Visitor Intelligence News - July 2001 ======= ============ ==== ==== ==== Welcome to the latest edition of Visitor Intelligence News, the electronic newsletter from Site Intelligence Ltd. In this issue: - Measuring on-line advertising - Another court case over website visitor numbers - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | This is Site Intelligence's electronic newsletter. | | Newsletter contents are copyright (c) 2001 Site Intelligence Ltd. | | You are receiving this email because you subscribed via our website:| | http://www.site-intelligence.co.uk/ | | To unsubscribe or to change your subscription details, contact us | | at: newsletter@site-intelligence.co.uk | - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Measuring On-Line Advertising --------- ------- ----------- In the current climate it is more important than ever to ensure that marketing budgets are spent in a cost-effective way. The beauty of Internet advertising as opposed to traditional off-line marketing is that responses can be tracked and measured with much greater accuracy. But it is important to use the appropriate measurement techniques: simple measurements can give very misleading results which can in turn mean that marketing investment is wasted. This article takes a look at how visitor intelligence can measure return on investment from on-line advertising. TRACKING ADVERTISING RESPONSE When a potential customer clicks on a hyperlink to access your site, your webserver automatically records the URL of the page that customer was reading when they clicked the hyperlink. This allows you to identify precisely what attracted the new visitor to your site. Banner ads, links from partner sites, search engine placements and email marketing campaigns can all be tracked in this way. This feature of the web browser allows responses to on-line advertising and promotions can be tracked very simply. Just count the clicks from each unique hyperlink URL (“click-throughs”) and you'll know how many visitors each promotion has attracted. Because it is YOUR webserver that tracks and records the URL, there is no need to rely on any third party to obtain this information. But simply counting click-throughs in this way can be very misleading. Conversion rates vary dramatically from one promotion to another. For instance, suppose one banner ad campaign yields a hundred thousand new visitors to your site but only one in a thousand of these visitors go on to make a purchase. A second campaign, at the same cost, yields only ten thousand new visitors but 5% of these make purchases. The second campaign has by far the lower click-through rate but generates five times more sales! So ultimately what matters to the on-line business is not the click- throughs themselves but the sales that result from the click-throughs. With a more sophisticated approach it is possible to measure the revenues that are generated by each on-line promotion, and so get a true measure of return on investment. MULTI-STEP PURCHASING BEHAVIOUR As with most problems of website measurement, it is helpful to consider the problem from the customer's viewpoint. Think for a moment about a recent on-line purchase of your own. What attracted you to the vendor's website? What were your browsing actions leading up to the purchase? Unless your purchase was a true impulse buy, you probably visited the vendor's website more than once before making your purchase. Perhaps you browsed several other sites in the mean time to compare prices or availability. If the purchase was a major one, it may have taken you several days or even weeks from your first visit before you placed your order. It is rare for a website visitor to click on a banner ad and then immediately make a purchase. Customers who are interested in your product or service usually want to gather additional information before buying. For instance, they may compare prices and features with other vendors. They are likely to leave your website and return, perhaps more than once, before they place an order. The more expensive your product or service the more complex the customer's buying decision will be. So for pricey consumer items and business-to-business sales a purchaser might visit your site five times or more over a period of days or even weeks, each time gathering more information about the product, before finally committing to an order. TRACKING MULTI-STEP PURCHASES These return visits are usually made in one of three ways: a) via a bookmark; b) using the history function of the web browser; c) by remembering and typing in the URL of your site. In each of these cases, the return visit no longer contains the unique URL signature of the original hyperlink. So there is no automatic way to associate these return visits with the advert which attracted the customer originally. Fortunately there is a simple solution to this problem. Configuring the webserver to issue permanent cookies means that each new visitor receives a unique "tag" - the cookie - which can be tracked across visits. Suitable software systems - such as Site Intelligence's own VBIS - can use these tags to recognise returning visitors. With permanent cookies in place it is possible to track every visit by a given individual, from the original response to the on-line promotion to the final purchase. In this way the marketing team can relate promotional expenditure to the actual revenue that is generated, and so get a true measure of the return on investment from on-line advertising and other promotional activities. Another Court Case Over Website Visitor Numbers ------- ----- ---- ---- ------- ------- ------- Back in February of this year e-District CEO Steve Laitman was suspended and then fired over allegedly inflated website visitor numbers. Litigation is ongoing in this case. Now comes news of a second court case, again concerning website visitor numbers (see http://www.guardian.co.uk/Archive/Article/0,4273,4205249,00.html). This time the dispute is between financial services website Globalnet Financial and ISP World Online. It is alleged that visitor and subscriber numbers were inflated in a deal dating back to September 1999. It is sad but hardly surprising that cases of this type are reaching the courts. Visitor statistics play an important part in that accurate valuation of many commercial relationships between e-businesses. Management and investors need to be careful that statistics are being accurately measured to avoid the risk of future court action. White Papers ----- ------ A reminder that a selection of white papers, newsletter back issues and other information on visitor intelligence issues is available on our website at www.site-intelligence.co.uk. Feedback -------- We aim to make Visitor Intelligence News interesting and informative for all readers with an interest in website visitor intelligence, including but not limited to Site Intelligence's clients. We welcome your feedback on this issue and ideas for articles you would like to see in future issues. Please send comments and suggestions to: newsletter@site-intelligence.co.uk. Our next issue will be in around 6 weeks' time.