Cookies, clickthroughs, banner responses, email open rates, page impressions, keyword searches ... there is little doubt that digital marketing measurements far outstrip those of the offline world, both in terms of transparency and the type of data that can be collected. And advances in technology mean it is now possible to track customers' moves long after they have left a site, enabling brands to measure not only how customers have interacted with their sites but also where they have gone afterwards.
"In the early days, web and email analytics focused mainly on clickstream data and conversion rates," says Geraldine Tosh, managing director of online loyalty programme ipoints. "Now, not only are we seeing more sophistication in terms of creative techniques and personalisation, but there is improved tracking and targeting with segmentation tools and techniques. Also, online research is being used as a tool to measure customer satisfaction, attitudinal information and brand response." This insight is likely to grow as more digital media, such as podcasts and real simple syndication (RSS) feeds, are proving to be attractive marketing tools.
All of this is good news for direct marketers, but the downside of such a wealth of tools is the temptation to measure too much.
"There's a lot of post-click analysis available, especially in the way that web and email can be used together and the relationship between, for example, search and TV advertising," says Tim Millar, planning director at DM agency Claydon Heeley. "But with the amount of data now available, brands have to be much smarter about how they measure it."
The challenge brands now face is in assessing how to measure effectively across a range of digital channels and, more importantly, determine which one is converting prospects into customers and providing the biggest return on investment.
According to Richard Dunmall, managing director of integrated digital marketing tools provider Atlas, agencies and brands are finding it increasingly difficult to establish which channel has generated a response or sale and, subsequently, who should get paid for it.
"This problem is acute when it comes to online advertising because consumers interact with email marketing, banner advertising and search in unpredictable ways," says Dunmall. "This is set to grow as additional digital channels such as mobile come more into play."
The art of integration
Technology innovations are going some way towards helping marketers better measure the overall impact of digital marketing channels. For example, web analytics tools can now be linked to email, banners and viral campaigns.
"There's been a wave of new partnerships between email service providers and website measurement firms," says Mike Weston, managing director at email marketing provider Silverpop, which has set up partnership with the likes of Coremetrics, Omniture, WebSideStory and WebTrends. "Email marketers can start by optimising the integration between their email marketing and web analytics platforms. This enables a two-way flow of actionable information that allows them to target and trigger email campaigns based on the details of how visitors interact with a website."
But integration can be as daunting or as simple as you make it. The sheer amount of data that can be collected, exchanged and used is enough, Weston says, to "to give even stoic marketers analysis paralysis. The goal is relevance, not complexity, so start small. Choose a single campaign, prove the return on investment and then move on to the next."
Deciding which channel has returned the sale is also proving to be a grey area. "Clients just think in terms of the number of sales," says Mike Teasdale, partner at online marketing agency Harvest Digital. "There's a lot of value in, for example, a first click as it introduces customers to your website. By attributing different values to different clicks, clients can allocate their budgets properly."
The Royal Society for Protection of Birds' marketing department, for example, receives fortnightly or monthly automated emails on the performance of such areas as the membership, newsletter, campaign and donation sections of its website.
"We need to identify areas of the site that generate more visitor interest. Without stats, you could easily plough forward and invest in areas that aren't performing," a spokesman for the society says.
Richard Foan, managing director at ABC Electronic, which audits website, email and SMS activity, says there is growing insight available into how results across different channels can be compared.
"Increasingly, this is being done by looking at metrics from a user's point of view, rather than the channel itself," he says.
Another issue complicating the e-metrics process is the range of digital marketing media available and the sheer number of reports proclaiming one or other medium as the one in which to invest. Search is fuelling the growth of digital marketing, having recorded the biggest increase - 79 per cent or £338.7m - of all online advertising formats last year.
Marketers have recognised the benefits of search and are using it for direct response and brand building.
"Search seems to win out all the time and more brands are investing in the medium," says Atlas's Dunmall. "This is good for direct marketers but oversimplifies the measurement issue. Many tracking tools say that search alone has driven the customer there, taking no account of other channels that may have had an influence on the purchase decision. There is also the perception that if a rival is using a certain medium, I should be using it too."
Different elements of the digital marketing mix should be used at different times. For example, search is particularly effective for customers who are undecided about which supplier to choose.
"Banners and virals capture attention and educate consumers; search is useful when people are already attuned to the proposition," says Warren Cowan, managing director at search engine marketing services company Greenlight.
Few marketers have yet to harness the potential of mobile marketing.
Andy Cogland, head of strategy at e-marketing services provider Responsys, says: "Organisations are viewing it as a promotional channel - they are generating millions of responses but have zero to show for it on their databases. It's important because mobile is a 24/7 channel. But mobile measurement is in its infancy."
One size fits all?
Customer acquisition and retention through digital channels is a complex journey, not based or measured on one touchpoint but across many of them.
So is the answer to incorporate all the information into one database?
Direct response media agency Equi=Media has developed software that gathers data from affiliate marketing, search and banners into one database.
"There are lots of disparate systems using different packages to measure digital activity and each may also have a different level of accuracy," says Andrew Burgess, Equi=Media managing director. "Clients need to identify the best model and create links between points of contact and the purchasing process."
Most companies are still evaluating online channels in isolation, relying on the delivery vendor to provide statistics. Firms that are really embracing digital marketing are monitoring user activity across all touchpoints and analysing different channels to compare their effectiveness.
"They are not just looking at arrivals and sales but the proportion of new/repeat users, what sort of user each channel is bringing in and which channel is best at new acquisition, retention or brand awareness," says Garry Lee, head of client services at e-customer relationship management provider Redeye.
Digital measurement tools have matured enough to enable marketers to interpret data easily, whether they choose to use a combination of services or a one-size-fits-all approach. However, extracting and understanding the value that each channel represents compared with others is a different story. It is a challenge that brands are only just getting to grips with.
COMMENT
- Dela Quist, managing director, Alchemy Worx
"The problem with analytics software is that it can generate too much data. Companies don't get around to measuring a tenth of the data they have."
- David Smith, head of interactive, Clark McKay & Walpole
"Measuring the perception shifts that online marketing can achieve is a major challenge."
- Andrew Hood, managing director, Lynchpin
"Your search and email marketing will have strong influences on each other and measuring their results in isolation can significantly distort their true impact."
- Michael Peralta, chief revenue officer, Advertising.com
"Online activity is so much more transparent than offline, which means it is forced to be more accountable than other media."
E-METRICS REVIEW - Clients rate their software
Dmitriy Shlyuger, CRM manager, poker site PKR
The product: Google Analytics
The verdict: "Quite user friendly"
"I currently use Google Analytics. E-metrics is a challenge and the more data you generate, the harder it is to hold on to a single view of the customer. The program we use covers about 90 per cent of what we need to do. We can track acquisition and participation rates, loyalty and whether people are clicking through from campaigns we have sent out. We are likely to invest in a more comprehensive package as the business grows."
Jo Button, e-commerce marketing manager, Center Parcs UK
The product: Omniture
The verdict: "Improves our users' online experience"
"In the past two years, we have seen significant growth in the number of people booking online and have recently launched a website to support our online booking targets for 2006 and 2007. One area for improvement is our online reporting. We need the insight required to move forward with our web development as well as enhance our campaign management.
In the next two months, we will be launching our email contact strategy and Omniture will enable us to track everything online and understand channel performance from pay per click to email marketing.
"All tracking tools take a while to implement because your developers need to add code to pages. This can be a lengthy process if you have quite a lot of dynamic pages or forms. It can get very complicated because you can track everything from forms to whether visitors added a towel pack to their booking. My choice of tool depends on the fact that I am the main user and it suits my needs."
Ian Roddis, head of online, Open University
The product: Site Intelligence
The verdict: "Invaluable data"
"More of our business is going online. So our main requirement is to find a web analytics solution that will integrate with our current technology to enable us to analyse visitor behaviour on the site quickly and effectively.
"Site Intelligence does exactly what it says on the tin. We've already pulled off reports that have given us a fantastic insight that we can use for planning future marketing activity.
"In the past, we were only able to track where 10 per cent of purchasing visitors actually came from. Now we are able to see how people get to the site, how they use it and what purchase triggers are working.
"Site Intelligence also provides invaluable data on which partnerships are working best for us, what influences our customers and which marketing campaigns are driving consumer interest and sales."
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CASE STUDY - BSkyB
Brief: Reduce the broadcaster's cost per acquisition and increase sales
Target: audience Prospects and existing customers
Agencies: Glue London, i-level
Digital marketing agencies: Glue London and i-level set about using recent innovations in behavioural marketing technology, together with traditional direct marketing theory, to enable BSkyB's search, web design, advertising and affiliate activity to reduce cost per acquisition and increase sales.
"We had tested email and made a conscious decision that, in terms of online acquisition, there were other avenues we wanted to explore," says Joel Dawson, online sales and marketing controller at BSkyB.
When Glue London took over the BSkyB campaign, there were 300 to 400 terms used in its search activity. "With search, 60 per cent of people click on natural listings and 40 per cent on pay per click, so it's important to be in both," says Martin Baillie, planning director at Glue London.
"We expanded the number of terms to a few thousand. People don't search in the same way so we wanted to ensure there would be a Sky message wherever people went. This shortened the conversion journey."
Interaction has also been an important element of BSkyB's marketing strategy.
It used a combination of banner ads and an interactive poll, which generated 13,000 responses in seven weeks. The banner ads were also tailored to the stage of the relationship each customer had with BSkyB. These were broken down into 'anonymous', where there was no response to the ad, 'warm prospect', where a person would see an ad and click through, and 'customer', where the next ad would present up- and cross-sell opportunities.
The results
- Search strategies decreased cost per sale by up to 40 per cent.
- Affiliates doubled sales in the second half of 2005, compared with the first half.
- Average cost per acquisition was reduced by up to 90 per cent.
"Digital marketing is becoming highly evolved," says Baillie. "Targeting is by region, behaviour, demographics and interest of customers. Behavioural messaging will replace the one-size-fits-all model and engagement is our priority - we can quickly learn and test from new segments and approaches."
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