Intro
Analytics are playing an increasingly greater role in running businesses both online and off. What started out as basic tools have
emerged as strategic advantages in greasing the wheels of commerce. We’ve witnessed companies like Google and Ebay/PayPal introduce analytics almost as add-ons to their core businesses. Now, we’re seeing that these analytics are the business — both Google’s and their clients’. If Google and Ebay make me more effective in building my business, they are going to see more incremental ad dollars from my wallet.
Brass Tacks: Analytics in the Small/Medium Content Business
While I’d like to say that my business (investment advice, premium investment newsletter) is driving by analytics, I think I am just at the beginning of using analytics to grow my business. This graphic shows how the evolution of advertising and analytics has occured.
I think analytics play a role in 3 distinct ways:
- Measuring: You gotta know what you have to know what to do with it. In a Sales 2.0 environment,
there are a variety of things that beg to be measured. Before I launch into some of the analysis, I have to say that Google is by far the 800 lb gorilla in this space. Not wanting to sound like a Google pump-monkey, Google understands the need to measure and incrementally tinker to optimize. No one else even seems to be paying attention. There is a great article on analytics by Dave McClure on why Google is poised to own this space and what it means for publishers/advertisers using the Google Analytics platform.
- Server logs: I’m using Google Analytics here. Why Google? Couple of reasons: it’s free and as a good friend once told me, it’s hard to beat free. The other, and more serious reason, is the ease and simplicity of Google products. It’s a snap to set up and continue to use. What’s more, though, is that because Google ‘gets’ what analytics are all about, the search behemoth is working hard at integrating its products. So I’m using analytics to decipher my web traffic, both in terms of organic search and paid-clicks from my Adwords account. Google has recently taken analytics a step further to capture the whole advertising–>sales funnel–>conversion cycle (see graphic). I’m also using Google Checkout as our payment platform and Google Analytics allows me to get an entire view of the efficacy of my ad campaigns, not only as it relates to bringing prospects to my site, but in actual sales terms. That’s the holy grail.
- Inbound links and page ranking: As I wrote about in my article about how Sales 2.0 is helping me grow my business, I’m marketing my business primarily through the content I produce. I have a couple of key partnerships with third-party sites who host my content in return for driving traffic back to my site. It’s important for me to monitor who has my content on their site, who’s picked up the content afresh, and how well these sites are driving traffic back to my site. I use a combination of Google Alerts and a combination of other sites to measure how well I show up in sites like StumbleUpon or digg.
- conversion rates: As mentioned above, I’m using Google Checkout and Google Analytics and this allows me to optimize my SEM dollars and time to put my advertising dollars where they are most useful. I can tweak things on a daily basis if I want to blow something out.
- email open rates: I’m using an email service provider like StreamSend to send daily/weekly/monthly emails to my premium and free subscribers. StreamSend takes care of sending these marketing emails and recently the firm has integrated Google Analytics into their reporting section. I get reporting down to which subscriber clicked on which link in which email I sent. Pretty powerful stuff.
- I’m using a CRM platform that is somewhere between a Salesforce.com and 37 Signals’ Highrise.
- Gauging: Given that I’ve now measured something, what does that mean for me and my business? Well, here we leave the output from the Sales 2.0 environment and the burden is shifted to the user of the systems, namely me. Given the output I get for my business from Google Analytics, I have a relatively easy-to-understand roadmap of what to do next. In terms of Search Engine Marketing, I swap dollars from underperforming ad copy and keywords to better performing ones.
- That said, my business doesn’t have the sophistication (yet) to handle a lot of A-B type testing to truly gauge how different inputs affect my business. Google’s AdWords and AdSense, blogging platforms like Wordpress and Email Service Providers like StreamSend are all working to bring powerful tools down to the world of the small business owner — all bundled seamlessly into existing platforms.
- Also, given how Sales 2.0 has forced businesses to focus way upstream of the customer, tools need to be developed to explain to users not only what’s happening on their own site but how activity on other sites throughout the Web affect my business.
- Reacting: I’ve measure and gauged and now I need to do something with the information I’ve gleaned. I think many businesses (including some I’ve worked for in the software and media space) measure effectively and even gauge effectively. We have metrics pouring out of our ears. What we missed was a clear methodology for implementing changes based on analytics. This has everybit as much to do with organization reactivity as it does to having good analytical tools.
- We have regular meetings to review analytic output and make sure that we leave those meetings with clear objectives that require implementation. It’s not easy, though. With how busy everyone is just doing his job, it’s a growing challege to find easy and flexible ways to react to lessons learned from measuring effectively.
- Responding to analytics output will be a formidible task as more and more firms realize the importance of not only measuring but finding the tools to realize what analytics does for a business. Some of these tools will be rolled out by providers elsewhere in the online chain (Google at SEM, EBay at selling community) while some tools will be introduced by 3rd parties who see an opportunity in the market. The key to making all of this work is the easier you help me make more money, the more money there is to share out to partners.
