We are pleased to have Melinda Byerley as a guest blogger for Building Keystones.
Melinda is an e-commerce marketing and general management veteran, having held roles at eBay, PayPal, Check Point Software, and Linden Lab (Second Life). Most recently, she was the VP Marketing and Product for PlantSense, an internet device startup in the gardening space. She holds an MBA from Cornell University Johnson Graduate School of Management.
There’s a saying, “Climate is the contents of your wardrobe; but weather is what you put on today.” When it comes to web analytics, long term trends represent the “climate” and daily performances represent the “weather”.
Now, we all love launching new products, testing their performance, improving marketing efficiency and staying on top of our numbers. We don’t have to wait weeks for market data; we get it immediately, almost in real time.
So, which side of this situation have you been on?
Big VP: (sending email at 6 AM on Monday morning): “Hi! I’m on a flight to New York this morning and preparing for exec staff; and was checking our web analytics dashboard. Why is traffic down 10% today? What’s wrong? Need to know ASAP!!!”
Web Analyst: (pre coffee, checking email from bed, muttering to self): “Oh no! I was planning on spending this morning with the weekly dashboard and fixing some tags on marketing’s landing pages. Crap. Looks like another long day at work. Better get going early!”
Web analytics providers make it easy to monitor your metrics from anywhere, even from your mobile phone in bed (admit it, you do it too!) They can send automated alerts that would make a derivatives trader envious. The graphics are crisp, clear and gorgeous. It’s like a real world video game.
But, in many instances, the web analytics data that looks so credible is inaccurate. And even when it is accurate, focusing too narrowly on data can be an utter distraction from your company’s long term strategic goals.
Because all web analytics data is wrong.
You’ve probably spent hours QAing web analytics code, training, reading blogs and becoming an expert in the nuances of advanced implementation.
Unfortunately, the data you are collecting will never be 100% accurate. Here’s the reason why: Web analytics software is based on cookies placed on a user’s computer. According to a comScore report from January:
- ~30% of users delete 1st party cookies every month
- 47% of users delete 3rd party cookies in a month
- 4% of users accept no cookies at all
- At least some of your users get a new computer in a given month
- 30%+ of users use multiple computers (think home, work and mobile)
- Small sample sizes for day parts or markets/zipcodes lead to lower statistical validity. If you are sampling your web analytics data, it’s even more an issue.
So, your analytics provider cannot provide performance data on those who delete their cookies.
Additionally, there are some weather issues that may fool you or your business unit into thinking there’s climate change:
- In your test market there was a power outage yesterday so many people couldn’t get online. But you are 1500 miles away and have no idea. In this case the marketing may be just fine. No action may be required.
- A celebrity dominates the news. During the days following Steve Jobs’ death there was likely an increase of traffic to Apple’s website (and correspondingly perhaps less to Microsoft’s). Does that mean Apple’s strategy is better?
- You got a great write up in TechCrunch. Congratulations! But it shouldn’t change your business strategy.
- Your competitor launched a price promotion. Good to know; but again it should not impact your daily life until there’s a strategic direction change to be made.
- You had a site outage.
- Your web analytics tools broke in the last release.
All of these factors are going to impact your traffic but none are indicative of the success of your business strategy.
Make sure your managers and business executives understand this BEFORE you get that call from your VP or CFO. Managers: be realistic about this data and don’t over promise on it.
Meanwhile, get over it. Wrong data is still useful.
No, it’s not time to ignore your web analytics tools. Once you’ve made sure that you’re collecting the best data you can (It’s worth hiring consulting help to get this right. Knowing which data to collect is neither intuitive nor easy to check and there are literally thousands of edge cases), then it’s time to think about how to help your company take action from that data.
Climate change is real (but it still gets cold).
To get the most out of your web analytics package, encourage your business unit to spend more time focusing on the climate of your business:
- Year over Year changes (measured by week at least, but also eventually by day). This helps adjust for seasonality.
- Trends: Measure rolling 90 day and 180 day averages to spot anomalies quickly and even out spikes caused by holidays, weather, promotions, product launches, competitor movements and other one time events.
- Strategic objectives should be focused on the long term. Removing daily fire drills allows teams to stay focused on those critical things that must be done (you DO have a strategic plan that everyone can communicate, right?)
The fact that the Earth is warming doesn’t mean you won’t need an umbrella on some days. So too in business, there are times when daily weather is worth paying attention to:
- Launch of marketing campaigns/ROI in marketing: Pretty much anything the marketing team wants will need benchmarking and testing. Fast turnaround in measurement equals few dollars wasted.
- New product issues – positive and negative: Did that new checkout screen break your conversion rate? Did that new feature drive a higher conversion rate? Don’t wait a year to find out.
- Major news events that drive your business: When I was in the security business, we always saw an uptick in sales when virus or hacking outbreaks were in the news.
- Competitor launches a splashy new product: The folks at Amazon are definitely watching Kindle page traffic more closely every time a new iPad ships.
The ideal focus of web analytics is long term trending and evaluation of business strategy effectiveness (climate), with a splash of daily color (weather) to provide insight into smaller scale movements.
What other “weather” and “climate” issues do you grapple with? Does your business lend itself to a different approach? Let’s discuss in the comments!