Posts Tagged ‘measurement’
IAC earnings, Todays Online Economy
Posted by Jamie Hutson | Filed under Small Businesses, advertising, analytics, marketing, measurement, revenue models, web 2.0
IAC reported its first quarter earnings today, with revenue up 22% and income up 15%, you could say that they had a very good quarter considering the gloomy shadow over the economy in that period. Most of this is due to their Media & Advertising division which saw a 192% increase in income. The Media & Advertising division consists of ask.com, CitySearch and Evite along with their other online properties (exluding Match.com). This substantial growth can be contributed to a few things, but most notably I would point out this shows that the online advertising space is positioned to grow very nicely, particularly in the current economic climate.
The fiasco resulting from comScore’s under reporting of Google’s clicks was a good representation of how the internet is still new to many big players. ComScore, regarded as the primo player in online measurement published a report that tanked Google stock, sent online agencies and publishers into a panic and threw a shroud of false gloom over the entire industry.
While our company has seen a cutback in spending from some of our advertisers, and hesitancy from new clients to invest their marketing in a new space, for the most part we have seen healthy earnings growth, an expanding customer base and a large increase in traffic. A good friend of mine running a leading e-tailer of health products and services saw revenues up 38% yr/yr in Q1 of ‘08. Our company doubled revenues over first quarter 2007. Online is up and its good.
Today the US economy reported a modest .6% growth. “NOT TECHNICALLY A RECESSION”, “THE US ECONOMY SLUMPS THROUGH 1ST QUARTER”, “INVESTORS SEE RECESSION, WALL STREET DEPRESSION” - those were the various headlines across the internet. I did a quick search and found that every major news outlet had some sort of dreary publishing of this not so bad news. The Dow is up .9%, the NASDAQ is up .4% but everyone is running around declaring the bad news.
People are smarter than this (some people anyway) but its hard to ignore the warnings. I see people making smart decisions with their marketing money, which is basically me saying “I see people spending their marketing money online.” The yellow pages are dead, and even the YPs are building their online presence. Google’s huge numbers are back in peoples mind and small businesses want to be a part of that success. Money is being spent, and thus money is being made - online. Thats where the people are going and thats where the budgets are beginning to gravitate.
I saw a segment from Lewis Black last night where he was mocking the younger generations for spending hours online each day. I like Lewis Black, but he went on a rant that just was not funny to me. He sounded like someone from the Prohibition era talking about how young people spend all their time in bars, drinking. Well Lewis, its not just young people, and we aren’t just making fake friends on MySpace. We (meaning people who use the internet) are finding information, researching purchasing decisions, exploring entertainment (music, video, even TV) and building our network of contacts. I find it ironic that you can watch Lewis Black on YouTube, talking about how people waste their time on YouTube. Hey Lewis, how would you feel if I told you that 30% of the people who watch you speak, are watching you online??
Lewis Black has nothing to do with what I’m talking about, but everything. The online economy is heating up, profits are up, more people are online and more transactions are being made and researched online then ever before. The majority of these companies are seeing great profits and surging business opportunities. The old market is not what it used to be - The World is Flat and we can’t just keep measuring things they way we used to, otherwise everything will look all messed up.
Kind of like when the economy shows a better than expected growth rate, and thats a bad thing… what if we excluded all these online and new media companies from that number - how bad would it be then?
Analytics, Where did you get these?
Posted by Jamie Hutson | Filed under Life, advertising, analytics, measurement
In a recent fit of analytic interpretation, I really started digging down into our different analytical programs. Google Analytics is the most comprehensive we have, we use two different programs based on log files, and several script based tools.
Going back a ways to a post by Darren Herman, Numbers Don’t Lie, Except When They Do, he touches on a very important point in the measurement of visitors, which set of data is accurate. While there have been recent reports on deleted cookies increasing measured visits, there have been opposite accounts of under reporting.
My recent experience here evolved from a conflict that was directly affecting my advertising budget - Adwords was not agreeing with Analytics. In the process of tracking which Adwords keywords were resulting in the deepest visits into my site, I discovered that while Adwords was sending X amount of clicks per day, analytics was reporting fewer. In one keyword, Adwords charged us for 57 clicks, while Analytics was only reporting 43. Now that is a major discrepancy. While the value of this is not huge (at $.17 CPC) but at a percentage of difference this is major. For one particular campaign Analytics reports 1,049 visits from that keyword over the course of March, Adwords is reporting 1,246. These aren’t showing up as bounces, or repeats, these are just clicks from Adwords. If I was dealing with 5700 versus 4300, now we are talking major dollars, and major pains.
So then I head over to my AdSense account, and of course page impressions are different again. Google has responded with a fairly ambiguous explanation of log files versus scripts and varying reporting methods, but nothing on their own methods and why they disagree, conveniently to my disadvantage. I am certain that if they noticed my Adsense account was receiving more clicks than it actually was, they would fix it.
But back to the issue at hand, how are advertisers and agencies supposed to gather the correct data. One of my sites gets about 250k page views a month. According to Google Analytics - 60k. That discrepancy does not compute. Deleted cookies might inflate my unique visitor count, but how does that account for 45 GB of data transfer. And thats not email solely traffic to our website.
In December our sites crashed due to a server overload. What happened, did the 145 visitors that Google Analytics reported cause that? I doubt it. Quantcast, Alexa, SiteMeter… they are all way off. How do these all work. It is a learning curve for me, although I’ve been learning for a year and a half now, I still don’t get it.
Log files reported 120k visits to my network in March with over 750k page views. QuantCast reported 16k with 80k page views. Who am I to believe? Perhaps more importantly, who are my prospects going to believe?
The 5% rule
Posted by Jamie Hutson | Filed under Life, advertising, analytics, measurement, revenue models
I’m not sure that there is much scientific data to back this up across the board, but in my experience this theory/rule works. There is alot of click-through data, and conversion ratios that would support this as well.
My 5% theory is that ultimately about 5% of your efforts are ultimately going to succeed. Whether it is converting a lead in sales or converting a purchase on your website. And sometimes 5% is very good. The best online stores convert <5% of their visitors into a purchase, 3 - 4% is often considered excellent.
Now, this theory has alot to do with a lack of focus that many people, and most businesses have and is a by product of the long build up of the mass market. As the internet has grown in influence and instant communications have flattened and shrunken the world, the mass market is largely disappearing in favor of small, segmented niche markets. These markets are allowing niche businesses to succeed wildly by focusing on people who want, need and have a strong desire for their products or services.
My self learned lesson (recently and thanks to a little inspiration from Seth Godin), is that in business and in life, it is tempting to throw cast the wide net and see who we can catch. However, it is often quite to your advantage to focus on what you do best.
On the other hand, not every product has a tiny niche market that you are able to reach. There are many factors that might prevent you from reaching that market (technology, scale, personnel, etc), and sometimes you are better off going after a larger piece of the pie.
What I am essentially getting at is that in life and in business you need to focus on that 5%. Whether you choose to narrow your focus on a 5% niche, or you choose to take the 5% conversion rate you have and focus on increasing that. Instead of casting a larger net, focus on landing a high percentage of your casts. Maybe you narrow your business, or maybe you get better at it. Either way, the rest of the world operates at 5%, and you (and me) need to find a way to make that 5% more valuable.
So take a look at what you do, and see if you can do it better, grow that 5% into 98% or to 8% one way or another, the 5% rule will make sense in what you do.
