[Wow, long time no blog post. Good to be back at it...all part of the New Year plan!]

Once of the most basic segmentation dimensions in web analytics the differentiation between new and return visits. Understanding the different types of behaviour of new vs return visitors can be critical in understanding how people are interacting with your site and then taking steps to optimize accordingly, based on your objectives. As always, different web analytics tools deal with new vs return visitor metrics in different ways. SiteCatalyst, for one, does not make it easy to tell at a glance your % of new/return visits.

With Google Analytics, % new visits is right there in the default dashboard. In GA v5, it even gets its own pie chart, in addition to spark line, right out of the box:

% New Visits on Google Analytics dashboard

Meanwhile, in SiteCatalyst (at least up to v14), things are not as clear. This is not to say information on new vs return visits is not available: indeed, there are a slew of reports in the ‘Visitor Retention’ section, such as Return Frequency, Return Visits, Daily Return Visits, and Visit number that provide some great, detailed insight into visitor behaviour. But these suffer from lack of context or unnecessary level of granularity if I’m just trying to gauge the overall balance of site traffic in order to decide where to prioritize my efforts.

Probably the best option is the getNewRepeat plug-in that Omniture offers (search for ‘getnewrepeat’ in the Omniture Knowledge Base), but this requires additional implementation and may not be feasible.

So here is a little tip to demonstrate how to fiddle with SiteCatalyst just a bit to get an easy-access report on % New Visits:

1. Go to ‘Visitor Retention’>’Visit Number‘ – select ‘Visits (Report Specific)’ as your metric (of course this same process could be used for Revenue or other metric). If you select ‘Percent’ in the Graph options, you can see right away that x% of visits are ’1st Visit’: i.e. NEW visits/visitors. But this is just a snapshot for the selected period, and it is usually more informative to see the trend over time.

% Visits ranked by Visit Number in SiteCatalyst (1st Visit = New Visits)

2. Using the ‘Trended / Ranked’ option, select ‘Trended’ – now you can see how the % 1st Visit (NEW visits) is changing over time and take action accordingly.

% Visits by Visit Number Trend in SiteCatalyst

3. Add to bookmark or dashboard for quick access in future and ‘Bob’s your uncle’.

A couple other related things:

• as bonus info, by default SiteCatalyst shows the % of visits for each of the top 5 visit numbers; you can use ‘Select Item’ on the ‘Report’ tab to filter on ’1st Visit’ only if you want to focus attention, but having the higher visit numbers visible can signal where the increases/decreases in the % New Visits is coming from/going to.
• if you want to look beyond visits to outcomes (which of course we do!), it is simply a matter of selecting another metric using ‘Add Metrics’ and you can see what % of revenue, for example, came from new visits vs 2nd visits, etc.

So What?

So now that we are able to quickly monitor our % new visits, the big question becomes: what to do about it? Depending on your goals, starting point, and context of other metrics, the interesting pattern shown in the chart above may be good or bad. If you are prioritizing acquisition of new customers, a declining trend in % new visits may indicate lack of success in your efforts. If you are focused on developing relationships with customers and bringing them back to your site, a decrease in % new visits may be a reason to pat yourself on the back, and continue your visitor retention efforts. It’s all about balance, though: the trend toward the end may be a signal to keep an eye on this metric and watch for the point where it makes sense to step up the visitor acquisition initiatives to fuel longer-term growth.

A company I know was focused on attracting new visitors, and the trends for both new visits and overall visits were up up up. But a quick look at the % New Visits report showing near 80% New Visits highlighted the fact that few of these new visitors were returning: time to re-balance efforts to ensure that new visitors are finding content that will keep them coming back.

So being able to track your % New Visits can be quite useful, and in case you didn’t know how to do this easily within SiteCatalyst, now you do.

The Web Analytics Forum on Yahoo! Groups was started back in 2004 by one of the giants of the web analytics industry, Eric Peterson. Since then, it has been a major hub for web analytics community news, events, and discussion – so much so that Avinash Kaushik was included “You have not only heard of the Yahoo! Web Analytics group, but 20 minutes of each day is spent reading all the posts”  as item #9 in his Top Ten: Signs You are a Great Analyst.

After being out of the loop of the Web Analytics Forum for a while due to some email changes, I was recently reminded of the relevance of this forum and subscribed again for daily updates. While doing so, I noticed some interesting stats on message history that are shown at the bottom of the home page. Being the type of person who processes data much better when it is visually represented, rather than being shown as numbers in a table (as I believe most of us are), I dropped the data into Excel and created the quick chart shown above.

I was disheartened to see that although message volume on the forum grew fairly steadily from inception in 2004 up until April, 2008, it has trended down since then. I have to admit that I have never posted a message to the forum, so I am as much a part of the problem as anybody, but from a community member perspective it is disappointing to see this resource waning. No doubt it is at least partly a result of the rise of social media and the resulting fragmentation of communications, but the Web Analytics Forum has a valuable role to play, in my opinion, as a central repository of current – and historical – information related to the practice of web analytics.

So I will continue following the Web Analytics Forum, looking for opportunities to jump in when I have something useful to add, and I hope others will do the same.

And to the forum founder Eric Peterson, as well as all those who have followed in his footsteps and contributed valuable information and insights to the Web Analytics forum in the past, present, and future…THANK YOU!

PadiTrack offers several advantages over Google Analytics for setting up goal funnels:

1. Historical data – with Google Analytics, setting up a goal funnel means the data is reported starting the day the funnel is set up, so no historical data is available. With PadiTrack, you can set the date range as far back as your Google Analytics data goes.

2. Segmentation – advanced segments can’t be applied to funnels in Google Analytics, but PadiTrack provides the opportunity to apply segments, including custom advanced segments that you have set up in your Google Analytics profile! (Late-breaking: the *new* Google Analytics now in beta allows for segmentation of goal funnels – but it’s not fully rolled out yet.)

These strengths make PadiTrack a powerful tool for monitoring progress down the goal funnel, but also make it very useful for understanding navigation from one page to another.  This especially applies if you have a dynamic site and want to understand the movement of visitors from one page ‘type’ to another. For example, you may have ‘product category‘ pages with URLs like ‘www.site.com/category.php?cat_id=111‘ and ‘product detail‘ pages that have URLs like ‘www.site.com/product.php?prod_id=123‘. If you want to know frequently visitors go from category to product pages, you have several options:

1. Simple calculation: If the only way a visitor can get to a product detail page is via a category page, the calculation is straightforward, based on unique pageviews of each type in the Content Report. But modern sites are rarely so strictly laid out, since we usually want prospects/customers to be able to get to product detail pages via search (off-site or on-site) or other convenient means.
2. Set up a Google Analytics Goal Funnel either with with product detail pages as end goal, or as part of larger goal. Sensible approach, but doesn’t help if you want to see last month’s results in order to make a decision on testing priorities. Also, only the first step can be set as required, so it is not uncommon to see leakages in to the funnel steps from pages that are not previous steps. And you can’t segment the funnel data – at least not until you have access to the new features currently in Beta.
3. Use the ‘Navigation Summary’ report, which is helpful in getting a sense of flow through a given page. But it only applies to individual pages (including previous and next), is based only on clicks, and only shows a limited number of pages in the ‘next’ list. The ‘class’ of pages we want to measure may be dispersed over a large number of individual pages.
4. Use ‘In Page Analytics’: again, only one page at a time and, while it can be a helpful visualization, tends to be an unreliable data source.
5. PadiTrack gets around all these issues! You can use various match type options or regular expressions to identify page types by URL or Page Title (bonus!), select your desired date range, and *boom* dat’s it. For more granularity, you can filter by top referrer or top keyword or apply GA advanced segments.

Example: setting up first step in PadiTrack

Once you set up your steps – as few as 2 or as many as 5 – PadiTrack will create the funnel on the fly for your chosen date range:

PadiTrack Funnel/Navigation Path

So we can see in this case that about 15% of those visiting a category page went on to a product detail page during their visit. Depending on our expectations/goals, this may warrant testing changes to the category page design in order to improve flow-through to product details. Or you can extend the funnel by adding more steps (up to a total of 5) to assess further progress toward the end goal. Or you may compare this to other key navigation steps on your site to prioritize testing efforts. All easy to do, with results available in minutes.

Care to share any thoughts or experience with PadiTrack or other conversion funnel/navigation tools? Please do!

Out of the box, Google Analytics displays URLs in Content reports without using the domain name (‘page1.html’ instead of ‘www.mysite.com/page1.html‘) . This makes sense in most cases, since it is redundant and you probably know what your domain name is. However, there are a variety of situations where you may want to display the full domain name, most commonly when your site is spread across multiple subdomains. (www.mysite.com, store.mysite.com, blog.mysite.com, etc.)

It is easy enough to add a filter to your profile that will cause the full domain/subdomain to show up in your Content reports. (And, of course, if you want to track across multiple domains and subdomains, you’ll need to modify your GA tracking code to accommodate this.)

Potential Issue: Page Data Split Between Two Versions

All well and good, but there is an issue that arises when the full URLs are displayed in Content reports on sites where visitors can access the site at both ‘www.mysite.com’ and ‘mysite.com‘. As a result of these two versions of  the domain, the same page may be reported on separately, in the ‘www’ and ‘non-www’ versions:

In the example above, the same page is shown in two separate versions, one with 16 pageviews and one with 6 pageviews. Not cool.

For search engine optimization,  this causes canonicalization issues and is best dealt with via 301 redirect. However, this may not always be possible – at least in the near term, particularly if you don’t have access to your server settings – and you may want to have your data as accurate and relevant as possible NOW.

Solution

By applying an additional filter ahead of the filter that adds the domain to the adds the domain to the URI, we can force Google Analtyics to include the ‘www’ at the beginning of the domain in cases where it is not already present. The desired result:

Here we can see that the data for ‘default.aspx’, previously split between two ‘pages’ in the report, is now consolidated to give us a more relevant picture of what is happening with visitors to the site: 22 pageviews of this page (16 + 6). Aaahh…that feels better!

Two Filters Used: one to add ‘www’, one to show full URL

This solution was reached by applying two straightforward filters to the GA profile:

1. A filter to recognize situations where the hostname starts with the ‘raw’ domain without ‘www’ (‘fig4.com’ in this example) and then adds ‘www’ at the beginning of the hostname in these situations. This filter will not add ‘www’ in cases where it is already present, nor will it add ‘www’ in cases where the page is on a subdomain. It does assume that you have a single domain, so it would have to be modified in the case of cross-domain traffic. It also assumes that you want to add ‘www’ to all URLs, as opposed to removing ‘www’ from all URLs. If you prefer no ‘www’, just flip the fields around.

2. The usual filter for displaying the full URL including domain. I have included a leading ‘/’ in the Output To -> Constructor – this is not typically recommended in official documentation, but I did see it recommended somewhere by one of the big names in the field, so I figured I should try it and have seen no adverse affects.

That’s all there is to it. Works for me and I hope it will work for you, but let me know if you have any feedback.

This post goes out to my friends at www.CIGNA.com (or CIGNA.com if you prefer ).

#Fail:

One approach that I had high hopes for didn’t pan out. Not sure why:

Web Analytics Tool Usage

Mediative (formerly Enquiro) recently presented a webinar called ‘Analytics and Reporting – How to Define Metrics…‘ as part of its B2B Expert Series.  Insightful presentation, as always. During the broadcast, viewers were offered the opportunity to complete a poll and indicate the analytics platform they are using. Here are the results, from January 25, 2011:

Source: Mediative webinar 'Analytics and Reporting'; Jan. 25, 2011

Not surprisingly, Google Analytics is the dominator, being a widely known and freely available solution. The result is a 75% market share for Google Analytics with this audience. The major paid solutions fall into line pretty much as expected, with Adobe’s Omniture at 10%, Webtrends and 4%, and IBM’s Coremetrics on less that 1% of the sites polled. Red-headed step-child Yahoo! Web Analytics was not offered as an option in the poll, but presumably comprises some portion of the 4% in the ‘Other’ category, along with Unica and…others. A little disturbing to see in this day and age that 6% of the sites of the participants in the poll have no web analytics.

I don’t know the size or composition of this audience, so it’s hard to say how representative this data is. Mediative webinars usually attract an audience in the hundreds, from a fairly broad cross-section of industries and company sizes, so this is probably not too far off the mark for North American business sites in general.

One thing poll respondents weren’t offered was the chance to indicate more than one analytics solution. Would be interesting to see how that option would change results – I suspect it would skew the results even more toward Google Analytics, since it is not unusual for sites with a paid solution in place to use GA as a back-up/alternative.  The ‘Other’ category would probably get a boost as well, especially if people included things like voice of customer or audience measurement tools.

Site Tagging for Web Analytics

Coincidentally, in another webinar on the very same day, Eric Peterson (Web Analytics Demystified) referenced data on the number of sets of tracking tags that companies nowadays typically carry on their sites. This was in a presentation called ‘The Myth of the Universal Tag’, hosted by Josh Manion of Ensighten and also featuring Brandon Bunker (Sony). Lots of thought-provoking info on the value of tag management systems, but the data in question showed that almost 1/2 of the top 100 internet retailers have 3 or more sets of web analytics tags on their sites, and 85% have 2 or more sets. Since these are large, presumably sophisticated sites, they may be expected to have more tracking tags placed on their pages, but the overwhelming extent to which this is happening suggests that it is likely common on smaller sites, as well, which is supported by observation.

Source: Whitepaper 'When More is Not Better: Page Tags' by Eric Peterson, sponsored by ObservePoint

This data originated from ObservePoint and was previously published in a paper called ‘When More Is Not Better: Page Tags’, written by Eric Peterson and sponsored by ObservePoint.

Conclusion

So a couple of snapshots of the current state of the web analytics landscape: lots of solutions in play, and lots of sites leveraging multiple solutions. No doubt further consolidation will proceed in the industry, although it is likely that new tools will also emerge, so it will be interesting to see how the market share relationships change over time.  Tagging of sites with multiple tools will no doubt continue and possibly expand, so it will be interesting to see how the use of tag management solutions evolves to deal with this proliferation.

(For many sites, there is no noticeable difference between the ‘Top Content’ and ‘Content Drilldown’ reports.)

The difference, as demonstrated in the screenshot below, is this: the Content Drilldown report (as its name admittedly implies), shows activity at the folder level, not just page level.  Depending on the structure of a given site, this can provide a very useful aggregation of data by folder that allows for easy comparison of performance between different sections of your site.

This example is for a site that is almost entirely structured in folders. Other than the home page (/index.asp) everything in the Content Drilldown report represents different sections of the site, organized by content.  ’Index.asp’ shows up in the report because it is at the root level of the domain. So by rolling up all the pageviews in a given section, we can see in this example that while they are doing pretty well on the ‘shopping’ section of the site, in terms of exit rate, they are losing a lot of visitors in the ‘ideas’ section. Could be a good area to focus on for improvement!

And from here, when you click on one of the items in the report, you drill down into the next level of folders/pages. (Note that at each level, the number of ‘pages’ viewed refers to folders and/or pages at that level – hence the difference between the number of pages in the ‘top content’ and ‘content drilldown’ reports in the first example above.)

It’s also worth noting that if you are tracking different subdomains within your site and you have a filter in place to show full domain names in content reports, the Content Drilldown will start at the subdomain level.

With the advent of more flexible custom variables, site sections can also be tracked by applying these variables to pages. That approach has some advantages, but it involves changes to the GA tracking code. (And warrants a separate blog post!) Meantime, if you have your site architecture in order, the Content Drilldown can get you a long way right out of the box.

More and more of us are using mobile handsets to access the internet, and we frequently see headlines declaring  that ‘mobile internet will soon overtake fixed internet‘ or advising us to ‘forget desktop, its all about the mobile‘. And of course this time of year we get the usual predictions like ‘the one big trend is mobile‘ and ‘mobile will finally take off [in 2011]‘. There’s no doubt that significant momentum is building in terms of online activity by mobile users. And it’s not just anecdotal: there are reliable statistics backing up these claims.

But, as usual, it’s a good idea to take a deep breath and analyze the data a little closer to home in order to separate the general hype from your specificreality before making any rash business decisions. These are very broad trends the pundits are taking about. Often, the data is consumer-oriented. Is it time for B2B businesses to ramp up investment in mobile advertising, site functionality, and app development? Are we there yet?

In order to get a sense of where things stand, I took a quick look at the data for 10 B2B sites* to gauge the impact of mobile traffic. These sites are operated by companies of various sizes (mostly medium-sized businesses), covering a range of business sectors, with various levels of site traffic*. Really, about the only thing they have in common is that they are selling goods and services almost exclusively to other businesses.

Here are the results:

Strong and steady growth in total mobile traffic to 10 B2B sites, although curious dip since Sep-10.

Across the 10 B2B sites analyzed, percent of total traffic has grown strongly and steadily, except for recent declines. However, it remains well below 2% of total traffic from these 10 sites.

Significant differences in the amount of mobile traffic to individual sites, varying from strongly positive trends to relatively flat, with some volatility.

Except for one outlier that has reached the 5-6% range, mobile traffic is still below 2% of total visits for these sites.

So we can see that the growing trend in mobile use is starting to have a measurable impact for B2B sites – but only starting.  It is also worth noting that the trends are not unwaveringly upward, as pundits may imply.

It should also be pointed out that this analysis only considers visits. To get a more informed look at the impact of mobile traffic on your site (and to investigate traffic fluctuations that may be present), it may be worthwhile to also look at engagement metrics and data on outcomes. Mobile traffic may be small, but may be delivering a disproportionate share of conversions. Or there may be a lack of engagement if your site is not mobile-friendly. Also, by looking at unique visitors, you can gauge the actual number of people that are accessing your site via mobile devices – could tell a different story than visits alone.

Your results may vary, but this may provide some additional context with regard to mobile usage for B2B sites. This may not be the time for action and investment in catering to those mobile users, but it is probably a good idea to check in with your web analytics data – and your qualitative voice of customer data – so that you are ready when the time does come.

What do you think? Am I being too conservative? Are you getting out ahead of the curve and experiencing success with mobile in a B2B environment? Interested to hear from you.

*Background: 10 U.S. and Canadian B2B sites in various industry sectors; average visits per month per site ranging from ~10,000 to ~150,000 visits; data source for all sites: Google Analytics.

As part of Google’s phasing out of the AdWords Report Center, the traditional ‘Search Query Performance’ report is no longer available. But there are new and better ways to get this critical data!

Using Google AdWords reports to track performance of the keywords you are bidding on is fundamental to search marketing success, and the ease with which this can be done is a source of delight for search marketers, especially when compared to measuring traditional forms of advertising.  If you are bidding on ‘industrial supplies’, for example, it is easy to get metrics like impressions, clicks, conversions, cost per conversion and then make decisions that will lead to better performance.

But most folks also realize the additional value of being able to look behind the scenes to see the actual search queries that users are typing in and using that information to refine campaigns.  Because if you are bidding on ‘industrial supplies’ on anything other than exact match, your ad will be showing up for a lot of terms beyond strictly ‘industrial supplies’. These could be: ‘cheap industrial supplies‘, ‘industrial supplies oregon‘, ‘industrial equipment and supplies‘, ‘industrial painting supplies‘ and thousands of other variations. The value of having this deeper insight into the terms triggering your ads is obvious.

Not so very long ago in the short history of search engine marketing, this was data was not as accessible as many would’ve liked, served up only in a special report, with large chunks of information missing. (The infamous ‘other unique queries’.)

Times change (quickly) and this industry evolves (rapidly) and now more complete search query data is available from a couple of sources. At the same time, the traditional Search Query Performance report has been phased out of the AdWords Report Center – along with just about every other kind of report. So let’s look at how we can get at AdWords search query data now:

1. Within AdWords Keyword data in UI: Recent enhancements to the AdWords user interface include the ability to generate an ‘on the fly’ report on search terms.  From the ‘Keywords’ tab, you can select the ‘See search terms’ button to go to a report on search terms.  This shows all the search terms used, with indications as to which ones are currently being bid on.  The nice thing here is that you can instantly add keywords or even add negative keywords directly from this report.  And you can also download the report in CSV format.

3. Google Analytics AdWords data: With the new AdWords reporting enhancements to Google Analytics, it is easy to get a look at actual search terms being used. Simply go to ‘Traffic Sources’>’AdWords beta’>’Keywords’ and then use the second dimension box to select ‘Matched Search Query’. Here you get a nice side-by-side listing of keywords you are bidding on along with matched terms.  The additional advantage, of course, is that you get all that juicy post-click behavioural data, such as bounce rate, goal completions, and – if you have Ecommerce tracking set up – revenue.

So there are 2 ways that I know of to investigate AdWords search query data and use it to improve performance of your keyword advertising. Both of these methods offer some advanced flexibility and power compared to the old AdWords Search Query Performance report.

As of October 26, though, Enquiro experienced a whole new dimension of change: the company was brought under the umbrella of a new entity, Mediative, put together by the Yellow Pages Group, one of Canada’s most well-established advertising publishers. Enquiro was one of three major acquisitions that have been combined with existing Yellow Pages online properties and an expansion of Yellow Page’s existing interest in Acquisio (a leading provider of online marketing campaign management software) to form Mediative. This is a potent mix, with some opportunities for great synergies, based on interlocking components of a wide-reaching advertising Network, experienced People with proven expertise in online marketing, and a sophisticated advertising management Platform.

The way I see it, here’s how it all fits together:

The Network:

The Yellow Pages Group already reaches 17 million unique visitors monthly through websites that are specifically targeted at consumers in the process of researching or making a purchase, such as AutoTRADER and Red Flag Deals. Ad Splash Media, another of the acquisitions that comprise Mediative, brings to the table a network of leading online retail brand sites such as FutureShop and Walmart, to which it serves relevant, point of purchase brand advertising. As if that’s not enough, UPTREND media, another company brought under the Mediative umbrella, has access to a community of publisher sites that reaches 15 million unique visitors, plus email newsletters, and more. That’s a huge array of highly productive online advertising opportunities.

The People:

With a network as expansive as the one Mediative now has, it can be a bewildering landscape for advertisers looking to reach as many potential and existing customers as they can, while maintaining a high return on their advertising spend. This is where the Mediative people come in. Enquiro has built a reputation for delivering successful search engine marketing campaigns and related online marketing strategies for major brands across North America, as well as undertaking definitive research into online search and buying behavior. This expertise has the potential to dovetail nicely with the Mediative network opportunities available and the existing expertise at Ad Splash, UPTREND, and Acquisio.

Beyond that, though, Enquiro will still offer clients in the U.S. and Canada a full suite of search marketing opportunities. The difference now is not just additional channel opportunities, but also additional people resources that can be accessed to provide service to clients  wherever they are located and wherever their markets are.

The Platform:

The final piece that helps bring it all together is a platform for managing marketing campaigns across networks and achieving high performance through data-driven decisions. With Acquisio and other technologies, Mediative has a platform in place to measure, manage, and optimize marketing results. This is particularly exciting to me, as web analytics practitioner who is always looking for more and better ways to get insights into performance and to report those back to clients.

The Conclusion:

As always in situations when different businesses are merged, it can take a while to get all cylinders firing. And it doesn’t always work as well as expected (“Hello, AOL-Time Warner!”). But YPG appears to have taken a very considered approach and it seems to me there is some great potential here. One thing for sure…there are no dull moments in sight!

Opinions expressed of those of the author and do not necessarily reflect the views of Mediative. It’s basically just me thinking out loud.

One of the most important components of effective web analytics is identification of key performance indicators that can provide a focal point for site improvement amidst the multitude of data points that are available.  Important as it is, though, there are still lots of organizations who don’t have their KPIs fully worked out. This despite lots of attention being drawn to this area, through articles like Avinash’s “KPIs to Die For” and, of course, Eric Peterson’s “Big Book of Key Performance Indicators” (now available free!).

In his book ‘Key Performance Indicators: Developing, Implementing and Using Winning KPIs‘, David Parmeter makes the point right on page 1 that there is a difference between key result indicators and key performance indicators.  These two types of indicators are often confused, but it is important to understand this difference and to delineate it in reporting, because while results are what we ultimately want, performance is where the action is.

Key Result Indicators

These are the measures that tell you how well you’ve done in terms of your larger objectives and provide “a clear picture of whether you are traveling in the right direction”, as Mr Parmeter says.  You can view these as being at the strategic level, measuring how well the chosen strategy is working. For web analytics, they are connected to company objectives for your website, and so would be things like:

• online revenue (ecommerce)
• leads generated (lead gen)
• visits (publishing).

These are obviously critical to track and report on, especially to those higher up the corporate ladder. They may be viewed relative to targets that have been set. But they do not tell you what to do to improve. This is where your key performance indicators come in.

Key Performance Indicators

The reason these are called ‘performance‘ indicators is that they are directly pointing at actions being performed.  The reason they are designated as ‘key‘ performance indicators is that they are critical to achieving our desired results. These are metrics at the tactical, operational level that may be far removed from key results, but nonetheless impact them. Because of their connection to operational activities, when one of our key performance indicators goes awry, we know what to do and it drives us into immediate action.

Parmeter gives the example of British Airways and plane delays.  In the 1980′s, BA apparently determined that of all the things that go into running a successful airline, delayed departure of planes created a cascading effect that undermined a ton of other activities and ultimately inhibited the company from achieving financial goals. Such was the focus on this KPI that if a plane was delayed beyond a certain threshold, a local manager would receive a call from a senior executive. Action taken (by the senior executive…and presumably by the local manager if he wanted to keep his job).

Identifying Key Performance Indicators

Identifying key performance indicators starts with clarifying your goals and the results that indicate your progress toward them, and then digging underneath those result indicators to uncover the performance aspects that have the biggest difference on the result indicators. The KPIs are not necessarily obvious, and the process of identifying and agreeing on them may require some extensive consultation with stakeholders.  Here is a basic framework with simplified example that hopefully gives a sense of the minimum requirements for developing effective KPIs:

1. Start by clarifying your goals. (increase monthly revenue from search engine visitors by 20% within 6 months.)
2. Define key result indicators that reflect your goals. (revenue from search engine visitors)
3. Identify key aspects of performance that are critical to achieving the desired results. (number of search engine visitors, percentage of visitors that make a purchase, value of orders placed by visitors who make a purchase)
4. Derive key performance indicators that reflect effectiveness or efficiency of these aspects of performance. (% increase in search engine visitors, conversion rate, average order value)

Once the KRIs and KPIs have been identified, it is then a matter of reporting on them, incorporating analysis of what is happening and what is being done to improve the situation. After all, there’s no point in identifying KPIs if you don’t have information-rich, easily distributable reports for monitoring trends and correlations and spurring decision-making.

Is that all there is?

None of this is to say that other data collected but not deemed to be key indicators should be ignored.  The point is to create some focal points for further analysis. Is conversion rate going down? Then let’s look at what search engines or keywords are responsible. Let’s check landing pages. Are products out of stock? Because we have key performance indicators to set the context, we can hunt down root causes and make recommendations that will flow through to improved results.

In addition, though, we still want to keep an eye on other metrics to spot changing trends that may either offer opportunities or portend troubles ahead.  There are lots of indicators that are not necessarily ‘key’ but could be relevant depending on the situation. But, in the absence of unlimited time for analysis, these take a backseat to thoes ‘key’ indicators that we should be monitoring religiously.

Final Word on KPIs

One more thing to consider is that in the constantly-changing world of online marketing, today’s KPI may be tomorrow’s irrelevant data point. And even the KPIs you choose today may not be as meaningful as originally thought: there may be others that get closer to the heart of what drives critical success factors.  So it’s a good idea to periodically review your KPIs for relevance, and even keep a couple alternatives in your back pocket in case they may prove to be more useful.

Moral of the story…there is no final word on KPIs.