PART I Click-through vs. View-through
It is positive that more and more companies in e.g. Sweden (where I live), invest in web analytics tools such as Google Analytics, Adobe SiteCatalyst, IBM Coremetrics, Nedstat etc. and most important of all, invest in employing web analytics experts! While the web analytics expansion is growing, ad-serving platforms invest in their own technologies offering the same companies a different technology to track online campaigns. The issue is that ad-serving platforms collect campaign tracking data differently than web analytics platforms. While ad-serving platforms send reports to web managers based on pre-click, the web analytics platform send out reports based on post-click. This will confuse online marketers with not only the metric ”click” but also the metric “view-through”, which is not tracked (by default) in a web analytics tool.
Web analytics platforms do not track “view-through” but track campaign performance using post- “click-through” (CTR). The metric “view-through” (or VTR) is one of the metrics that many of the ad-serving platforms provide marketers with. VTR could be explained as:
a person view a banner + don’t click on a banner + purchase an item = banner will be contributed to the sale
Click-through on the other hand:
a person view a banner + click on a banner + purchase an item = banner will be contributed to the sale.
Ad-serving platforms can usually track both CTR and VTR, but web analytics only track CTR! VTR is a metric you should be careful to use in your online marketing decisions because firstly, you can never prove that a person actually saw the banner unless you ask him/her. Secondly, “the view-through metric can lead to disastrous media buying decisions…other ill effects include duplicate attribution of orders and other conversion to media that had no influence whatsoever on the final consumer behaviour” (Kevin Lee 2007). Or as Seth Godin (2010) states in a recent post, that a marketer should never “try to measure the unmeasurable media and use that to make decisions…some sophisticated marketers get good hints from their measurements, but it’s still an art, not a science”. Therefore, do not let yourself perform digital planning on gut feel based upon a single metric, but instead let VTR collaborate with your web analytics data. For example, if you are going to gain insight from a VTR campaign then it should be measured with metrics from your web analytics data. This is possible through a web analytics and adserving integration (described later in this article). I am convinced that, with the progress of web analytics expansion all online marketing decisions will eventually be based on web analytics data.
Ad-serving platforms will have to accept a situation where online marketing campaign performance will be analysed using data driven web analytics. I believe more and more web analysts in organisations will report to management the following:
- double attribution of orders
- campaign performance based upon CTR
- evaluate online budget and digital planning
- evaluate digital planning with e.g. marketing channel reports i.e. how visitors move across different online channels and from this data calculate a XCPO (Exact Cost Per Order, explained later in this article)
The analysis provided to management could cause online marketers not to afford any mistake in their online marketing spending. Or as Chris Brogan (2011) states, “If you’re not finding measurements that match your efforts and explain your sales cycle, then you’re fairly much pretending to market. Sure there are parts that you can look at like “awareness” and “sentiment,” but while those are helpful to the larger story, they don’t put money in the bank (instantly)”. This evolution could place the ad-serving platform in the shadow and online marketers would continue to listen arguments of VTRs contribution to branding and sales.
PART II Online Marketing Analytics
The solution for ad-serving platforms is to establish a relationship with the web analytics platform i.e. an Online Marketing Analytics solution. The goal of Online Marketing Analytics is the attempt to reach reliable online marketing data in web analytics data and optimize digital planning/campaigns that will result in an optimal online marketing spending that will increase revenue. In summary:
- Understand online marketing acquisition in the form of exact cost per order (XCPO) and online campaign contribution.
- Technical relationship (integration) with web analytic platforms
- Optimize campaign landing pages using web analytics and ad-serving data
1) Online Marketing Acquisition (XCPO)
Exact Cost Per Order (XCPO) is calculated to understand the “real cost” for an online activity and its contribution to other campaigns in your digital media communication mix. For example, visitor clicks on a link in a newsletter, clicks on a Google ad, click on an affiliate link and then make a purchase.
Newsletter (internal resources) + Google ad (€1) + Affiliate €10 = XCPO €11 + internal costs
XCPO will enlighten the “real” cost of a campaign. The next step is to calculate campaign contribution. In this scenario (below) our web analytics/ad-serving system will track the banner to have no sales but with web analytics e.g. marketing channel report (some ad-serving systems also deliver this) you will be able to analyze the ”real flow” of the campaign!
Banner (2000 clicks & 20 orders) + Affiliate (1500 clicks & 30 orders) = 30 placed orders
First visitors click on a banner and enter a step in the purchase process that could have resulted in a sale (20 orders). But these visitors left the site but eventually clicked on an affiliate link and placed 30 orders. Out of these 30 orders, 20 may not have been placed if it was not for the awesome banner i.e. the banner contributed to the sales.
The cost for the campaign is:
Banner (€500) + Affiliate (€10 CPO = €300) = XCPO €26.66
The contribution of the banner is:
CB% =66.66% (20/30)
The CPO Contribution for the banner is:
Contribution CPO = €25 (500/20)
XCPO = (Media Channel Cost1+Media Channel Cost2)/ Total Orders Placed Contribution
(CB%) = Media Channel Orders / Total Orders Placed
Contribution CPO = Media Channel Cost / (CB% x total orders placed)
In the “old school” mindset all 30 sales would be attributed to the affiliate with a CPO of €10 (last click rule). In the XCPO analysis the total cost of the campaign is higher, but the marketer can see that the banner contributed with 66.66% of the orders. Moreover, the banner is distributed a Contribution CPO of €25. This will give us more insight!
If we were not measuring the contribution effect of the whole campaign then the marketer could have considered the banner campaign to be a failure. However, if we are measuring exact cost per order (XCPO), then we should also attempt to track the exact orders (XO) placed…let’s talk about technical integration…
as a client with an ad-serving platform you should attempt to establish a relationship and connect the ad-serving platform with your web analytics platforms. But don’t stop there! Create a relationship with all your backend data and your web analytics tool. It is possible to send all kind of data to web analytics platforms (if supported) such as:
- pre-click data and view-through data (from ad-serving platforms) – finally!
- exact amount of orders (XO) sent from backend (using e.g. transaction ID) – no more guessing!
- profit data – YES!
- online/offline marketing costs
- offline marketing activities
- i.e. all kind of backend data etc. etc.
Using this data the online marketer can measure the performance of his online activities with new cool metrics in web analytics and could also use the VTR data in a whole new dimension to analyse its contribution to sales. The online marketer will have ”complete” control (with the campaign tracking in place) over all his online activities because firstly, the exact amount of orders is sent from backend system and not through a code snippet. Secondly, profit data is uploaded into the platform. Thirdly, we can upload all cost data. Finally, ad-serving platforms can upload pre-click and impression data.
WIN WIN WIN
Today it is not possible to send data into Google Analytics but it I reckon it is a matter of time someone out there will build something with the Google Analytics API. In the meanwhile you can create advanced Excel documents using the same logic described.
Finally, in the Online Marketing Analytics model, online marketers should always attempt to optimize landing pages or banners for their online campaigns using tools such as Google Website Optimizer, Visual Website Optimizer or Adobe Test&Target etc.
During the campaign period the XCPO and contribution effects should be monitored through the sophistication of the ”new” system integration (described above) and there should always be attempts to reach a better conversion rate and maintain a healthy XCPO level!
I hope you enjoyed the article please leave a comment if there is something you want to add.. if you would like to know more about this process, then please contact me and I can explain more or guide you to a vendor