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EXAM 3 Study Guide

Terms in this set (232)

...
CORRELATION
correlation
A statistical measure that indicates the extent to which two or more variables fluctuate together.
A positive correlation
indicates the extent to which those variables increase or decrease in parallel
A negative correlation
indicates the extent to which one variable increases as the other decreases
A "0" value
indicates there is no (zero) relationship between the variables at all
A "-1"
means that there is perfect negative correlation
A "+1"
means that there is perfect positive correlation
questionable logical conclusion
That correlation proves causation is considered a
Causation!
Beware: Correlation is not
"Correlation does not imply causation" in that it is not always certain.
So why use correlation in marketing analytics?
It is always correct to say
true
The idea that correlation and causation are connected is definitely _____; where there is causation, there is likely correlation (reversed)
systematically explored
So yes - correlation can definitely indicate causation but only after it is _____ using large enough data sets and research
...
Correlation IS real regardless of causation. But for Marketing analytical purposes we want to determine if the correlation reveals some causation that we can determine and measure...
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REGRESSION
regression
A form of predictive modeling... note the word "predictive"
-Investigates the relationship between a "dependent" variable and a "independent" variable(s)
forecasting, time series and determining causal effect relationship between variables
Regression is used for
several independent variables using different scales
Multi-regression analysis allows us to review the effect of
linear regression
There are a number of different regression calculations. We will be using a "______" calculation using marketing data
295 = -4.959183673 (35) + 468.45
When we calculate the regression, we get an equation that we can use to forecast values

If the equation for the line slope is y = -4.959183673 x + 468.45, then what would be the forecasted unit sales if the temperature was 35 degrees?
P-values
work to tell us which relationships in our model are statistically significant and the nature of those relationships
-It describes the mathematical relationship between the independent variable(s) and the dependent variable.

After running your regression model check your plots first to be sure that you have good estimates. After that you need to interpret the statistical output.
inferential statistics.
Regression analysis is a form of____ The p-values help us determine whether the relationships that you observe in your sample also exist in the larger population.
null hypotheses
The p-value for each independent variable test the ______ that the variable has no correlation with the dependent variable.
dependent variable.
If there is no correlation, there is no association between the changes in the independent variable and the shifts in the


In other words, there is insufficient evidence to conclude that there is effect at the population level.
enough evidence to reject the null hypothesis for the entire population. Your data favors the hypotheses that there IS a non-zero correlation - or there is "significance"
If the p-value for an independent variable is less than your significance level your sample data provides
insufficient evidence in your sample to conclude that a non-zero correlation exists.
On the other hand, a p-value that is greater than the significance level indicates that there is
0.05
usual significance level is
model's precision.
It is standard practice to use the coefficient p-values to decide whether to include variables in the final model. Keeping variables that are not statistically significant can reduce the
Regression: a form of predictive modeling that investigates the relationship between a dependent variable (y) and an independent variable(s) (x)
-Used for forecasting, time series and causal effect relationship between variables
-Multi-regression analysis allows us to review the effect of several independent variables at once
-There are many different regression calculations - we have reviewed Pearson's
-The trend line can be used for simple forecasting

Results
A simple linear regression calculation (Pearson) will allow us to see a trend line with a slope that shows the relationship between our dependent variable (y) and independent variable(s) (x)
-That slope formula is of the form y = mx + b
-Slope (m) formula: (NΣxy − Σx Σy) N(Σx2) − (Σx)2
-b intercept formula: Σy − m(Σx) N
Regression summary
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RESOURCE ALLOCATION
Resource Allocation
ties together the various marketing analytics techniques to a firm's strategic decisions
Resource allocation
Marketing managers are often faced with the decision of the level of investment in different marketing activities - Advertising in so many formats, Promotions, Merchandising, etc.
We want to build a data-driven organization where marketing analytics is a critical contributor to its customer relationship efforts and to its bottom line
________ is the endgame of analytics for any company. Using marketing analytics properly any organization should be able to determine the optimal level of spending it should make on each of its marketing channels to maximize success
1. Determine the Objective Function
2. Connect Marketing Inputs to the Objective
3. Estimate Relationships Identified in Step 2
4. Identify the Optimal Value of Marketing Inputs
Resource Allocation Process 4 Steps
Intuition and experience are of huge importance in this step

It allows the marketer to correctly decompose a metric

For example, if a company is examining gross profits (aka the objective), what are the attributes of the business that contribute to those profits?
-What are the relationships between the various components within the business?
-Sales, for example, is a function of price, advertising, sales force, trade promotions, etc.
-Because gross profits minus marketing yields net profits, manipulating marketing channels can improve sales. But marketing is also a cost center as well...
Step 2 - Connect Marketing Inputs to the Organization Objectives
accounting identities (ID) vs. empirical (EM)
Once you connect the Marketing Inputs / Objectives you need to identify those relationships that are
Accounting relationships
are easily calculated and known.
Empirical
, however, requires much more work.
empirical relationships and the objective.
The empirical relationships (Unit Price, Advertising, Sales Force, Trade Promotions) cannot be added up and equated to sales

Marketing managers must analyze historical data to develop a function that transforms the marketing inputs into sales (for example, between price and sales, or advertising and sales, etc.)

The results are not going to be certain between the ______ It will require a "best guess" or prediction.
ID relationships, however, are certain.
...
SEE NOTES
Square boxes
are decision items for marketers - what should we price at? How much should I spend on trade promotion? How many salespeople should I hire?
The ovals
are metrics - quantifiable results from my actions. I know, for fact, what my sales were this past month. I don't know for sure which of my decisions (pricing, advertising, trade spend, sales force, etc.) affected sales the most.
The objective
here is "Net Profit" hence the rounded square box.
Resource allocation ties together the various marketing analytic techniques to an organization's strategic decisions (think pricing, trade promotions, sales staff, advertising)

The resource allocation process has 4 steps
1. Determine the objective function (Gross profit? Unit sales?)
2. Connect Marketing Inputs to the Objective
ID relationships?
EM relationships?
3. Estimate relationships identified in step 2
-Using statistical analysis to build econometric models with statistical calculations like regression
4. Identify the Optimal value of Marketing inputs

Marketing managers must understand their marketing efforts as precisely as possible to determine how much to spend on each marketing channel
-If paid search advertising is the -most effective way of getting a firm's message in front of the right customer, why would we spend more on print advertising?
-If sales calls are profitable only up to a point, you must know at which point the calls start costing you money instead of making it

The only way to measure the effects of marketing efforts on profitability is through the relationships revealed through marketing analytics and resource allocation modeling

By using statistical analysis marketing managers can then optimize spending on each channel
RESOURCE ALLOCATION SUMMARY .
Product analytics can help a manager with their product management decisions
PRODUCT ANALYTICS
Conjoint analysis
is our next topic and is a valuable tool for product managers to employ
-Can be connected to resource allocation by demonstrating that stronger brands and better-quality products can charge a higher price without a discernable decrease in demand
-Identification of product features that appeal to consumers to help a product manager determine the right balance between features and price
-It seeks to determine how consumers value the different attributes that make up a product and the trade-offs they are willing to make among the different attributes or features that compose the product
options
Features and attributes could also be described as "____" that come with a particular product.
tangible attributes that can be easily described or quantified
There are a number of different product analytics that can be used to look at these features (k-means clustering, conjoint analysis, etc.)
Conjoint analysis is best suited for products that have very
features considered jointly
Literally, conjoint analysis means an analysis of
...
Although it is difficult for consumers to state directly how much each feature of a product is worth to them (hard cover vs. paperback, higher price vs. lower price, used vs. new, short delivery vs. long delivery, etc.) you can infer the value by experimenting with the features and observing consumers ratings for that product or it's choices
1. research product
2. design experiment and select attributes and values
3. survey consumers
4. analyze results
Steps to conjoint analysis
The Utility value - or part worth -
corresponds to an average consumer preference for the level of any given attribute. Within any attribute the utilities are scaled in a way that they add up to zero.
negative utility
Also, a negative number does NOT mean a _____; it means that this level is on average LESS preferred than a level with an estimated utility that is positive
Product analytics can help a manager with their product management decisions

There are a number of marketing analytic techniques to do this including
-K-Means clustering and Conjoint Analysis are just two

Conjoint analysis allows marketers / product managers to
-Demonstrate that stronger brands and better-quality products can charge a higher price without a discernable decrease in demand
-Identify product features that appeal to consumers to help a product manager determine the right balance between features and price
-Determine how consumers value the different attributes that make up a product and the trade-offs they are willing to make among the different attributes or features that compose the product

There is a myriad of possible applications with conjoint analysis!
Product Analytics - Summary
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DIGITAL ANALYTICS
Easily captured
Tremendous detail
Timely
Relevant
The explosion in digital marketing and analytics is partly fueled by the tremendous amount of data available to us
Tagged
______ Web Pages Track User Activities
Tag -
A Few Lines of Code on Each Site Page to be Tracked
Data Capture
Requires Cookie to be Set on User's Browser
Session Cookies—
Good for Only 1 Visit
Persistent Cookies
—Good for a Specified Period of Time
Third-Party Cookies
—Set by a Marketing Services Provider
First-Party Cookies
—Set by the Website
...
Cookies -> Tags -> Metrics
Cookie on user computer
cookie identifies user on opt in sites
cookie transmits user behavior data for session to website
tags on web pages
captures user behavior data
can combine it with data provided by user
sends session data to metrics platform
identifies user to aggregate data across multiple sessions
metrics platform
maintains enterprise customer database
aggregates user data into site metrics
provides reporting platform
furnishes reports as scheduled or on demand
...
Designing Digital Experiments

Marketing experiments are an excellent way to determine the effectiveness of what we are doing
-Launching a marketing campaign clearly increases sales
-Not launching a campaign causes no change to sales
-Launching a marketing campaign today affects sales in subsequent time periods
-There were no other external factors (competitive action, government action, 3rd parties, etc.) affecting sales
With the previous question in mind, there are four key rules to determine a causal relationship between two variables or factors

establish causality.
To clearly determine whether the targeted sales increase could be achieved without spending marketing dollars, or whether any marketing spend is warranted, we have to
experiment
An ______provides a mechanism to manipulate one or more input factors while controlling all other factors and observe changes such as "sales" or "brand awareness"
after-only experiment
A very basic experiment that can be used is the
...
In the after only experiment example in the book, the brand manager recruits 1,000 customers...
½ are exposed to a new advertisement
½ are exposed to an old advertisement
Cereal purchases by the 1,000 customers is tracked
The difference in sales between the two groups will indicate the magnitude of the potential sales lift provided by the new advertising campaign
"After only"
is an experiment where you measure sales among participants of the experiment only after they are exposed to your marketing campaign
Sales increase in the short term
Sales increase in subsequent periods
This after-only design satisfies two of the four conditions for causality:

It cannot indicate whether the increase might have occurred without the new advertisement
remove a bias
Deciding how to distribute customers between the "test" group and the "control" group is critical to
randomization
attribute matching
There are two primary ways to select control groups
Randomization -
allocating participants randomly between the treatment group and the control group. Works well with a large enough sample size to provide fairly homogenous groups
Attribute matching
- selecting sample groups based on similar demography, geography, income, etc. Works well in offline for TV advertising in different markets. You want those two markets to be similar in attributes - "matched".
before after experiment
This experiment design requires you to measure the output of interest both before and after participants have been exposed to the inputs
both groups to the same old advertisement first to see if there is any difference between the groups you have divided
Then expose 500 to the new advertisement, and 500 to the old advertisement
This is very effective in controlling for all external differences between test and control groups.
Using the previous experiment example, with this design you would randomly divide the 1,000 participants into test and control groups just like the after-only experiment
The difference here is you would expose
In this example, if the product sold to retailers for $1.59 and the cost of goods is 99 cents then the unit contribution is $0.60.

If the sales lift in the prior example was truly $60 ($0.60 * 100) and the cost of an email sent to the customers is $0.10 per email to 500 customers then the total cost is $50.

$60 in sales lift... $50 cost in email campaign... ROI of 20%.

Metrics... analytics... effectiveness... efficiency... this is what we do in Marketing to be better marketers and make a difference in our organization.
In this "Before-After" example you can see that when both groups are exposed to the old ad before the new ad is implemented, the test group had a sales lift of 100 units without changing anything

Something else caused that sales lift and those 100 units are now used to set the new base for comparison to the new ad

Instead of starting with 1,000 units as a "base" measure we now start with 1,100 units

Now the lift in sales from the new ad drops from 200 units to 100 units
The explosion in digital marketing and analytics is fueled by the tremendous amount of data available to us
-Easily captured, tremendous detail, timely, relevant, quicker results, cheaper
-Digital would not be a good platform IF your target market is not online!

The more relevant and timely a marketing campaign is the more effective it is!
-Consumers don't mind ads, etc. that they expect or enjoy
-To make our marketing more relevant and timely we can track so much detail about our customers with cookies (session, persistent, 3rd party, 1st party) and technical markers like IP address, first time visitor, returning visitor, entry page, exit page, time on page, forwarding of emails, video viewing time - it's endless.
-We have discussed Web metrics, email metrics, social media metrics and video metrics. All are heavily used in marketing analytics.


Digital experiments are used heavily today. We must design experiments that answer the "cause / effect" relationship between our campaigns and the consumer response.
Digital Analytics Summary
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WEBSITE ANALYTICS
Understand traffic behaviors
Website experience pathing
Content engagement trends
Content vitality
Sharing trends
Collect Behavioral data for audience analysis, etc.
Analyzing clicks - the days of simply counting clicks and just using that, however, are over. We now look at what happens between clicks
Web page analytic tools are primarily used to
google analytics
clicky
crazy egg
kissmetrics
chartbeat

Others
FoxMetrics
Matamo
OpenWeb Analytics - FREE and "open source". Similar to Google Analytics.
And many more...
Website analytic tools
Google Analytics
Price: $0 to $150,000+
-Still the gold standard and used by many organizations
-Free for many analytics and small usage. Can cost $150,000 or more for large corporate data needs
Clicky
___analytics dashboard
Price: $0 to $79.99 / year
Powerful, flexible, often compared to Google
Actually has some features Google doesn't
Crazy Egg
- Price $29/mo to $189/mo - free 30 day trial
Has heat maps and scroll maps
Kissmetrics
$500/mo starting rate
Uses a conversion / sales funnel to gather data on each customer's journey through the site
Tracks individuals through multiple visits to your site - something Google does not do
Chartbeat
Estimated at $7,000 / year
Monitors how people interact with your content
Helps gather all your data into one place
A - Analysis - Who is the audience?
U - Understanding what the audience's knowledge and attitude is toward the brand.
D - Demographics - What is the a audience's age, gender, education, location and ???
I - Interest - Why is the audience reading, sharing and interacting with our content?
E - Environment - where does the audience spend time online?
N - Needs - What are the audience needs associated with our product or service?
C - Customization - what personalization and attributes of the site experience should we address in order to add value for the audience?
E - Expectations - what are the state and unstated expectations that the audience has for their interactions with our site?
Audience Analysis
Website Traffic
Traffic Sources
Lead Generation Costs
Conversion Rate
Conversion by Traffic Source
Customer Lifetime Value
Top / Most Accessed Pages
Exit Pages
Average Session Duration
Bounce Rate


Top Metrics in Web Site Analytics
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1. website traffic
Web Site Traffic
The top level metric that most marketers observe and focus on - total number of visits to a web site

Very easy to track and monitor with the numerous web site analytic platforms
Growing
Stagnating
Declining
Example - if you receive a huge spike in traffic after a FaceBook post OR a new display ad OR an improve site design for better SEO results you should keep doing more!

Website traffic is a good indication of whether your site is

do something quickly or you'll fail.
On the flip side - if your seeing a decline in site traffic it can tell you that what you're doing isn't working and you need to
...
Remember these statistics from January of 2018
-There are 332 MILLION registered domains that host
-Over 1.8 BILLION websites that are Served up by 7.2 MILLION computers / servers
How does your page get recognized when there are 1.8 BILLION to compete with?
"unique" and "repeat visits"
Web site visits are broken down into
Unique
- How good are we at acquiring visitors
Repeat
- How good are we at retaining visitors
getting new ones!
If your total visits growth is due to repeat visitors you're great at keeping visitors / customers... but you're not good at
...
2. Traffic Sources
organic search
referral
direct
social

Each of these provide extremely valuable information about your visitor behavior and your site
Four main categories of traffic sources are
Organic search
- traffic coming to your site via a search engine
Referral
- traffic coming from another web site
how many visitors come from other sites
Did you have a link on your FaceBook page to the site?
Did you post on another site and leave a link?
Does another web site have a link to your site
Can be an indicator of how popular your web content is to other sites!
Direct
- typing your domain into the browser
how many visitors reached you by simply typing in your URL into their browser?
Can indicate a loyal following - especially if they already know your web site URL
Social
- traffic from social media

how many visitors from a social network
Can provide metrics to analyze the success of your social media campaigns
...
SEO - we've discussed the importance of that. Always a source of traffic and will tell us how effective our SEO strategy is
...
3. Lead Generation Costs
lead generation costs
Analyzing the effect of a value per visit
-One of the most important metrics - how much are you spending to gather potential customer information?
high.

You're getting customers to "convert" but the cost to "acquire" them is losing money for you.
You may have a high conversion rate on your web site but that means nothing if your lead generation costs are very
your competitors!
A lower lead generation cost is a huge strategic advantage over
Qualifying

quantity
____ leads is more important than the ____ of leads you have
...
4. Conversion Rate
It is a different metric for different organizations / industries
It could also be a different metric inside the same organization depending on where you are in marketing or where the consumer is in the conversion path.
First - what is a "conversion"?

made an appointment with the doctor
clicked on my display ad
bought my product online
requested more information by filling out a form
gave us a FaceBook "like" or friended us
signed up to follow us on Twitter
Typical conversions would be number of visitors who
efforts are
Total conversions are important but it's the rate that tells you how effective your
Conversions/Unique Visitors
Conversion Rate =
Conversion!


Many think it is about "acquiring" customers... NO!
Think about that for a moment. Does that change your perception of web sites and their primary objective?
There are many other objectives as well (retention, customer service, etc.)
The number ONE objective of web sites is

...
The conversion rate has a huge impact on profits so you should be constantly optimizing your site for conversions
The slightest changes can have a significant impact
...
5. conversion rate by traffic sources
traffic sources to derive multiple "rates" by source.
Not all traffic sources should be treated equally
Conversion Rate by Traffic Source is calculated the same as the conversion rate except it is focused only on your

most valuable traffic
Examples:
Direct Traffic: 22% Conversion Rate
Referral Traffic: 27% Conversion Rate
Organic Search Traffic: 11% Conversion Rate
Social Media Traffic: 4% Conversion Rate


There is very important information in those numbers
Direct Traffic is the _____ as it is driven most by loyal customers keying in your URL to come straight to your site
Spend more effort on social OR
Don't put too much effort into it
Social Media Traffic (4% conversion rate - lowest) is the least effective and you should either



...
6. CLV
difficult
CLV is tougher to calculate because it requires that we follow customers around and establish their spending habits through repeat visits

Calculating the average purchase for all customers is easy but that includes first-time buyers, etc.
Calculating the value of a customer over the entire life time of visits and purchases is much more _____ because of the complexity of tracking. Make no mistake though - it is possible and is done.
...
7. Top/most accessed pages
page views and how those look as a percentage of total page views across your entire web site
Using analytic tools you can see your best performing / most accessed pages in terms of traffic volume

They display the number of
data showing what your audience responds to
-If you have 462 pages on your web site, what pages work the best? And why?
Top/most accessed pages is very important because it gives you real-world

more of it on your pages
Once you know which content your visitors like best then you can produce
...
8. Exit Pages
...
Does it seem odd to focus on the exit page of our web site? It shouldn't! Another very important metric for us to analyze.
Not every visitor bounces off your site from the home page
problem
The page with the highest bounce rate is a ____ unless it's the last page through your conversion funnel
Shopping cart experiences do not occur on a single web page. They have a path of product offerings, product selections, product prices, shipping, payment, etc.
Is there missing information? Misleading information? Too much hassle? High shipping costs? Problems with coupons? ???

where the problem is.
All along that experience are numerous pages and which page a visitor exits on will tell us
...
9. average session duration
average session time
Also referred to as "Site Stickiness"
-The average length of time in hours, minutes, seconds that a visitor spends in a session on your site
site for a longer period of time. Cause / effect!
Research shows a high correlation between conversion rates when a visitor is on your
difficult to navigate or has too much information on the page
Visitors are confused, lost
If the interactions per visit is low and the session time is high it could indicate that your web page is
...
Provide a good, clear, concise and direct offer to the visitor! Or an easy way for them to navigate and move through your site to the product / services they are most interested in
...
10. bounce rate
bounce rate
We want to minimize this rate
It is the amount of times new visitors visit our web site and then immediately leave it without completing any tasks
This is indicated with very little time spent on the website and no interactions
Irrelevant or weak sources of traffic
Poor "landing" pages
Poor design of site pages
Lengthy load times of your pages
A high bounce rate can indicate several things
"abandonment"
An ____ bounce rate relates to the sales conversion process in your shopping cart technology and , while important, it is different than a typical "bounce rate".
Web site analytics are one of the oldest digital analytics

They have some of the most advanced capabilities, however, for collecting, analyzing and report on on valuable data to understand audiences
-Still the #1 source used by professional marketers for digital analytics

Web site analytic tools are used to
Understand traffic behavior
Analyze website experience pathing
Content engagement trends
Content viability
Sharing trends
Collecting audience behavioral data

Web site analytic tools include
-Google, Clicky, Crazy Egg, Kissmetrics, Chart Beat, and many others
Audience analysis is important to determine the characteristics of our audience and choose the best style, format and level of information when designing a web site
Top metrics in web site analytics include
-Web site traffic, Traffic sources, Lead generation costs, Conversion rate, CLV, Top / Most Accessed Pages, Exit Pages, Average Session Duration, Bounce Rate
Web Site AnalyticsSummary
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DIGITAL AD ANALYTICS - DISPLAY ADS
Pay per click
display ads
content ads
There are a number of different types of digital ads
Pay Per Click ads (PPC) also called Cost Per Click (CPC)
- typically displayed as part of search engine marketing
pay per impression ads (PPI)
Display ads also referred to _______ - typically placed on 3rd party web sites
Content ads
- typically placed on YOUR web site with some type of promotional opportunity for the customer
What is your campaign objective?
As usual, the number one criteria for selecting a metric is the answer to this question:
...
CPA - Cost Per Acquisition
Total Cost of the Advertisement / # Acquired or Converted
CPA =
$8,166 / 84 = $91.21 CPA
Example: I placed a digital ad on a web site and spent $8,166 on the entire ad placement. During that time I had 84 people click on the ad and come to my web site. CPA =
other ways as well. It could be an estimate or forecast numbers as well as an actual results number.
One thing to be careful of - CPA can be calculated in
CPA
is a rate and can be used to measure effectiveness of an ad or numerous ads over time.
more effective you are. A CPA of $71.14 is better than a CPA of $91.21
The lower the CPA the
acquisition
Also note that CPA is strictly the cost of ______... which some interpret as conversion. You have to be careful and clearly communicate what you are measuring!
...
CR - Campaign Revenue
campaign revenue =
Total Revenue Generated by a Digital Ad campaign
...
Example: I placed a digital ad with Google Adwords and the number of orders placed because of that ad resulted in CR of $41,089.
simple as it may seem.
Calculating the CR is not as
ad related
It is easier to track when someone clicks on an ad, links to your home web page then makes a purchase (revenue)
It is much more difficult - but possible using behavioral tracking - to track when someone sees your ad then purchases the item later. Was that purchase related to the ad or not?
To truly get a solid CR number you would need to know definitively that a purchase was ______ - whether it was done directly (ad clicking / immediately linked) or later.
...
ROA - Return on Advertisement
= Total Revenue Generated / Total Cost of the Ad
ROA
$312,077 / $73,553 or 4.24 or for every $1 we spent on advertising we received $4.24 in return
Total Cost of the Ad could be as simple as the cost of ad placement, cost of ad clicks, etc. or it could include every single cost - ad creation, impression costs, click costs, etc.
Example: If an ad campaign had a total cost of $73,553 and it generated $312,077 then ROA =
profit
ROA is not the same as ROI which focuses on _____ more than advertising and is calculated differently
...
Cost Per Click
Rate set by a PPC ad you placed OR

CPC = Total cost of an Ad / number of people who clicked on it
CPC =
ad hosting site agree upon. You bid or agree to pay $.79 per click on your ad.
The first CPC amount is a rate that you and the
total cost by the number of those that clicked on it.
The second CPC calculation is when you calculate the total cost of an ad that might be impression based and then divide the
$100 / 40 = $2.25
CPC For example if I agree to have my ad show up on your web site and you promise 5,000 impressions (views) for .02 per impression then the total cost is $100. If 40 people click on that ad then the CPC is
...
CPC and CPA (cost per acquisition / action) are frequently used interchangeably. Be careful!
...
Cost Per Conversion
"What is a conversion?"

A "like" on facebook?
An acquisition?
A purchase?
Setting a doctor appointment?
The first thing to settle on when calculating cost per conversion is to answer the question:

beholder... it would depend on your area of responsibility


If you're a social media marketing manager then "likes" on facebook might be a conversion to you
If you're a product manager in marketing and trying to calculate then the sales in your shopping cart online web page might be a "conversion"
"conversion" is in the eye of the

take action or do something - "like" on facebook, "register" on a web page form, "sale" after a completed shopping cart check out
Basically, a cost per conversion is the costs associated with what it takes to get the consumer to
There are a number of digital ad formats and types
-PPC ads, Display Ads, Content Ads - know the difference
-Formats include Banner Ads, Skyscraper Ads, PopUp Ads, Interstitial Ads, etc.
-Digital Ads are typically measured in IMU's - internet marketing units

There are many metrics available for marketing analytics and many different rates / calculations we can use to assess the effectiveness of our marketing efforts
-CPA, CR, ROA, CPC, CPCO, PPC, etc.
-We have to be careful as some of those terms mean different things to different agencies, companies, people!
Digital Ad MetricsSummary
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DIGITAL ANALYTICS CONVERSION FUNNEL, EMAIL, VIDEO
A Conversion Funnel
is a graphic representation of the path that a consumer will follow to make a "conversion"
-It graphically (and textually) provides a view of the path and the success or failure of your marketing efforts to get conversions
conversion path
The funnel is useful to graphically examine the _______ and see where your marketing efforts are working or possibly failing
losing most of our customers
By quickly examining the shape of the previous funnel it should be obvious where our shopping cart path is
what we should do to fix an issue!
The conversion funnel doesn't tell us
optimize the path of the funnel
The biggest use of the conversion funnel is to ______ - "conversion funnel optimization" is used a lot when examining the conversion path.
square
A fully optimized funnel would have this shape =======>
super narrow
A poorly optimized funnel would have this shape ==========>
visualize
KISS
analyze
Test, test, test
Preparing a conversion funnel takes several steps
Visualize
the process you plan to implement in your process or "shopping cart" technology. It is crucial that you consider the customer at this point! Usability is of extreme importance to the customer's web-site conversion path.
KISS
- Keep it simple! Providing the most important and pertinent information to the consumer's process should be priority one. Don't distract them with other ads, pop up offers, etc. that may be unrelated at the time. Sometimes those can be allowed and are effective but you have to be careful.
Analyze
- select the metrics that matter to your conversion path and it's effectiveness for analytic purposes. Ignore those that don't contribute to that process.
Test, Test, Test
- Did I say test? You don't have to have to analyze this to death. Of course you must design and plan your conversion path. But don't fall into "analysis paralysis"! Testing is so easy and much cheaper in a digital environment
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Email Metrics
Email open rate
an important first step to determine the effectiveness of your email campaign but remember - it is not a sale however!
-_________ can indicate how effective your delivery was vs. hard-bounce and soft bounce numbers
hard bounce
bad addresses
soft bounce
blocked as spam, deleted before read, filtered out, etc.
open rate
the ______ can also tell you how effective the targeting of your email was. A good targeted audience will definitely provide more opens!
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open rate calculation
Example: 100 unique opens / ( 350 sent - 50 bounces ) = 33.3% open rate
The subject line
is one of the most important influences of an email open rate - is it compelling? Is it relevant? Is the brand in the subject? Personalization?
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email metrics Click-through rate
Click-throughs
are connected to some sort of call to action - an ad, a promotion, a link, a promise, etc. Must be compelling, timed and easily clicked
weak
As before - you want to make sure and calculate unique clicks only. Exclude repeat clicks.
A high "open rate" with a low click-through rate tells you that your call to action was
average
A CTR between 2-4% is an _____. But some of the best reach 15-20% or higher! Set your sights high and strive to beat the average. You can make a competitive difference.
...
CTR Example: 50 unique clicks / ( 1050 sent - 50 bounces) = 5% click-through rate. Better than average but you can do better.
CTR
_______ is considered the key metric in marketing email analytics!
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email metrics Click to open rate
click to open rate
Combines the open rate metric along with the click-through metric to compare the number of those that clicked to the number of people who opened
ALL emails OPENED
Previously the CTR was calculated as the number clicked compared to ALL emails SENT
The CTOR is calculated as the number clicked compared to
Disengagement Rate
How many recipients disengaged (unsubscribed, spam complaints, junked, etc.) compared to how many unique opens
.25%

Poor targeted list
Poor copy
Frequency of email is too high
Timing of email is irrelevant
A disengagement rate of below ____ is what you should stay below


Higher than that could indicate

disengaged recipients and dividing that number by the number of unique visitors
Example: ( 10 Spams + 15 unsubscribes ) / 2000 unique opens = 1.25%. Not good (well above .25%)
The Disengagement Rate is calculated by adding all the
Viewing of retail videos increased by more than 9 times at the start of the holiday season
Visitors who viewed product videos were 85% more likely to buy than visitors who did not
Visitors who view videos remain on the site for 2 minutes longer than other visitors and are 64% more likely to purchase
Retail sites that include video increase conversions by 30% and boost their average sale by 13
Research shows that consumers who view videos are much more likely to convert than those who didn't watch a video. MUCH more likely:
View Count
Play Rate
Engagement
Social Sharing
Click-Through Rate
Conversion Rate
Feedback
A number of these metrics have been discussed with web page, digital ad and email campaigns and would be calculated the same
Video Metrics
Before starting a video campaign, think of the video metrics first!
This will help you in designing your campaign when you acknowledge the important metrics you need to track and analyze later
The primary metrics for videos (and there are more) would be
View Count
The raw number of how many times your video was viewed - similar to a "hit count" for a web page
-This would provide the "reach" of your video campaign. If you want to be seen by 200,000 people in your target audience then you would want to track this metrics
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video metrics view count
Post your video on multiple platforms - your web page, your facebook page, in an email, on an ad, etc. Don't just put it in one place.
Share your video with important spokespeople or bloggers / influencers that relate to your target audience
How do you improve the view count number?
...
the view count is a simple yet important first step to analyze the rest of your video results. If you don't get a huge reach then none of the other metrics matter much.
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video metric play rate
Play Rate
The percentage of page visitors who actually clicked and played your video to some extent
-This can provide excellent feedback on how appealing or relative your video was to those that actually viewed the video
poor targeting or the video was irrelevant
It was also indicative that it was placed in a poor spot on the page
A low play rate may indicate that you did
total "view count" into the number of people who actually began playing the videoExample: 7,512 people saw the video and 2,344 began playing it for a play rate of 31%.
Play rate is calculated by dividing the
Move the video to a different position on the page
Change the copy to better match your target audience
To improve the play rate
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Video metrics engagement
Engagement
This is now treading in the "conversion" area

This can be broken down into
-How much of your video did the average person watch
-How many viewers re-watched, stopped watching and when they returned to watch
If viewers stop watching at a certain point (or a large number of them do) figure out why and modify your video
Maybe the video was too in-depth? Not entertaining? Do you show an ad for the product before your "how to" video?
Paying attention to the engagement is important
...
At the end of the day, the point of your video is to get watched!
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Video metrics social sharing
Social Sharing
Obviously shows how many times your video was shared

Can be an important metric for assessing the "viral" nature or impact of your video

Make it easy for viewers to share your video with buttons or social media sharing icons that can be readily clicked on

Pay attention to video comments - some marketers do and some don't. And it's obvious
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Video metrics click through rate
click through rate
We've discussed this with Ads, Emails, etc. and it applies here as well
-It is the percentage of video viewers that click on whatever "clickable" option you have to entice viewers to redirect to your web page or shopping cart technology or ???
Could be an ad in the video
Could be a button in the video
Could be a mouseover or other "trick" to redirect. Use caution with such devices as this! Could be considered deceptive and misleading.


Make sure whatever option you are using to entice them is relevant to the video being shown
If your video is a demo of a product in use then have the Ad be about purchasing that product and redirect to the proper landing page
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Video metrics conversion rate
conversion rate video
First you must define what a "conversion" is (remember?)
Filling out a form
Subscribing to your site or video channel
Making a purchase
Sharing the video
???

Can be difficult to measure accurately
-If someone watches your video repeatedly then purchases the product at the store a week later how will you know that?
target audience wants to know at that particular stage of the funnel process
Again - videos GREATLY affect conversion rates! Huge impact.
To improve your conversion rate make your video relevant to what your
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Video metrics feedback
feedback
This can also be considered in the "social sharing" as video viewers comment on your video

Will you respond? Some do, some don't.

LISTEN to the audience and their comments!
Very valuable feedback to improve your video content

Responding / Engaging viewers establishes a relationship with them and affords you an opportunity to personalize that relationship. Many viewers value engagement and a discussion online.

Don't take it personally. We've all see some pretty egregious comments regarding videos - personal attacks based on gender, age, appearance, etc. are not uncommon. There are jerks everywhere and especially online! But usually they are few.
THIS SET IS OFTEN IN FOLDERS WITH...