Results-Focused Online Marketing Strategies

In recent weeks we’ve been gearing up to relaunch our website for the next “iteration” of our business. This involves doing things like registering domains for “client-branded” A/B testing, getting professional help to redesign our site, and implementing the tools we need to optimize our site.

Much like the “shoemaker’s children,” we’ve been going without a number of the things I tell clients they absolutely must have in place for effective website optimization. Well, we’re finally changing that, but as a young company we’ve still got to consider our budget (or lack thereof) for this effort.

This is where Google comes in. There are a couple of free Google tools that are mind-blowingly powerful if you leverage them well. Without further ado:

Google Analytics
While lacking the “Enterprise” power of major analytics providers (Omniture, WebSideStory, etc.), Google Analytics is incredibly robust for a free tool. Plus, it’s easy to install.

Even non-techy folk (like myself) can manage to implement it by themselves across their site and blog if they take the time to read through the instructions. I had it up and running correctly on our 50 page site and blog within 30 minutes.

Our implementation even included setting up specific conversion goals that we wanted to measure.

Interestingly, for some companies, Google Analytics is a better choice than some of the more robust offerings. The reason for this is that you’ll never get past the surface of what the Enterprise solutions offer unless you spend a LOT of time at it (trust me on this, I’ve spent days sifting through data in Omniture and WebSide Story).

Put it this way: unless you have a huge site or a large multi-channel effort (i.e. involving email conversion tracking and CRM), you’re likely just fine or possibly better off with Google Analytics.

Google Website Optimizer
Google Website Optimizer is a tool you’ll find within Adwords. It’s primary purpose is to quickly and efficiently conduct A/B testing on landing pages for clicks to your site from Adwords.

Put simply, you can create two dramatically different versions of the page that people land on when they click on an ad you have placed in Google Search or on a content site. Then, you track the results until you can determine a “winner” of the test.

For smaller companies, this saves an awful lot of hassle in setting up a script to randomly display the different pages in the test and having the web team manage the process. If you can edit your web page and put it online, you have all the skills you need to do it yourself if you’re willing to read the instructions.

Now, the beauty of this is that Google Website Optimizer works even if you’re not paying to run Adwords. The folks at Google are quite generous in these regards. All you need to do is sign up for an Adwords account (free) and you’ve got access to it.

Also, using the Website Optimizer is not limited to Adwords. For instance, assume you have two strong opinions on what headline should be on a product page. This usually involves an argument and possibly (50% likelihood) the wrong decision.

With Website Optimizer, you can quickly create a second version of the page (with the different headline). Simply drop a snippet of code on both pages, set your conversion goal in Analytics, and you’re off to the races. You can now run an A/B test on the page.

So, what are you waiting for?

For a while in my career I worked in a company where traffic was considered the main yardstick for success and growth. This became incredibly frustrating at times as, while there was always some more budget to grow traffic, getting budget for marketing optimization and conversion improvement was next to impossible.

While traffic is indeed a critical factor, it’s the wrong one to focus on if you haven’t invested in optimizing conversion on your web site.

Like George Kastanza figuring out a witty retort hours too late to use it, here I am some years later to present some pretty compelling math on why companies should focus first on conversion.

First, a couple assumptions:

• - The company in this example is selling a product (but the same principles work for ad revenues, B2B lead generation, etc.)
• - The company has not undergone extensive marketing optimization on their web site and/or promotions already.
• - There exists an opportunity to raise overall conversion rates by 5% or more (I have yet to work with a company where this is not possible).

In the first example below we have an example of a CPM banner ad where conversion is the only option as the ad is currently running at negative ROI (See previous post on Working the Math on Online Advertising).

As you can see, with the assumptions I put in, the ad campaign initial is returning only $.80 on each dollar spent on it. Despite the thought of “making it up in volume,” spending more on reach on this campaign will only drive it further and further into the red.

On the other hand, if the company takes the time to run some insightful a/b tests on the ad and the landing page, all of a sudden the campaign is making money (ads and landing pages present significant opportunities for conversion improvement). Best of all, the campaign is now scalable. In this case, the logical thing to do is to NOW increase the reach of the campaign until it hits a point of diminishing return.

In the second example, let’s have a look at web site conversion and the case for optimization versus spending on reach.

In this case we compare a 10% traffic improvement against a 5% conversion rate improvement (from 2% conversion to 2.1% conversion). “But Rob,” you might say, “we make more extra revenue by paying for traffic and we get 10% more people exposed to our brand.”

That argument would be true for the first month, but to truly understand the power of optimization, let’s look at the math over a year:

• - Buying 10% additional reach costs $50,000 per month, which equals $600,000 per year, for a 160% overall ROI in the example shown.
• - Paying a consultant or agency $10,000 a month for 4 months is a good guess for what it might take to get 5% better conversion on a site with these kind of revenues (hey, I never said this blog wouldn’t be self-serving sometimes). This assumes the site hasn’t already been optimized.In this case, let’s assume the 5% improvement kicks in 2 months into the process. What this math works out to is that a mere $40,000 spent on conversion will result in $400,000 in new revenues for a 10x or 1000% ROI.

That’s pretty compelling math, isn’t it? Better yet, you don’t have to choose one over the other. By doing the work of improving conversion FIRST, then adding the spend on reach, you now get an example that looks like this:
Wow. Keep in mind that no real life scenario is as simple as the case I’ve described. That said, these are incredibly powerful principles and I hope I’ve helped show you why it makes sense to focus on conversion before opening the wallet for reach.

BTW, despite my tongue in cheek reference to hiring a consultant or agency, conversion and marketing optimization is definitely an area where you should develop in-house skills if at all possible.