two sets of numbers and you have a nice idea of how much you are cannibalizing your Organic (free) traffic when you spend on PPC.

My recommendation above is not the most awesome, but it is a really simple way to measure cannibalization. I am sure you can think of ten better ways, what is important is that you measure cannibalization and then make informed choices. Why pay for traffic that you could get for free?

# 2: Aggressively push for Testing & Experimentation

Testing and experimentation is not normally considered the scope of web analytics, but it should be. One of the beautiful things about key phrases is that we can infer intent from them. It is likely that 60% of your site traffic is No Referrer and you don’t know squat about them and you can’t give them relevant content, but with your search traffic you know something of value.

Partner with key marketers in your company and implement a testing strategy (multi variate, AB, DQB, RRR does not matter) that will allow your to try different content, pages, structures, layout, navigation based on what you understand about the intent of those key phrases. The result will be optimal customer experiences for your PPC/SEM traffic and a huge spike in conversion rate, whatever you are selling.

(And if you set persistent first party cookies you can “remember” the SEM/PPC driven traffic and the next time they come you know who they are, which test experience worked for them, or did not, and now your site can start to have much richer interactions with them.)

# 1: Strive for “Multi Goal” Understanding of Visitors

No website exists for just one purpose, not even the simplest one. Yet almost all SEM/PPC campaigns are measured by one outcome goal (usually a conversion rate of some kind, purchase or a lead submission or visiting a page listing your core content). If the traffic comes for a few different purposes why measure them all by one goal? (To beat a dead horse, this is another reason to do testing.)

For your SEM/PPC traffic set multiple relevant goals. For example along with Conversion Rate you can also measure Customer Satisfaction and Task Completion Rates by surveying that traffic (if your web platform allows that). This will tell you oh 10% are converting but the others were looking to print pages or your tech support number or came to read reviews. You can then take relevant action to optimize your campaigns.

Or you have a frequent turnover site, set goals for Multiple Purchases in each Month, great complement to just conversion to first purchase. Or here is a nice one, if you follow the advice in #4 above, amass data for x period of time then compute “Live Time Value” for SEM/PPC campaigns and use that to optimizing your bidding as well as set a new bar for success. Bottom-line, if you are measuring “single goal” success for your campaigns, there is opportunity to get more sophisticated.

As usual ; ) I have one bonus recommendation for you…….

# 0: Help Measure the Value of the “Long Tail”

The concept of the long tail, as applied to Search Marketing, states that there are hundreds of key phrases that individually drive small amounts of traffic to your website, but if added together they can be a huge amount of, potentially profitable, traffic.

Thanks to our current analytics packages we are all used to only looking at Top 50 key phrases from each search engine. Maybe you look at the Top 150 because after that you have the “onesies” and “twosies” and we don’t care. But the delightful thing is that these key phrases are not a part of cut-throat bidding process in ad-words or overture or ad-center.

The implication is that if you can identify your “long tail” and make that a part of your SEM/PPC campaigns (assuming you are using some automated bidding system), you can capture a large share of this traffic and do so at very effective costs and turn great profits for your company. 

There are limitations to identifying the long tail just using your clickstream package so use other tools that are on the web and/or ask your Agency. I also recommend HitWise as a great source. But help your company look beyond the obvious / “top” key phrases and go after the long tail and help them measure the value of the long tail.

What do you think? Do you agree with these recommendations? Most of you are much much better at PPC/SEM than I am, do you have suggestions to add? Please share your feedback / critique via comments.

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