Excellent Analytics Tips #19: Identify Website Goal [Economic] Values

Contrasts Regular readers of this blog will recognize that I suffer from OOD. Outcomes Obsession Disorder. I am seeing a therapist for it.

The way OOD manifests itself is that in every website and web business I work with I am obnoxiously persistent in helping identify the desired outcomes of the site / business before I ever log into their web analytics data.

The other way OOD manifests itself is that I am in your face, on this blog, constantly asking you to create goals in your web analytics tool (macro and micro conversions) as well as identify goal values for each of those beloved goals.

Without goals and goal values you are not doing web analytics, you are doing web iamwastingyourlifeandminelytics. Sorry, OOD.

After following a structured process to create a Web Analytics Measurement Model most companies find that they are able to identify the goals for their web business.

What they find exceedingly hard to do is identify the economic value added to the business when those goals (micro-conversions) are met.

Framing the Goal Values Challenge, & Opportunity.

Here is an example.

At victoriassecret.com the macro-conversion is making a purchase. I come, place an order for a Colin Stuart Cuffed Suede Over-the-knee Boot and it is not hard to figure out what the value of accomplishing that goal was. $149. [Not net profit, just value. We can compute profit et al later.]

victoria secret macro and micro conversions

But what is the economic (goal) value of requesting a catalog? Signing up for an Angel Card?

How about the economic (goal) value of me visiting VS All Access and consuming all the valuable content?

There is no doubt that ordering the catalog makes it more likely I'll buy more in the future. Signing up for the Angel Card will make me a loyal customer (after all, how will I ever resist the temptation of getting a surprise birthday gift every year!). Consuming the content at VS All Access improves my perception of the Victoria's Secret brand and perhaps even makes me a Net Promoter (something so precious to the company).

Yet how does an Analyst at VS value those micro-conversions?

And if she does not value any of these micro-conversions is she not doing a disservice to her organization by only having them focus on online conversions (remember just 2% for most sites) and not the holistic site value?

For websites I work with the economic value of micro-conversions is routinely 3 to 4 times the macro-conversion. Let that sink in. Stunning, right?

How about the Analyst for Ohio State University who does a great job of measuring online donations but not the value of campus tours scheduled, prospectuses downloaded, online applications, course registrations, job applications, etc., etc?

On Caterpillar's website there are no obvious macro-conversions, just a whole lot of micro-conversions to track as goals. Equipment lookups, lots of downloads, decision-making tools, quote requests for renting equipment, etc. How does the Analyst compute the value added by the site? Surely not using horrible metrics like Page Views, right?

You will only create a data-driven organization when you are able to compute the complete economic value created by the website. Not through data pukes.

So how does one identify economic (goal) value for the non-ecommerce macro-conversions and all the micro-conversions?

It is easy and it is hard.

You'll often need to step outside your silo of Google Analytics and WebTrends and Site Catalyst and CoreMetrics. You'll need to look in your corporate data warehouses. You'll need to work with your Finance team. You'll need to make leaps of faith.

Try these techniques. . .

link pieces together

#1: Assign campaign codes & track offsite converting goals (micro-conversions).

This is the easiest.

In the right navigation, you can meet one of my micro-conversions by clicking on my book's link. I track that click as a Goal (using Event Tracking). But what is the value of that click?

To answer that question I signed up for an affiliate account with Amazon and added my affiliate id to the outbound link. One great benefit: I get detailed reports from Amazon that tell me clicks and conversion rates! I know how much my book sells for and it's not that hard to compute value of every click on the book's link.

Same thing with the link to Market Motive, my startup that offers quarterly courses and certification in web analytics, paid search, etc. Rather than linking to www.marketmotive.com, the link has utm tracking parameters (utm_source=blogs &utm_medium=occamsrazor &utm_campaign=startuppromo).

Once a month, I go into the Market Motive GA account, segment the Visits from this blog as identified by the campaign tracking parameters, and look at the Per Visit Goal Value (how much economic value Occam's Razor readers added to MM by signing up for certifications, trials, watching videos, downloading stuff, etc). I use that as the Goal Value in this blog's Google Analytics settings.

Simple.

It is not unusual that in addition to delivering conversions (or not), your website links to other places where traffic you refer adds value. Whenever possible, tag those links with campaign parameters / affiliate codes / whatever works, and collect data that helps you identify goal values for your website.

Want a non-blog example?

Take a quick look at Tesco's website. You can see how easily you can use this simple tip to identify goal values for at least 10 not-on-the-corporate-site micro conversions (finally valuing tesco.com at an economic value it deserves!).

online to offline connection

#2: Uniquely track online micro-conversions in offline systems.

Someone visits www.cat.com and submits a "Request A Quote" for a Backhoe and Industrial Loader. This goes into the CRM system for Caterpillar. Make sure it is marked uniquely as a "web_quote." Now wait 60 days. Look back and see how many of the web_quote marked requests converted into fully fledged purchases. Now do this:

Total revenue divided by number of web_quotes

You have the average goal value!

Of course you also know how many quotes were originally submitted and of those how many converted. You can use that going forward to get from Google Analytics the number of requests a day and apply the conversion rate and the goal value to compute economic value every day!

Go back and revise the goal value each month using the same method as above. It will help you, over many months, understand seasonality and whether your site is getting better quality quotes (increase in goal value) or worse quality (reduced goal value).

Not very hard. Just takes some time and patience.

Use the same method for people who ordered a Victoria's Secret catalog. Make sure they are identified uniquely in your company database, and then use their purchase behavior (as recorded in the database) to go back and enter a goal value into your web analytics tool.

Same thing for job applications received online (vs. those received from recruiters or via phone or people walking up). Compute conversion for online, identify costs saved due to non-payment of bounty, identify goal value!

Couple more examples. . . Tie applications submitted on the Burger King website to conversions offline, or coupons downloads on the Target website to the number, and value of, redeemed in-store.

Remember don't just take one number and stick with it forever. Periodically (at least once a quarter, though once a month is optimal) go back and validate you have the right number.

growing success  

#3: Get the current "faith based" number from Finance.

Here's a simple example.

I can go to L'Oreal Paris and spend 10 minutes watching all the TV spots they are airing currently (and conveniently have on their website). Micro-conversions! Goal value?

Not as hard as you might imagine.

I walk over to the Finance department and ask them for the value of one TV ad impression. They have that number. That is what they use to allocate the TV budget (the $$$ spent by the GRPs for the ad, or another faith based number of how many people "possibly" watched the ad, used to computed $ per TV ad impression).

Use that number as your goal value. After all, someone came to the website willingly and watched your TV spot! You know that these people were not in the bathroom when your ad aired on TV. They were there on your site. They hit Play and Pause and Next!

[Use this exact method to place value on your YouTube video views.]

Another example.

How do you value the micro-conversion of me downloading the brochure of the GMC Acadia? The finance team is currently allocating budget to Marketing to spam half of the US with unasked for glossy brochures of the Acadia, in addition to putting millions of them in dealerships. That funding was allocated based on some smart Finance person cooking up some numbers that looked liked this: "When we send 2 million brochures of a car, typically we can get 20,000 people into the showroom, which yields 19,000 Acadias sold, so each brochure gets us a ROI of $45." There you just got the goal value for someone who comes to your site and proactively (with much stronger intent) downloads the brochure.

It is important to note I am not endorsing what the offline folks are doing nor how Finance currently computes the value of offline marketing activities. I am simply asking you to use what they are already using. You can improve upon things later (given that you have a lot more and better data).

Your newspaper ads, your TV blitzes, your billboards, your athletic sponsorships, your logos slapped on NASCAR cars, your conference sponsorships, your. . . other things are all currently being justified via, often faith-based, financial ROI models. Use the exact same numbers. And who will argue with you? You are using what everyone else is!!

People in Finance are your much underappreciated BFFs.

measure values

#4: Use "relative goal values." 

Sometimes the first three techniques are not an option for you. No worries.

We'll eyeball things! Because we MUST have goal values. Ok not really eyeball, rather we are going to try something clever.

Let's use ti.com as an example. Texas Instruments is a delightful company with amazing products. It is also a B2B company with no real online conversions, which makes our job in this context harder to do, and hence a great example.

I don't know anyone at TI or ti.com, so I'm making some assumptions. With a quick look at their website, we can identify that a good macro-conversion is orders for Samples. I want to get a Low Power Zero-Drift Instrumentation Amp, I go to the the page, I add a free sample to cart, and I checkout. Boom! Macro-conversion.

In order to establish a goal value for this macro-conversion, TI has many options. I would recommend using the one in tip #2 above.

That's done. Now you'll notice the site also has many micro-conversions. Let's just pick a few. Loads and loads of videos. Valuable "Selection Guides" (and other documents). New my.TI accounts. Completed designs. Outbound clicks to Authorized Distributors. There are others as well but let's just ignore those for a second.

Now how does one value these micro-conversions? If the first three techniques fail then my recommendation would be to use "relative goal values." That is, the value of one goal relative to another goal.

Our benchmark will be our macro conversion. Let's say it is $25 (it is probably a lot higher in real life, but stick with me).

So the question we'll ask is this: "How much is the download of a selection guide by a relevant visitor to our site worth relative to getting an order for a Sample?" Or "How much is someone watching an entire video for one of our products?" So on and so forth.

Don't do this yourself (especially if you are a Consultant and not an in-house Analyst). Get the decision makers in the room. Get Finance to join you. Get the Marketers to bring their wisdom. Essentially, people other than you who really know the business and have experience in making these kinds of judgment calls. They'll bring their baggage, but its a small price to pay.

The first output of this exercise will be a relative ranking of conversions. It might look something like this:

1. Sample orders
2. New my.TI new accounts
3. Completed designs
4. Videos watched
5. Selection guides and other downloads
6. Outbound clicks to distributors

Essentially a priority order of what's important to the business. (If you do nothing else with this info, treat this as Gold. It is so helpful in prioritizing your analytical efforts!)

Then you'll say: "So if a sample order is worth $25, then how much is a new my.TI account worth?"

(Before you jump and yell, let me rush to add that there are 10 good ways to answer that question. But remember, in this case we have no idea how to do it.)

The job of the collective intelligence in the room is to give you that number. An "our best estimate" or "closest judgment call" or "if you put a gun to our heads then based on our 10 year experience we would say x dollars."

Then you go to the next one. "If a sample order is worth $25, then what is the worth of a deeper connection with additional marketing potential and prospect address details and their future behavior on our website by creating a my.TI Account?" You get a number.

Then you continue, so on and so forth. Using the sample order as an anchor or relative anchors ("Well, if the video watched was worth $2 then a selection guide has got to be worth $5 [or $1, or whatever]").

You end up with something like this:

1. Sample orders. Goal value: $25
2. New my.TI new accounts. Goal value: $40
3. Completed designs. Goal value: $18
4. Videos watched. Goal value: $2
5. Selection guides and other downloads. Goal value: $5
6. Outbound clicks to distributors. Goal value: $5

Go put that in to your web analytics tool settings and compute economic value!

I know this is completely faith-based. I know that there are better ways of computing everything above. I know that you are doubtful. I hear you that a group of experienced people can't come up with something close to reality. Actually, you would be wrong about that last one.

I have done this many, many times and it is a surprise how often people say "OMG that was so close to what we had estimated before we did this expensive 9 month process with an outrageously expensive external consultant!"

Just try it. I just want you to start with something. Once the numbers start flowing you'll see that, almost as if by magic, you'll know some value of all that search traffic to a no-obvious-conversion B2B website or a non-profit or a Church's website or. You'll know the Per Visit Goal value of your Twitter and Facebook efforts. You'll know which content creates most value and which tools on the site suck. You'll know… so much.

And this is just the start. Once your execs get into the rhythm of this data and see its power and see your value (so IMPORTANT!), they'll give you the time and the resources to go compute the right goal values. That's the real outcome you want. But you don't get it by hounding people and trying to get perfection on day one without earning your chops. You get it by being nimble and getting key stakeholders involved and going with the "best we got" and building from there.

Trust me, it works.

out to battle for the good guys

#5: Use $1 as the goal value for all the outcomes. 

This is the worst case scenario. 

Nobody loves you. Nobody will talk to you. Nobody is interested in telling you anything.

You are the most unique business in the Universe. There is no possible way to get any vague idea of the site's worth. And you just got out of college.

Here's what you do.

First, identify all the macro and micro conversions. This is important. Can't skip this. If they won't help you then go to the site and identify them yourself. You might miss some, but that is okay.

Second, log into Google Analytics / Omniture / whatever and create the goals. Two seconds of work there. In the field that says Goal Value, proudly type in $1.

Hit save.

Start reporting the data with "Revenue," "Per Visit Goal Value" segmented by traffic source, "$index value" of the content, and so many more delightful things. More delightful than lame metrics like Total Visits and Average Page Views/Visit and Total Time on Site etc., etc.

The first time you do this people will be shocked. Then they'll ask "where the heck did you get that number?"

That is exactly what you want! 

For them to be impressed that you are not a lame reporter but someone who takes initiative and reports outcomes and value.

For them to get excited, or agitated, and ask you to explain.

You explain. Then you say, sweetly, blinking your eyes in a bewitching manner: "I took the best guess I could. Could you please help me come up with the best goal values?"

Boom!

You are in!

Sometimes they might say: "Take the $1 out, and report Time on Site." Do that. Start looking for another job.

99% of the time I have been asked: "Okay so how can I figure out the exact value." To which I say: "I read this blog called Occam's Razor, it is awesome. The author shared three specific techniques we can use. Let me tell you about them."

Boom!!

You got a promotion. : )

All from going with $1.

In all seriousness, using $1 is the last resort. But it is a great way to avoid waiting for Jesus or Krishna to come from heaven and give you the goal values. Just start the conversation. Start great reporting. Start doing some actual analysis.

Godspeed.

Ok, it's your turn now.

Do you compute goal values of all the micro-conversions (and if it applies, the macro-conversion) on your website? What approach do you take to quantify the economic value? Have you tried any of the above methods? Worked? Did not?

Please share your experience, hard knocks, love critique via comments below.

Thanks.

Comments

  1. 1
    Grant Cooper says:

    Value of visitor signing up for newsletter = $25.00

    Value of visitor Requesting Catalog = $50.00

    Value of visitor making purchase = $100.00

    Value of information in this article = "Priceless"

    Thank you for sharing practical, implementable steps for determining conversion value.

  2. 2
    John Andrews says:

    I love this post.

    I would just add that if you apply microconversion rates to these microconversion values, you can really start to valuate the traffic across your site. Segment these conversion rates by traffic source and you know how much you should be willing to pay per click for advertising.

    Also, I'm glad Mr. Kaushik threw in the GMC and Caterpillar examples. Because his shopping at Victoria's Secret and L'Oreal was making me nervous. ;)

  3. 3

    Hi Avinash,

    In point 1 you said… "I track that click as a Goal (using Event Tracking)"

    How can you track Goals using Event Tracking since as far as I know it is not available in GA. I only see "URL Destination", "Time on Site", and "Pages/Visit" as my options for setting a Goal Type.

    With GA as of now, there is no stand alone Event Tracking based Goals. You must be pushing a virtual pageView. Unfortunately, the link you include about Events does not talk at all about this issue and could confuse users.

    +1 for Event based goals in GA (Please).

    Otherwise great post.

    We also do something similar using eCommerce as what you mention for the $1 Goal. Since most of our sites do not have a direct $ value for our "transactions" we set Unit Revenue as $1 so we can use the Revenue metric as well as Quantity (because Revenue appears in certain reports where Quantity does not).

  4. 4
    Brian Chiou says:

    Hi Avinash,

    Great post :) I had a client who ran banner advertisements on his website alongside Google adwords. Originally, we had a 20 page data puke report.

    So, after this blog post: Keys To Web Analytics Maturity: Structure, Process, Hyperfocus I scrapped the 20 page report that the team had been using for over a year and turned it into a one page report. On top of that, I created 3 goals based off of pages per visit and an estimated $ value per page visited in the session. i.e. 1 p / v = .05, 2 p/v = 0.1 & 3 p/v = 0.15 & finally 4+ = 0.2.

    After 3 months of data collection, I figured out the average p/v that were greater > 4. Then assigned a more accurate number for that goal.

    All that data, went into one page report which was VERY well received by the client who could now quickly see in $$ how well CPC was doing for his site.

    Finally, I forced the company to use custom variables to track member interaction with the site to determine what the estimated value is for a new membership registration (which is technically free).

    The HiPPo didn't care about registrations before… but he does now :)

  5. 5
    Joe Teixeira says:

    Hi Avinash. I'm glad you brought up the discussion of Goal Values, something that I also try my best to "evangelize".

    I like to start with your worst-case scenario of using $1 (except that I use $100) and work my way up the ladder of Goal value success. I've found that if you do nothing with your Goal Values, you almost always get an email or a phone call asking why the GA profile or the WebTrends account is broken because there is a big flat-lining trending graph with "All zeroes". So, $100 as a starting point is my default, if anything, to not give the illusion of a broken / improperly configured WA account. That's a huge obstacle for most people to overcome.

    Then, once that's implemented, we have a discussion about it. Some people know exactly what their goal values are, to the second decimal place (or, third decimal place if you're in a country that uses three). Others have a general idea, and the rest have no idea. So, it's up to the WA person to really work with whomever knows this data to get it integrated into the tool.

    I am curious to know of all of the companies you listed, which ones 1. read this blog, 2. are in charge of WA, or 3. even have WA people (more than just having a tool installed). Would be interesting.

    And as Michael mentioned above, Goals in GA cannot be directly associated with Events at this time. You can make an advanced segment to show you visits with events and then see how many goals were matched by visits that included events, though. I'm sure that's what you meant (or, using a JS onClick event on the link and tracking the goal using a virtual page view – that's probably what you're doing).

    Thanks!

  6. 6
    Bart Jochems says:

    Hi Avinash,

    Currently I'm running Google analytics on a social network site. The goals I have in mind are event based, like people accepting friendships etc.

    You said: "I track that click as a Goal (using Event Tracking)" could you please tell me how you do this because at the moment I can't put any goals to my events. Virtual pageviews are not really an option because it are really events and it would mess up my data.

    Thank you!

  7. 7
    Liz R says:

    So the million $$ question is how do I track the YouTube video views from videos embedded on my site in Google Analytics without an expensive YouTube Brand account? Then I can assign a goal value, and rock it like Avinash.

    Of course I could do this in Excel…

  8. 8
    Peter Chang says:

    Thanks so much for the post and all the ideas; really great inspiration to consider goals and value constantly and allow us to give justification on "why are we doing this"

    It looks like the inspiration to set micro-conversions for many different valuable activities on the site don't need to be restricted to just the website. Especially with later tips to assign good-faith values or arbitrary values, we can apply this micro-conversion concept to activities done outside of the website as well. We can use social monitoring tools to establish micro-conversions on activities such as positive reviews left about your products or services, comments and mentions about your brand all over the web or social media, subscribers on your youtube channels, etc.

    The possibilities are endless and I think are also great opportunities to calculate the big picture opportunities that exist beyond just activities on your website. Heck, just reading this blog should be added in as a micro-conversion on the way to bottomline success in the future :-)

    Another interesting thing I think, is sometimes there are multiple values generated from a specific action on the site. For example, if the final macro-conversion requires registration, then the registration is part of the goal funnel to the macro-conversion, but it could also be a micro-conversion in itself that might actually generate more values in the long run with other activities on the site.

    In those cases it might be interesting to take a look and compare the values that action create between the micro and the macro role.

  9. 9

    Good Post! On a related point, perhaps check out the wikis on intelligent agents http://bit.ly/zGix9 and/or bandit http://bit.ly/42M6az frameworks. I think these can help frame the larger learning/optimization problem implied in Avinash's post. These frameworks provide a unifying way to think of your application as a goal (reward) seeking agent. How the application presents itself to its users can be viewed as what decisions (actions) the app needs to make/learn in order to maximize the goals/rewards. The IA framework integrates Goal with Action (Objective w/ Decision) and places value on measurement/analytics only to the degree that they service decision selection.

    No Shilling Disclaimer ;) – My work focuses on implementing the IA framework. However, I think these general concepts are powerful regardless of any specific implementation.

    Thoughts?

  10. 10
    WeArePrimate says:

    Fantastic article! :)

    I'm curious as to your advice on how to track the value from actions that cannot be monitored in any way as they don't require any trackable action to undertake.

    For example, if a website sells a service (a plumber, for example) and advertises their phone number clearly on the site then visitors would call them directly and it would be impossible to measure that action through the site.

    In this situation would it just be a case of the service asking the customer "where did you get this number from?" and recording it down so we could use it to calculate the value of having the phone number in a particular spot on the site? Or is it more advisable to hide the contact details and only reveal them after a user has performed an action to reveal them, thus making that click – and its corresponding value – trackable?

    Cheers!

  11. 11
    Lori Taylor says:

    Unfortunately too many people create marketing campaigns with too many moving parts, not clearly identifying wins along the way, except the occasional focus on leads or sales (which should be the ultimate outcome for any initiative.)

    Trying to move a brand out of the old mentality or plain old ROI is difficult. But if you can get them to drill down in a language they understand, you might have a shot.

    For example, I had a health insurance client who wanted use to use social media to drive leads. No matter how we explained that is a slow and organic process, this is all they focused on – ctr to sales from twitter or facebook. Brand affinity, reach, influence and trust had no meaning for them. Even when we explained these goals would majorly impact their conversion rates.

    Unless you ask the tough questions and manage your client's expectations, you could find yourself trying to explain why a wildly successful social media campaign that improved positive sentiment, doubled brand mentions and created an engaged influential crowd for spreading the world, didn't suck and wasn't a waste of money.

  12. 12
    John Andrews says:

    Re: WeArePrimate,

    Quite simple. Rent a separate 1-800 telephone number to display on your website, and only on your website. Track call volume through that number.

    I do not advise hiding contact details on your website. Besides the obvious deterrent to potential customers, you have search engine behavior to contend with.

  13. 13
    Josh Braaten says:

    Great tips as always, Avinash. I assigned the value of $1 to micro-conversions on my blog just for relativity and boy oh boy does that give you concrete direction. I was able to determine which blog posts lead to the best combinations of micro and macro conversions. The best content on my blog wasn't just the content that produced macro conversions. Fascinating.

    By the way, I start my data conversations with "Avinash says…" rather than "I read this blog called Occam's Razor." You could say that you're on a first name basis with my execs and me. :)

  14. 14
    WeArePrimate says:

    @John Andrews Great idea, thanks for the suggestion!

  15. 15

    Great article as always.

    Here's my question:

    We have a facebook page. It sends us some traffic. I want to track the traffic that is converting.

    However, many of the postings we post on fb are links to web-page versions of our email blasts that lists deals and discounts.

    People who click on links from that webpage end up looking like they are coming from the Vertical Response email even through they are coming from FB, going to that page, and then coming to the site.

    Is there a quick easy way to track that facebook traffic that aside from creating a separate page with all that info.?

    Thanks,
    Shankar

  16. 16
    Miroslav Varga says:

    Avinash,

    Like your work.

    There is a generalisation method that I have been using. The income per visit factor. For clients that don't know the value of Facebook or Twitter or…

    I call them Social Media Efficiency Factor (SMEF).

    Very often my Clients aks me:

    – How efficient are my FLYT (Facebook, Twitter, Youtube, LinkedIN) efforts? Where should I put more money to achive better ROI?

    After years of hard datamining, data analysis and data interpretation, finally find out a simple way to help my Clients to understand the feedback data better. Now I use a simple correlation factor called SMEF (Social Media Efficiency Factor).

    If the sales or income for a product or item rises (or falls) for a percantage (eg 5%), just compare it to the rise or fall of the social media refferals during the same period. If the # of Facebook refferals have risen 5%, LinkedIN refferals about 2.5%, and Youtube refferals fall 10%, just calcuate the SMEF's.

    SMEF (Facebook) = income / visits = +5% / +5% = 1
    SMEF (LinkedIN) = income / visits = +5% / +2,5% = 2
    SMEF (Youtube) = income / visits = + 5% / – 10% = -0.5

    Using this linear correlation factors (SMEF's) I would recommend my Client to invest his money for Social media marketing as follows:
    + 2$ in LinkedIn,
    – 0.5$ in YouTube
    for every 1$ he or she invests in Facebook.

    After a while this should be repeated. In mathematics this is called the linear interpolation. It's the less accurate and hardest way to find a solution, but at the same time, it's the most stable and easiest way to write an algorithm or program for equation solution.

    Miroslav

  17. 17
    Dave Rekuc says:

    Avinash, great post as usual.

    My biggest take-away from this post is that we should optimize for profit, not unanchored web metrics. If you're business generates leads for an insurance company, find out how many convert, the cost of converting them, and the value (in profit) that each lead is worth. Optimize your site to send the leads that generate the most profit. Then, hand your boss a pair of sunglasses because he will assume the sun shines out of every oriphus on your body.

    One question I do have regarding the appending you mentioned in your first point. Do you ever run into an instance when appending links interferes with SEO objectives? I've operated under the assumption that you don't want a great deal of parameters on a backlink to your site. Perhaps I've been wrong to do so.

  18. 18

    John: Ha ha! Good point.

    I did not intentionally include GMC and Caterpillar for that reason, but after reading your comment I am so glad that I did!

    Michael: Being able to set up Events as Goals has been one of my big wishes (and the subject of my "aggressive complaints"at 1600 Amphitheater). As of Jan 24th 2011 you can't use Events as Goals, but God willing that won't be the case forever.

    If you look at my code you'll notice that I am doing two things when someone does outbound clicks. I fire off an Event as well as a Fake Page View. The latter is just for tracking goals, and the value of that goal. It works very well. I put those page views into a different directory, easy to filter out if I really want to.

    I like using Ecommerce in some scenarios, especially for lead gen sites. Both because of getting transactions etc but also because I am a huge fan of Days & Visits to Conversion and I can't get it any other way. It is really great to know how long it takes

    Brian: This is such a great example, thank you for being so kind.

    The process you followed for valuing content is both simple and supremely effective, I hope others will find it to be an inspiration.

    So glad to hear the HiPPO's were turned around due to your effort! I have been consistent in saying (on the stage and in this blog) that we, Analysts and Marketers, have to take our share of the blame for HiPPOs being HiPPOs. If we do our part, as you clearly did here, the HiPPOs are more than willing to be more data driven and not be… well HiPPOs. :)

    Joe: It is a very interesting psychological difference between using $1 and $100.

    When I have used high numbers ($100) it turns out that so many people are so happy that they won't engage. When I use small number ($1) I am essentially severely undervaluing their work ("What! Our site is just creating $900 of value!!!") and they almost immediately engage.

    To your question about companies… I used 8 companies (one University) as examples. I have either worked with or otherwise engaged five of them and they have have a WA team at varying level of sophistication (beyond tools implementation). All five are super motivated, hence they are in this post. :)

    Bart: You can't set Events as Goals in Google Analytics today. See my reply to Michael as to how I handle it personally.

    Meanwhile I would share this advice that I personally follow: I don't fire off "fake" page views for *all* the events, that's simply not necessary (and of course not prudent at all). I identify only the critical few (repeat: few) events and then fire those off as page views (and do so in a different directory which makes it easy to ignore this "fake" data).

    For how I believe the trade-offs are sound and provide more value than problems.

    Again to reiterate, just an issue for now (until the team at Google hears all of us!).

    Liz: There are three ways in which you can get data for your YouTube videos.

    1. Use the amazing YouTube Insights reports to get awesome views, geo, demographic and "engagement" data.

    2. Have your own Brand Channel and get the goodness of Google Analytics reporting for what's happening on your YouTube pages in GA (including conversions tied to your site).

    3. Use a "chromeless player" or the YouTube player's API to get tracking of YouTube videos on your website and make magic with it.

    As you move from 1 to 3 the work increases, but so does the size of insight.

    This blog post on LunaMetrics summarizes the above methods and has more helpful links:

    ~ Tracking YouTube Videos in Google Analytics

    Hope this helps.

    -Avinash.

  19. 19

    Peter: There indeed is no real limit to how many micro conversions you can create, but at least for the initial effort I have encouraged people to keep them to a "critical few". It's simply to keep the focus on what's the most important to the business and to keep some handle on how to best use our limited time. Then as we get good we can be more expansive.

    Being imaginative about creating the macro and micro conversions is often key. As you correctly point out, don't limit yourself to the obvious things. You want holistic Economic Value in the end.

    Matt: It is my fervent hope and wish and desire and prayer that one day the web analytics environment (and vendors) will become so sophisticated that leveraging Intelligent Agent and Multi-armed Bandit frameworks will become routine.

    I was working on a problem with Hal Varian on a ads problem recently and the approach used leveraged the multi armed bandit framework so amazingly, not surprising with Hal's background. We need to do more of things like that.

    Thanks for sharing these links.

    WeArePrimate: In addition to the wonderful suggestion from John allow me to point you to my post on measuring offline impact of online activities. It might have a couple other ideas that might be of value in your question:

    ~ Multichannel Analytics: Tracking Offline Conversions. 7 Best Practices, Bonus Tips

    Lori: Excellent point, especially in a consulting context not following the advice you share in your comment will kill anyone. And I mean kill! : )

    I find that with clients I can't go all in. They'll refuse to listen to me unless I listen to them first and meet their reasonable (and sometimes absolutely unreasonable) needs. So I take it as a gradually escalating process:

    Let's do the clicks, then let's do the macro conversion, oh and now that you are excited let's do a couple valuable micro-conversions, see how cool was that so now let's do influence, oh oh and now that we've proven that let's do… so on and so forth.

    The challenge of course is that most consultants don't want to do this work and most clients don't seem to have patience. But we deal with it and we make lemonade! :)

    Shankar: Without the ability to dynamically (or manually) change the campaign parameters you can't distinguish, in this case, the email traffic and the Facebook traffic.

    The email has links to your site.

    When the email goes out it needs to have x tracking parameter. When the email is posted on FB the links need to have y tracking parameters.

    That is the cleanest and best choice.

    You could parse referrers, depending on how Vertical Response is coding their emails and if they are using 301 or 302 redirects, but that is a weak approach. You can log into your WA tool today and use segmentation to see if there's some goodness there (even if it will be weak).

    Miroslav: I agree with you that correlations can be helpful as a first step. It is better than just executing programs on Social Media simply based on faith.

    As a next step we can start encoding things we share in FB and Twitter with unique campaign codes to get more surety about what this traffic is doing. For companies where there is an outcome matchback analysis with existing customers and buying patterns can be a great next step. Finally, when we have time, we can try some of the classical test and control methods to truly establish causality.

    As you say a step by step process.

    Dave: I like the sunglasses bit, though I don't know if I have courage to say it the next time I am on stage! :)

    To your questions about parameters… It will probably be on a handful of links and not all of them and search engines have gotten smart about parameters and if the destination site is really worried they can specify the canonical.

    On your site as well you can do that, for example for this link:

    http:// www. drleonards.com/Health-Products/Arthritis-Pain-Relief/Ultra-Blue/10532.cfm?clicksource=HOME_PAGE_IMAGE

    You could tell Google, Bing etc to ignore the clicksource bit. If you wanted to.

    -Avinash

  20. 20
    ateeq ahmad says:

    Hello Avinash,

    Thanks for this great article. Early on in our life as analysts having a massive data warehouse at our disposal, we were able to come up with a value to each page template that we use.

    For example, a car price page will have three ads which we get $x dollars per cpm. Let us say, that the page was viewed y times. So, simply put, our revenue becomes $x * y *0.001 . As we track mini and macro conversions, over time, we are able to now establish trends and analyze the value of various pages over time. It has been a great help around a massive re-design that we just went through.

    Goals are very important and putting $$$ values to them gets a lot of attention!

  21. 21
    Łukasz says:

    Again excellent post. One another thing that You might end up doing is also measuring the value (ROI, EVA, RORAC whatever metric) of the new features, BI insight you propose. If for some reason you add to your shop a feature of suggestion (like Amazon does) because you discover a particularly interesting client behaviour data, you also should test the validity of it.

    It might lead even to curious findings that proposing things completely not correlated (that means 0 not -1 :D ie you say people buying Avatar often buy gold watch even if it is not based on any insight) have a certain dollar value. Which means that you have discovered a new feature.

    Actually Avinash I am suprised that You have not mentioned about measuring the EVA of web analytics, BI so That executives are convinced that data driven site/business is really making them more $. One can even express it in Additional Dimension value of dollar or something like that.

    Anyways can't waint for the next post.

  22. 22
    Landin says:

    Great post Avinash. I have been associating value to mico and macro conversions for a while now. Great tips!

    Landin
    Entrepreneur.com

  23. 23
    Raghu says:

    From your book Web Analytics 2.0 and this blog its very clear that without Goals its not worth tracking anything.

    Couple questions.

    1. I have used GA and they provide ways to create Goals and tie them nicely to see the progress. Is there a similar capability in WebTrends?

    2. Do you have any recommendations on how many goals is too many goals for any ecommerce company with considerable size of traffic?

    Thanks.

  24. 24

    Raghu: For #1, "can WebTrends do this", I encourage you to work with your Account Manager at WebTrends.

    For #2: There is no limit to the number of goals you can create, even in Google Analytics you can have twenty or thirty. My encouragement is to first and foremost, and you know this already, focus on the company's macro *critical few* goals. They won't be more than four (or the company has not thought about this hard enough).

    After that you can create a cascade for various divisions and group leaders who might have goals that have a line of sight to the top four.

    As you create those goals keep two important criteria and one challenge in mind:

      1. Who is the target audience for the dashboard with the goals data? Are they Analysts (just give them access to data, skip the dashboard)? Are they Marketers (say acquisition, give them custom reports based on a measurement model)? Are they divisional leaders (give them a "dashboard" tied to their division goals)?

      2. Is the audience expected to analyze your findings or act on your recommendations? At any level (company or division or tiny group). If the former make it a 6 tab excel spreadsheet (dashboard), data puking here is ok even if you puke out just their specific data. If the latter then think powerpoint and take inspiration from the "action dashboard" (its in your curriculum).

    And keep this one important challenge in mind:

      There must be direct line of site between the company's goals and those of the division and then those of the tiny group.

    Say the company Goal is to increase Average Order Size by 30%. If you create a goal, more detailed, for the division make 100% sure you are measuring their work that will improve the AOS by 30% (say they have to improve cross-sell efficiency by 20%). Then for the tiny team the Goal could be different BUT has to flow into cross-sell efficiency (say improve the diversity of product and experiment with a recommendation engine or whatever).

    If you follow the above two criteria and have a clear line of sight you'll be able to provide the data each level needs, even in large complicated companies with multiple stakeholders.

    Avinash.

  25. 25

    Wow! Great post with a lot of information. Thanks for every bit of it!

  26. 26
    Chris Leone says:

    Avinash,

    I second Grant's sentiments in that this post is priceless. This topic seems to be the missing link for web analysis (meaning it's so rudimentary but so often overlooked).

    While your examples are very helpful, I feel there's still so much more of this topic that can be explored. If it already existed, I would go buy the book dedicated entirely to this topic. Speaking of which – when can we expect book #3 from you? ;)

  27. 27

    Here's a second question after getting a fulfilling response to the first:

    1) You know the outcomes you want to measure (marcro and micro). Great!
    2) You've attached dollar values from them. Boo-yah!

    But from there, how do you go about determining goals to set in terms of how much growth you want to see in those outcomes?

    Is it simply, ok, let's work on stuff that we think will improve growth in those outcomes and see how effective they are and try to replicate the ones that have been effective based on dollars coming in or do you set benchmarks of growth you want to reach — and if so how do you reasonably come to that number?

    As always, big thanks in advance!

    Shankar

  28. 28

    Shankar: Please work with your Business Leaders and your Finance team to determine targets for your goals.

    It would be hard for an Analyst to set those, but your leaders are held accountable to deliver certain business objectives. Find the parts in those business objectives that the Web, or you, have to deliver against. You'll have your targets by ensuring a Clear Line of Sight.

    If no one wants to help you, and you have no idea what to do, then just start with a 10% improvement target. The follow the process for the last strategy outlined in this post.

    Avinash.

  29. 29
    Ned Kumar says:

    Hi Avinash,

    Great post and as always very educational. And I would welcome folks with OOD (Outcome Obesssion Disorder) any day over those with MRD (Meaningless Reports Disorder) :-).

    Folks should definitely listen to this post and execute on it if they are not assigning values already. Metrics & KPI are okay but showing the bottom-line impact is what can really stir up the HiPPos and get them moving in the right direction.

    Along the lines of #2 and #4 above, one other approach I sometimes find useful is to assign a non-revenue proxy value (which eventually can be converted to a dollar figure).

    For example, you could tie a micro-conversion on your site to the reduction in the number of tech-center calls. And since there is a cost associated with each call, you can see how the micro-conversion is reducing that cost (of course, all depends on your business context).

    Great read.

    Ned

  30. 30
    Eelke says:

    Any idea how to track this online > offline micro-conversion?

    – phone number to phone sales and support channel (totally this channel generate 4x bigger revenue than online channel, so i would love to measure it, because maybe its not micro, but macro conversion at the end of day :-))
    – phone number is not unique (no way to change this) and not clickable (people just see it and from every website corner can make call), its incorporated in layout of page as gif picture (so this number appears on 95% of total pages)
    – no way add any process on the offline side

    My idea was measure it via survey at initial phase (and then when i prove that online drives significant number to phone channel start measure it more precisely), but our HIPPO didn't get rationale of famous 4Q survey and dont like that invitation page is at the entrance, not on exit, pffff! :-)

    Thanks in advance.

  31. 31

    Eelke: If your leadership is unwilling to allow you to measure, and/or unwilling to change processes (do some work) and/or unwilling to experiment and/or you are unwilling to go with a "good enough" answer then there is no answer to your question.

    At some point the limitations are so severe that one has to pack up and move on. :)

    But with your client/boss/beloved HiPPO you are able to get some flexibility then this blog post outlines how to measure offline micro-conversions, it includes unique phone numbers, experiments, research and leaps of faith :)

    Multichannel Analytics: Tracking Offline Conversions. 7 Best Practices, Bonus Tips
    http://www.kaushik.net/avinash/2008/07/tracking-offline-conversions-hope-seven-best-practices-bonus-tips.html

    Once you are able to collect the data please refer to this post (goal values one) to quantify the economic value.

    Avinash.

  32. 32
    Eelke says:

    Avinash: yes, it's all about willingness, thank you for confirmation! If i will be able to collect data i will refer, but not sure about it because i packed up already (but meanwhile i still try to do my best)! Cheers

  33. 33
    Kristen says:

    Extremely useful post… I especially like #4, because it slowly leads the group to answer a question they thought was impossible to address.

    I'll be referencing this one at work for sure ;)

  34. 34
    Chris Boulanger says:

    Great post.

    I've found creating micro-goals and applying values to be extremely helpful for sites in all categories. Its especially helpful for content and b2b sites where macro-conversions may not be obvious or when transactions are completed offline.

    I think the biggest challenge is getting the right people in the room to assign the values.

  35. 35
    Jonghee Jo says:

    Hi Avinash –

    You gave a wonderful example on VS! Current VS Web Analytics team should be very grateful to you :) We actually tried to calculate Angel Card / Catalog signup value stuff but measuring the value of VSAllAccess.com visit was definitely more challenging. However I'm sure even trying to figure these things out would be extremely helpful.

    Thank you always for your insightful post.

    Jonghee Jo

  36. 36

    #3 is my Fav by far. If you can always bring everything you do back to an economic value / economic outcome you are always showing your value.

    I always endeavor to calculate the economic impact of my work with the organisations I work with, and always try to provide ROI.

  37. 37
    Beth says:

    Is there a way to review a copy of the book? To possibly adopt for classroom purchases by students?

  38. 38
    Mike says:

    Avinash,

    Another stellar post!

    I think one of the main points to be taken across is to at least put a value default ($1 or other) to each goal.

    HIPO's like to see stats but being able to put a dollar value to goals, events and campaigns really drive the message to their own bottom lines: revenues and profits.

    Starting with a default value really helps HIPOs see the benefits of being able to put the real value on each goal. Once that's done we can really move to getting them to take the time and resources to improve/enable better tracking.

    Kudos again! :)

    Mike

  39. 39
    Colin says:

    For the excellent high level thinking and posting, i still appreciated the actual code you created to tag the link in your example.

    We who do not work in cubicles also use and value analytics!

    You are the man.

    Colin Flaherty

  40. 40
    Tejash says:

    Dear Avinash,

    I had very broad idea of Goal for a webiste.

    But now i have got detail thought process on it and especially how to out economic value to the goal and measure it. It is really a thought provoking for me.

    Thanks a lot for this wonderful insight.

    Tejash Mehta.

  41. 41
    Antoine says:

    Hi Avinash,

    Very good post! Quick question:

    ins't the economic value of a goal the expected return of this goal ?

    value goal = probability of the macro conversion knowing the visit reached a given microconversion x macroconversion value

    For instance, if we take your example with http://www.cat.com,

    total webquotes : 20
    webquotes which lead to a sale: 5
    –> conversion rate webquote to a sale: 5/20 = 25%

    revenue : $1000
    nb of clients: 200
    avg order price: $5

    then the economic value of a webquote would be: 25% * $5 = $1.25

    I don't really understand why you take the total revenue divided by total webquotes.

    Thank you to anyone who could help me to get a better understanding.

    • 42

      Antoine: I was simply trying to compute a value for each lead received. Not all of them will convert, for identifying the average value of each lead you don't really care.

      So 1,000 leads. 10 convert. Total revenue from 10 orders is $100,000. Revenue per lead is 10,000. But what you need to add in your web analytics tool is the average value for each goal completed, in our case submission of a lead. Originally we got 1,000 leads which resulted in 100,000 worth of revenue. So the average goal value for each lead received is 100,000 / 1,000 = 100.

      That is the number you will add into Google Analytics or WebTrends or Omniture when you set up a goal. And as I mention in the post, it is important to revisit this goal value frequently to ensure you still have the right average number.

      -Avinash.

  42. 43
    Niklas says:

    Hi Avinash!

    Great post! Question. Do you always define a macro conversion as an actual purchase on a site? Let's say you run an b2b website with no online sales at all. Wouldn't it be more correct to define a macro conversion on this site as the most important thing for their business or do you consider them to micro conversions?

    Thanks / Niklas

    • 44

      Niklas: No. It does not have to be a purchase, in the examples provided in this post you'll see Leads and Donations and Videos watched used as examples of Macro Conversions.

      The simplest definition of a Macro Conversion would be: The most important job the website is doing for your business. The thing your business leaders care the most about.

      -Avinash.

  43. 45
    Jeanne says:

    Avinash,

    I use Google Analytics, and I have a question about goal values.

    Let’s say we have two goals in Google Analytics: registered and completed an application. Let’s also say that a completed application is worth $500 in revenue to us, and that 50% of the people who register for our website will, within the next several years, complete an application, meaning a registration is worth $250 to us. To bullet that out:

    – registered for an account on our website = $250 value
    – completed an application = $500 value

    Now, I have these two values, but I am confused because if a person registers and completes an application, $750 of value will have been assigned to their activities over time. However, we will only ever gain $500 for their activities.

    If this is the case, is there a different way I can set up the goals to avoid a falsely high ROI, while keeping in mind that I still want to be able to track the value of both registrations and applications that result from marketing activities?

    Thanks in advance for your help!

    Jeanne

    • 46

      Jeanne: Is the problem that you are double counting in some sense? Once when people register and then again when they complete the application?

      Why not just set a goal value of $250 for the website registrations? That would automatically flow the goal values correctly. Or assign the value when the application is submitted.

      The challenge you are facing is that you are taking the same ultimate conversion and applying the credit to two different things.

      Does this make sense?

      Avinash.

  44. 47
    Peter Nyishising says:

    Hi Avinash!

    Great post.

    Being just a few months old in web analytics I can some how say that everything i have learnt so far about web analytics 2.0 is thanks to this blog and your two books.

    By the way I am very impressed to learn that the proceeds from the books go to charity. The books are great. They are a web analyts' bible.

    Thank you.

  45. 48
    Phil says:

    If I track opt-ins to my email list and give each opt-in a value of $1 (because I know that 1 in 20 people will eventually buy my $20 product), doesn't value that show up twice in my analytic reports – first when people sign up for my email list and then again when they buy my product? Aren't my reports then overstating revenue by 100%?

    It seems to me that analytics goal values should only be for actual sales in order to get around that problem. Am I missing something? Thanks, Phil

    • 49

      Phil: We'd discussed this point in other comments on this post. Essentially….

      If you have a conversion on your website, track it like crazy. :) And don't assign a value to the first visit or the second one or other ones (as indicated by your Visits to Conversion report). Just wait for the conversion.

      If you have a email sign up, as you mention, then track the micro-conversion, again as you describe it, for the session (visit) where that micro-conversion happened. But since you don't know when that person will convert don't sum up the revenue plus goal values in this case. Assign a value to the session where the micro-conversion happened and then in the future if that same person delivers a revenue/ecommerce treat it as a separate event.

      Finally there will be many micro-conversions where the ultimate value delivered will be offline or brand value or reduction in ad spend or many other things. Those you can sum up with revenue.

      I hope this provides a little more clarity to your wonderful question.

      Avinash.

  46. 50
    Phil says:

    Thanks very much Avinash. I'm still a bit confused. For example, I use your 'Content Efficiency Analysis Report', and pay special attention to the 'Per Visit Goal Value'. Wouldn't this number be most accurate if I only assign values to actual sales?

    If I assign value to opt-ins and sales, it seems I'm double counting everything. I must be missing something here.

    Thanks again, Phil

    • 51

      Phil: You can keep the two pieces separate in your own analysis. The Macro Conversion could be thought of as the current revenue/value created. The Micro Conversions could be presented as "Future Value Created," in the current time period of course.

      This way you can still continue to make decisions about the total value being created using your digital existence, and still have a clean separation for your management team.

      You can see how this can easily help you understand "Bing is helped us deliver xx amount of future value in our current campaigns, even if it did not deliver immediate revenue." Or "The real value from non-branded conversions is revenue, and category terms is the opportunity to create future value. Let's value each appropriately."

      -Avinash.

  47. 52
    Richard H. says:

    Sadly, the issue with a lot of companies is just asking them "what their goals are".

    The number of companies that don't know this answer, is sadly a lot.

  48. 53
    Dave says:

    Great Article as always Avinish! :)

  49. 54
    Drew says:

    Thanks for sharing these approaches. :)

    There is one thing about WA goals that has always bugged me, perhaps you can address it here or in a post:

    It is so easy to "double dip" on goal values, since it's typical that micro conversions in fact relate/contribute to macro conversions …

    How do you approach this?

    Do you accept highly inflated (perhaps double or more) overall website "value"? Or, do you attempt to tease out / cannibalize the macro goal values by subtracting out the value of the related micro goal values, and then coming up with a reduced macro goal value (of course, not very practical when the macro is real ecommerce revenue!)

    If the former, do you therefore tend to look at goal values more so in isolation, and forgo the idea that you will be able to valuate the website as a whole using web analytics, given that the overall number is not at all indicative of the true value of the website? If the latter, do you have any recommended blog posts or other material regarding this supposed process of whittling away at the macro goal values, which are being "displaced" by the micros?

    Thanks! I would truly appreciate an expert's opinion on this. Again, this is something that has always bugged me, but that I've sort of "looked the other way" regarding. :)

    • 55

      Drew: A couple of uber points of clarification.

      Each goal will only be counted once in a session, even if it is completed more than once in a session.

      Also, it is not always true that micro-conversions lead to macro-conversions (most definitely not just digital macro-conversions). For example, getting someone to write a review is a lovely micro-conversion, it might help drive others to convert more, but the person who completed that goal won't macro-convert. There are of course other scenarios.

      Ok, with that said… There are some micro-conversions that lead to macro, for example, you add something to wishlist (micro-conversion!) today and buy that product a week from now (macro-conversion!). You can, if you want to de-dupe this effect.

      If this happens a lot, one simple strategy to follow is to report Economic Value Created from the micro-conversions (value that might be delivered now or later or much later, value that might be delivered online or offline) and report Revenue from macro-conversion separately. Don't total it up. Easy to understand, easy to analyze,

      Thank you for the question. I don't think we should look the other way. If you need more help with this for specific scenarios, please do consider hiring a GACP: http://www.bit.ly/gaac

      Avinash.

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