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January 2012

     Web Analytics: Marketing Beyond Online
                Customer Data                                                                                              Analyst Insight
As the volume of customer-related data (transactional, behavioral and                                                      Aberdeen’s Insights provide the
unstructured) continues to grow, marketing organizations are in danger of                                                  analyst perspective of the
becoming increasingly data-rich, but insight-poor. In July and August 2011,                                                research as drawn from an
Aberdeen surveyed 176 organizations regarding their use of analytical tools                                                aggregated view of the research
and processes in marketing campaigns and programs, with 93 of the                                                          surveys, interviews, and
responding businesses indicating that they are actively using web analytics to                                             data analysis
support their marketing activities. This Analyst Insight will identify how Best-
in-Class companies among those 93 respondents track, measure and use
online customer data to improve their performance in key indicators of
marketing program success. These metrics include marketing's contribution
to company revenue, and the incremental sales lift resulting from marketing                                                Aberdeen’s PACE Methodology
campaigns and programs. The analysis review key factors that help                                                          Aberdeen applies a methodology
businesses move beyond simply collecting customer data through their                                                       to benchmark research that
websites, to using this information as a strategic lever to help marketing                                                 evaluates the business Pressures,
become a truly data-driven function that has quantifiable impact on company                                                Actions, Capabilities, and
results.                                                                                                                   Enablers (PACE) that indicate
                                                                                                                           corporate behavior in specific
                                                                                                                           business processes:
Business Context
                                                                                                                           √ Pressures — external forces
The rising and falling tides of economic instability over the past three years
                                                                                                                             that impact an organization’s
have left many organizations engaged in fierce competition to survive and                                                    market position,
thrive. Aberdeen's Q2 2011 Quarterly Business Review study shows that the                                                    competitiveness, or business
top challenges organizations face in meeting their business goals are                                                        operations.
economic conditions (39%) and increased competition (36%). These harsh
realities put marketing at the forefront of the organization's drive to make                                               √ Actions — the strategic
the business stand out from its competitors, and to maintain and improve its                                                 approaches that an
                                                                                                                             organization takes in response
financial health.
                                                                                                                             to industry pressures.

Table 1: Top Pressures Driving Marketing Agendas                                                                           √ Capabilities — the business
                                                                                                                             process competencies
                                                                                 All Analytics Users                         (process, organization,
                                                                                                                             performance and knowledge
        Pressure to increase the returns from                                                                                management) required to
                                                                                 52%
                  marketing spend                                                                                            execute corporate strategy.
     Organizational pressure to deliver higher                                                                             √ Enablers — the key
                                                                                 51%
                quality sales leads                                                                                          functionality of technology
                                                                                                                             solutions required to support
   Faster response time to customer activities                                                                               the organization’s enabling
                                                                                 30%
           required for business impact                                                                                      business practices.
                                                                Source: Aberdeen Group, August 2011


This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.
and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.
Web Analytics: Marketing Beyond Online Customer Data
Page 2




Aberdeen's October 2011 study, The Marketing Executive's Agenda for 2012,
reflects these rising organizational expectations from marketing. Fifty-one
percent (51%) of all companies surveyed indicated they are holding
marketing accountable for demonstrating quantifiable returns on investment.
Data from Aberdeen's current study shows that 52% of the companies using
analytical tools (e.g. web analytics) to support their marketing programs are
struggling with organizational pressure to demonstrate quantifiable ROI
from their marketing spend, as shown in Table 1. Marketers need to use
online customer data for more than just managing website content--they
must leverage web analytics tools strategically, to improve targeting and
personalization and provide the right messaging / offer(s) at the right time to
each customer, leading to increased returns.
What better way is there to demonstrate the value of marketing besides
correlating marketing programs with selling results? Unsurprisingly, one out
of two companies using analytical tools to support marketing activities
indicated that they expect their marketing departments to deliver higher-
quality leads to support sales reps - see Table 1 above. Marketers are
challenged with using web analytics tools to convert information captured
through the website into high-quality leads for their sales teams. Aberdeen's
December 2011 Sales and Marketing Alignment: The New Power Couple study
affirms this finding; the second top organizational goal after increasing top-
line revenue is improving the quality of leads marketing sends to sales.
                                                                                  Defining Metrics

Best-in-Class Results                                                             The performance criteria in
                                                                                  Table 2 are defined as follows;
Aberdeen used two performance criteria to study how web analytics help
Best-in-Class businesses differentiate themselves from Industry Average and       √ Marketing's contribution
Laggards;                                                                           to company revenue: The
                                                                                    percentage of company
                                                                                    revenue that is attributable
Table 2: Top Performers Earn Best-in-Class Status                                   to multi-channel marketing
    Definition of                     Mean Class Performance                        campaigns and programs. It
                                                                                    is typically measured by
   Maturity Class
                                                                                    determining the percentage
                           65% of all closed business coming from marketing        of closed business that was
    Best-in-Class:
                            campaigns and programs                                  generated or influenced
       Top 20%
                           7.1% average year-over-year improvement in              (nurtured, touched) by
      of aggregate                                                                  marketing campaigns before
                            incremental sales lift resulting from marketing
  performance scorers                                                               resulting in a sale.
                            campaigns
                           11% of all closed business coming from marketing      √ Incremental sales lift
  Industry Average:         campaigns and programs                                  from marketing
      Middle 50%
                           1.7% average year-over-year improvement in              programs: Year-over-year
      of aggregate
                            incremental sales lift resulting from marketing         performance measure
  performance scorers
                            campaigns                                               demonstrating the impact of
                                                                                    marketing activities on
       Laggard:            2% of all closed business coming from marketing         improving organization's
     Bottom 30%             campaigns and programs
                                                                                    selling results.
      of aggregate         1.9% average year-over-year decline in incremental
  performance scorers       sales lift resulting from marketing campaigns

                                            Source: Aberdeen Group, August 2011
© 2012 Aberdeen Group.                                                                 Telephone: 617 854 5200
www.aberdeen.com                                                                             Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 3




Why These Metrics?
Aberdeen asked the survey respondents to rate the value of specific
performance metrics to measuring the effectiveness of analytical tools, in
this case web analytics, in improving marketing results. The top two
measures identified were Return on Marketing Investments (72%) and
incremental sales lift from marketing programs (66%). As for the former
measure, research findings reveal that most companies (66%) use
marketing's contribution to sales pipeline and company revenue to
determine the ROI of their marketing activities.
In the world of web analytics, these metrics translate into identifying how
each online customer activity is converted into an online or offline purchase.
While marketing's contribution to company revenue is an enterprise-level
metric measuring overall marketing effectiveness, sales lift from marketing
campaigns can be measured by identifying how each multi-channel marketing
campaign drives business in various forms, including in-store purchase,
online order and phone order.

The Best-in-Class PACE Model
Integrating web analytics as a strategic differentiator to achieve
organizational goals and mitigate the pressures mentioned above requires a
combination of strategic actions, business processes, and enabling
technologies summarized as shown in Table 3.

Table 3: The Best-in-Class PACE Framework
    Pressures              Actions                 Capabilities                          Enablers
 Pressure to         Improve the            Executive support for       Data management / cleansing
  increase the         targeting of            using customer analytics    Marketing content management
  returns from         marketing offers to     in marketing programs       Marketing automation
  marketing            optimize marketing     Test effectiveness of       Predictive analytics
  program spend        ROI                     campaign content
                      Gain insight into      Measure customer
                       effectiveness of        profitability
                       specific marketing     Customer behavior is
                       campaigns and           used to segment and
                       channels                target marketing
                                               audiences
                                              Disseminate knowledge
                                               on marketing campaigns
                                               to key decision makers
                                              Capture customer
                                               sentiment data
                                                                                  Source: Aberdeen Group, August 2011




© 2012 Aberdeen Group.                                                                      Telephone: 617 854 5200
www.aberdeen.com                                                                                  Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 4




Best-in-Class Strategies
The study results indicate that Best-in-Class companies focus on
customizing their marketing messages based on each website visitor persona
and identify which marketing efforts provide the greatest impact on driving
marketing effectiveness - Figure 1.
Using online customer data captured through web analytics tools is a key
enabler in helping organizations better personalize their marketing
campaigns in order to improve their marketing ROI. Aberdeen's September
2011 Customer Relevancy Drives Precision Marketing in the Mobile Channel study
demonstrates the value of this strategy; companies using customer data to
create customized marketing campaigns achieve 72% greater (6.4% vs. 3.7%)
year-over-year improvement in marketing's contribution to company
revenue, compared to those don't.

Figure 1: Best-in-Class Web Analytics Strategies

    40%                  38%              Best in Class
                                                       33%
    30%


    20%


    10%


     0%
             Improve the targeting of    Gain insight into effectiveness
            marketing offers to optimize     of specific marketing
                 marketing ROI             campaigns and channels
                         Percent of respondents, n=176
                                            Source: Aberdeen Group, August 2011
                                                                                  "Having timely and accurate
In addition to their focus on using customer information to customize their
                                                                                  insights into which marketing
multi-channel marketing activities and improve ROI, Best-in-Class marketers       campaigns were successful
are also keen on getting granular with the specific impact of each marketing      helps us to eventually optimize
channel and campaign. This helps those businesses integrate their web             our marketing programs based
analytics deployments with broader multi-channel and cross-channel                on prospect activity."
marketing efforts, and provides the ability to trace the results of each
                                                                                     ~ Chris Kuelbs, Lead Project
marketing campaign. Using this strategy in conjunction with personalization
                                                                                                Manager, Polaris
efforts allows the Best-in-Class to go beyond operational reporting of web
activities to strategic marketing activities that impact returns from their web
spend.




© 2012 Aberdeen Group.                                                               Telephone: 617 854 5200
www.aberdeen.com                                                                           Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 5




   Case Study - Mid-size Financial Education Services Company

 A leading financial education provider in North America broadcasts one
 of the largest independent radio shows, and providing a wide array of
 products and services to its customers. To align the online delivery of
 these products and services with its business strategy, the company
 launched a new web site and adopted a marketing automation solution
 to manage the site. “We changed our approach to marketing by
 automating it and making it a more data-driven function, with precise
 measures to assess marketing campaign results and utilizing web
 analytics is a key ingredient of this strategy,” says the company's Lead
 Web Analyst.
 One of the first steps the company took was to use a web analytics tool
 to track results (visitations and click-throughs) to understand the paths
 visitors take online. “The ability to understand how to effectively utilize
 our online real estate was an immediate benefit for us. It allowed us to
 improve the impact of our marketing assets, thus truly integrating the
 content on our new web site with our business.”
 Another key component of the company’s marketing automation
 strategy is disseminating marketing campaign results to relevant
 stakeholders. Today, 20 individuals from different roles, ranging from
 executive management to marketing staff, can view campaign results.
 While putting these capabilities in place, the company kept a keen eye
 on the costs of its campaigns to determine which were successful. “Our
 new solution enabled us to associate returns from each marketing
 campaign with its respective costs and as a result, we are able to
 determine marketing campaigns that would deliver the maximum return
 on investment (ROI) for us,” adds the Lead Web Analyst.
 Careful planning and implementation of a marketing automation strategy
 allowed the company to reap many fruits of its labors. The first year
 after implementing the new solution, it increased ROI 5-fold.
 Marketing’s contribution to online business has jumped to 50%. Time-
 to-market (time to create and deliver marketing assets or content to
 market) also improved significantly. “It used to take us weeks to create
 content and put on our website; today we do it virtually in real-time,”
 concludes the Lead Web Analyst at the company.




Key Capabilities
As illustrated in Table 4, Aberdeen has identified six key business processes
and four technology enablers required to successfully implement the core
web analytics strategies above, and achieve Best-in-Class results.




© 2012 Aberdeen Group.                                                          Telephone: 617 854 5200
www.aberdeen.com                                                                      Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 6




Table 4: The Competitive Framework
                   Best-in-Class             Average                 Laggards
                               Test effectiveness of campaign content
                         76%                     51%                    21%
   Process         Customer behavior is used to segment and target marketing
                                           audiences
                         65%                     56%                    41%
                   Executive support for using customer analytics in marketing
Organization                                programs
                         76%                     61%                    38%
                     Disseminate knowledge on marketing campaigns to key
                                       decision makers
 Knowledge               62%                     49%                    28%
                                 Capture customer sentiment data
                         57%                     41%                    14%
                  62% Data               56% Data             46% Data
                   management /            management /          management /
                   cleansing               cleansing             cleansing
                  57% Marketing          45% marketing        34% marketing
  Enabling         content                 content               content
Technologies       management              management            management
                  50% Marketing          41% marketing        24% marketing
                   automation              automation            automation
                  43% Predictive         33% Predictive       17% Predictive
                   analytics               analytics             analytics
                                    Measure customer profitability
Performance
                         67%                     48%                    36%
                                              Source: Aberdeen Group, August 2011


Capabilities and Enablers
Based on the findings of the Competitive Framework and interviews with
end user companies, Aberdeen’s analysis of the Best-in-Class demonstrates
that these top performers are dedicated to using a certain set of business
processes and technologies, which help them succeed at web analytics.

Process
    •   Measure effectiveness of each marketing campaign
        content. Maximizing marketing ROI requires that the business
        understand which marketing campaign(s) deliver the greatest results
        / returns, in order to help them identify and repeat successful
        campaigns, and avoid unsuccessful ones. Using web analytics tools to
        evaluate the effectiveness of campaign content is an essential step in
        this process, along with determining the proper timing and
        channel(s) of the campaign. Aberdeen's November 2010 Marketing
© 2012 Aberdeen Group.                                                              Telephone: 617 854 5200
www.aberdeen.com                                                                          Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 7




         Asset Management report notes; "…Best-in-Class companies are keenly
         aware of utilizing both fundamental and innovative performance
         management measures to advance their marketing materials and content
         in a manner that directly supports the business," highlighting the
         importance of measuring the effect of each content in multi-channel
         and cross-channel marketing campaigns on business results.
     •   Using customer behavioral data for segmentation and
         targeting. This process lets organizations use customer behavior
         data captured through the web analytics to craft different marketing
         strategies based on the unique needs and characteristics of various
         customer segments. Companies can use one or many criteria (e.g.
         age, location, historical spend) to segment their customer base. In
         addition to streamlining the management of typically exhaustive
         customer databases, this process also enhances companies' ability to
         contextualize marketing messages. For example, using prior
         customer spend history (which can typically be obtained through
         web analytics tools), a company can identify high-value / spend
         customers and create customized marketing messages for these
         VICs (Very Important Customers). Companies using this process
         achieve 82% greater incremental sales lift from marketing campaigns,
         compared to organizations that don't use customer behavioral data
         to segment and target their customers - Figure 2.

Figure 2: Performance Impact of Customer Segmentation
           Companies using customer behavioral data for segmentation
6%         and targeting
           All Others
                             4.8%
5%

4%                                                         82% greater
                                                2.6%
                                                           performance
3%

2%

1%

0%
         Average incremental sales lift resulting from a marketing campaign
                         Percent of respondents, n=176
                                             Source: Aberdeen Group, August 2011


Organization
Executive-level support for integrating customer analytics within
marketing programs. To target customers through the web in a
personalized fashion, companies must use web analytics to understand
customer personas in order to pair the right content with the right
message. Data shows that Best-in-Class companies are twice as likely as
Laggard businesses to have executive support for leveraging customer

© 2012 Aberdeen Group.                                                             Telephone: 617 854 5200
www.aberdeen.com                                                                         Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 8




analytics within marketing programs. Using customer analytics with web
analytics tools helps companies unlock insights otherwise hidden behind
online customer data. These insights can in turn be used to tune marketing
programs and enhance the contextualization of marketing campaigns.
Companies without executive-level support for customer analytics
experience 80% lower (0.5% vs. 2.7%) year-over-year performance gains in
marketing program contribution to company revenue compared to their
counterparts who lack executive-level support for their broader web
analytics initiatives.

Knowledge Management                                                                 "The focus of most marketing
    •   Share knowledge of marketing campaign results with key                            organizations has changed
                                                                                    dramatically; we are no longer
        decision-makers. Best-in-Class companies in this study are 49%
                                                                                  leading the marketplace, we are
        more likely than all others to provide executive-level insights to key    simply following the customers.
        decision-makers within the organization. Using web analytics tools         If companies can do a good job
        allows companies to track and measure the specific impact of each                        managing customer
        marketing program on online conversions and customer behavior                  information, then the results
        (e.g. sign-up for newsletters or download a coupon). Sharing these              will translate into improved
        insights is a crucial part of both marketing and organizational                    marketing effectiveness.”
        success. It provides company leadership with much needed                        ~Virginia Bonofiglio, Ex-
        information about the organization's strategic position within the              Marketing Manager of a
        marketplace, as well as data-driven insights required to manage the         Chemicals Company based in
        existing product / service portfolio and create new products that                               the U.S.
        meet customers' needs. Furthermore, as illustrated in Table 1, when
        marketers are under constant pressure to demonstrate ROI from
        their activities, this process lets them share the impact of their
        marketing campaigns on business results.
    •   Capture customer sentiment data. Using analytical tools and
        processes to capture website visitation data is different from
        capturing customer sentiment information. The former provides
        businesses with insight into the behavior patterns of website
        visitors, whereas the latter reveals what drives these behaviors.
        Customer sentiment data can be captured in many ways--for
        example, by monitoring likes, product / service ratings, online
        comments, forums and social media status updates. Combining
        online customer activity data with sentiment information through
        analytical tools lets companies take their web analytics to the next
        step - it opens the door to the hearts and minds of customers and
        helps businesses improve the results of their marketing initiatives.
        This process is an integral part of web analytics activities for 57% of
        Best-in-Class companies, compared to 30% of other companies.

Technology
When it comes to leveraging technology tools to support existing web
analytics deployments, Best-in-Class companies focus on four key
technologies (Figure 3);


© 2012 Aberdeen Group.                                                               Telephone: 617 854 5200
www.aberdeen.com                                                                           Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 9




Figure 3: Adoption of Technology Enablers
70%                                                    Best in Class          All Others
              62%
60%                                57%
                      52%                                  50%
50%
                                                                                  43%
                                           41%
40%                                                                34%
30%                                                                                        27%

20%

10%
                 Data            Marketing content     Marketing automation   Predictive analytics
          management/cleansing    management                  solution
                                      Percent of respondents, n=176

                                                   Source: Aberdeen Group, August 2011

      •     Data management/cleansing. Customer data is one of the most
            important tangible assets any organization owns. Managing and
            cleansing databases that store this information is paramount in
            helping companies use this data. Data management and cleansing
            tools support businesses by ensuring the accuracy of customer data
            obtained through web analytics. This information can be used to
            generate targeted marketing campaigns. There are various methods
            of integrating customer data with web operations; for example,
            companies can use reverse-IP technology to gather information on
            website visitors and customize their marketing messages.
            Companies using data management / cleansing tools are 39% less
            likely (19% vs. 31%) to struggle with interpreting customer data
            from web analytics.
      •     Marketing content management. This technology is associated
            with the second process capability in Table 3 - testing the
            effectiveness of marketing content. Marketing content management
            tools automatically update web marketing content based on
            customer information, typically gleaned through web analytics
            deployments. When a business lacks prior data on a website visitor,
            it uses information captured from other customers to personalize
            the visitors' web experience. For example, a client visiting a clothing
            company's website for the first time might click to see more coats.
            Based on this information, the company can use data from other
            visitors' sessions to make an offer to the first-time customer with
            trending coats or complementary products, such as gloves and
            scarves, that other visitors view or purchase when they click on
            coats. Businesses using marketing content management achieve 2.3-
            times greater (4.3% vs. 1.9%) year-over-year gains in cross-sell/up-
            sell revenue compared to those that don't.
      •     Marketing automation. One out of every two Best-in-Class
            companies currently uses this technology to support their web
            analytics activities. Marketing automation tools help businesses use
            online customer data within the scope of their broader multi-
© 2012 Aberdeen Group.                                                                               Telephone: 617 854 5200
www.aberdeen.com                                                                                           Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 10




        channel marketing campaigns. Customer information helps
        companies coordinate different touch-points for each account
        across multiple digital and off-line channels. In addition to providing
        timely and broad communication capabilities, this technology also
        enhances the consistency of multi-channel marketing messages. Data
        from Aberdeen's August 2011 Metric-Driven Mobile Marketing
        research shows that companies using marketing automation
        technology are 2.3-times (43% vs. 19%) more likely to indicate that
        they have established consistency within their marketing messages
        across all channels.
    •   Predictive analytics. These tools let organizations take advantage
        of online customer data captured through the company's website by
        using web analytics tools to predict what customers will want, as
        well as how, when and where they will want it. Despite being
        currently used by less than half of Best-in-Class, the deltas in
        adoption of this technology between Industry Average (43%) and
        Laggards (153%) are significant. This reflects the value of this
        technology in helping companies achieve the Best-in-Class results
        demonstrated in Table 1. The table below illustrates the planned
        adoption patterns of this technology among all web analytics users.

Table 5: Planned Adoption of Predictive Analytics Tools

                                                 All Web Analytics Users

   Plan to Implement by August 2012              34%


  Plan to Implement after August 2012            21%

                                             Source: Aberdeen Group, August 2011


Performance Management
    •   Measure customer profitability. Sixty-one percent (61%) of all
        organizations participating in Aberdeen's upcoming January 2012
        Customer Experience Management: Using the Power of Analytics to
        Optimize Customer Delight study indicated customer profitability as a
        key measure of the effectiveness of customer management activities.
        Improving this measure begins with understanding each customer or
        account's impact on the company's top-line and bottom-line results.
        Establishing visibility into customer profitability begins with back-end
        data systems that capture and store customer data, typically
        collected from myriad sources including web analytics tools.
        Organizations with a well-structured customer data system can drill
        down into information on historical customer spend, and correlate
        this information with the costs of acquiring and targeting each
        customer. With this net number, businesses have a quantified
        measure of the profitability of each customer and marketing

© 2012 Aberdeen Group.                                                             Telephone: 617 854 5200
www.aberdeen.com                                                                         Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 11




        channel, including the web. Research results from the Customer
        Experience Management study indicate that businesses conducting a
        cost / benefit analysis of each customer interaction improved their
        average profit margin per customer by 4.7% year-over-year,
        compared to a 1.2% decrease for businesses that are not
        performing such calculations.

Free or Paid Web Analytics?
This research document has noted the business impact of web analytics
tools and the differentiating business processes and technologies which
support them. However, which tools should businesses use? The web                      Fast Fact
analytics market is a mix of free, paid and mix (free and paid) tools. Figure 4
below and the sidebar illustrate the impact of each model.                             The breakdown of companies
                                                                                       indicating that they are
                                                                                       currently satisfied with the
Figure 4: Business Value of Free vs. Paid Web Analytics
                                                                                       quality of information delivered
         Free web analytics users                                                      through their web analytics
50%      Paid web analytics users                                                      deployments is as follows;
         Free and Paid web analytics users    41%
40%
                                                                                       √ Free web analytics users:
                                                                                         10%
                                                        30%
30%                              25%                                                   √ Paid web analytics users:
                                                                                         29%
20%
                                                                                       √ Free and paid web analytics
10%                                                                                      users: 32%

 0%
                We are not getting the full value from our web analytics solution
                                Percent of respondents, n=176
                                                 Source: Aberdeen Group, August 2011

Companies using free web analytics are more likely to struggle to interpret
data output from these systems, compared to peers using paid or mixed
(free and paid) web analytics deployments (Free: 31% vs. Paid: 27% vs.
                                                                                        “There are free analytics
Mixed: 24%). Interestingly enough, however, those businesses that deploy                solutions out there that are
only paid web analytics are 64% more likely to indicate they are not getting            good at providing click-through
the full value from these tools. On the other hand, paid web analytics users            data; however, if a company
are 2.9-times more satisfied than free web analytics users with the quality of          doesn’t associate that
information they receive from their web analytics tools - see sidebar. Let's            information with conversions
put the findings into context and observe the disconnect between why paid               on the site, it’s useless data.”
web analytics users are more satisfied with the quality of data, yet indicate           ~ Ex-SVP of Marketing at Large
that they are not receiving the full value from their solutions. Is it related to       North American Consumer
the sub-par performance of these companies? Or are organizations not fully              Services Company
leveraging the capabilities of their paid web analytics deployments? Figure 5
below demonstrates the year-over-year performance results of companies
using all three models of web analytics.



© 2012 Aberdeen Group.                                                                   Telephone: 617 854 5200
www.aberdeen.com                                                                               Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 12




Figure 5: Free vs. Paid - Year-over-Year Performance Comparison
                                       6%                                                             5.4%
Year-over-year percent change, n=176




                                                         4.7%
                                                             3.7%               3.6%
                                       4%                                                                  3.3%
                                                                                       2.0%
                                       2%

                                       0%

                                       -2%                                                                              Fast Fact
                                                 -2.1%                                                                  While findings demonstrated
                                                                        -2.5%
                                       -4%                                                                              in Figure 5 show that mixed
                                                                                                                        analytics users outperform
                                       -6%                                                     -5.0%                    free analytics users, close
                                             Marketing’s contribution Average incremental     Return on Marketing
                                                                                                                        analysis of the data reveals
                                               to closed business sales lift resulting from       Investment
                                                                      a marketing campaign                              that focusing on fully utilizing
                                                                                                                        the capabilities of paid
                                                             Free web analytics users                                   platforms helps businesses
                                                             Paid web analytics users                                   achieve further performance
                                                             Free and Paid web analytics users                          gains, compared to peers
                                                                                  Source: Aberdeen Group, August 2011   using a mix of free and paid
                                                                                                                        web analytics.
The figure above indicates that companies using only free web analytics
solutions experience a year-over-year decline in marketing campaign
performance. Companies that use paid web analytics tools, on the other
hand, achieve consistent improvements in year-over-year marketing results.
Paid web analytics users are not experiencing sub-par performance gains; on
the contrary, they reap the greatest benefits compared to businesses using
free or mixed web analytics. The main reason these companies feel they are
not getting the most from their investment is that they lack strategies and
business processes to track, capture and comprehend the impact of their
web analytics deployments. The following section presents practical
guidelines to mitigate this challenge.

Key Takeaways
Whether a company is trying to improve its performance in web analytics
activities from Laggard to Industry Average, Industry Average to Best-in-
Class or maintain Best-in-Class results, the following actions will help spur
the necessary performance improvements:

Laggard Steps to Success:
                                       •     Determine key metrics. Sixty-six percent (66%) of Laggard
                                             businesses still don't have defined measures to evaluate the
                                             effectiveness of their marketing campaign performance. Establishing
                                             a process and metrics for measuring online marketing results with
                                             web analytics is a critical step toward creating a data-driven view of
                                             marketing results. This should be complemented with frequent

© 2012 Aberdeen Group.                                                                                                   Telephone: 617 854 5200
www.aberdeen.com                                                                                                               Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 13




        reports to the key stakeholders within the organization, to build a     Demographics
        clear picture of how marketing contributes to the health and
        success of the organization.                                            Of the 176 responding
                                                                                organizations, demographics
    •   Test the effectiveness of each marketing campaign. Despite              include the following:
        the plethora of techniques and tools available to test marketing
        campaign results, only 21% of Laggard organizations are testing their   √ Job title: Senior Management
                                                                                  (34%); EVP / SVP / VP (19%);
        campaign effectiveness. Using web analytics to conduct such tests
                                                                                  Director (21%); Manager
        helps businesses set expectations on how upcoming marketing               (13%); Other (13%)
        campaigns might perform, and use this information to fine-tune their
        activities to achieve desired results. Companies testing the            √ Department / function: Sales
        effectiveness of each marketing campaign achieve 3.8-times greater        and Marketing (54%); IT
        (3.2% vs. 0.9%) year over-year improvement in return on their             (9%); Business Management
                                                                                  (16%); Operations (6%);
        marketing investments compared to companies that don't.
                                                                                  Other (15%)

Industry Average Steps to Success:                                              √ Segment: IT consulting /
                                                                                  services (22%); Software
    •   Improve the relevancy of your web content. The increasing                 (17%); Telecommunications
        adoption of social media portals and mobile devices lets customers        equipment & services (7%);
        easily access almost any information, anytime and anywhere. To            Financial services (6%); Retail
        attract customers' attention in this environment, businesses must         (13%); Other (35%)
        deliver the most relevant marketing messages through the most
                                                                                √ Geography: Americas (73%);
        relevant channel(s) at the opportune time(s). This is best                APAC region (10%) and
        accomplished by customizing web content based on customer                 EMEA (17%)
        behavioral data captured through web analytics tools.
        Approximately half (49%) of Industry Average companies currently        √ Company size: Large
        implement this process; there is ample opportunity for all Industry       enterprises (annual revenues
        Average companies to adopt and constantly improve this process.           above US $1 billion)- 26%;
                                                                                  midsize enterprises (annual
    •   Ensure the quality of your customer database. The ability to              revenues between $50
        personalize marketing messages hinges on an organization's ability        million and $1 billion)- 27%;
        to use customer data gleaned from their web analytics deployments.        and small businesses (annual
        Aberdeen's upcoming January 2012 Customer Experience Management           revenues of $50 million or
        study shows that businesses that adopt technology tools to ensure         less)- 47%
        the quality of customer information within their customer database
        achieve approximately two times the year-over-year improvement
        in their annual company revenue compared to organizations that
        are not using these tools.

Best-in-Class Steps to Success:
    •   Use predictive capabilities. Less than half (43%) the Best-in-
        Class use predictive analytics tools and processes to forecast
        customers' future behavioral patterns based on historical and
        existing data. While web analytics tools provide a lens to focus on
        the past and recent information, adding predictive capabilities into
        the mix will strengthen forecasts about how customers will respond
        to upcoming marketing campaigns, resulting in greater success.
    •   Go beyond collecting customer data; conduct sentiment
        analysis. Customer sentiment data is a powerful tool that allows

© 2012 Aberdeen Group.                                                               Telephone: 617 854 5200
www.aberdeen.com                                                                           Fax: 617 723 7897
Web Analytics: Marketing Beyond Online Customer Data
Page 14




            businesses to understand what drives their customers' behavior.
            Businesses often note that what the customer says they want is not
            the same as what they actually want. Capturing customer sentiment
            information can solve or mitigate this challenge. Best-in-Class can
            take customization to the next step by combining it with web
            analytics to identify the drivers motivating their customers: their
            thought processes and even their feelings. Data validates this
            strategy; companies capturing customer sentiment data are 36%
            more likely (34% vs. 25%) to improve the contribution of marketing
            programs on top-line revenue results year-over-year.


For more information on this or other research topics, please visit
www.aberdeen.com

                                             Related Research
 Customer Experience Management:                             Results Speak Louder than Words: Using
 Using the Power of Analytics to Optimize                    Marketing to Improve Sales Effectiveness;
 Customer Delight; January 2012                              December 2010
 Metric-Driven Mobile Marketing:                             Web Analytics: Actionable Insights for
 Increase Marketing's Revenue                                Unlocking the Hidden Potential of Online
 Contribution; August 2011                                   Data; April 2009
 Social Media Connecting B2C Companies                       Web Analytics: The Crystal Ball of
 with Generation Y and Z Consumers;                          Customer Behavior; April 2007
 March 2011
 Author: Omer Minkara, Senior Research Associate, Customer Management
 Technology Group (omer.minkara@aberdeen.com)
For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class.
Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide
organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why
our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of
the Technology 500.
As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of
local, regional, national and international marketing executives. Combined, we help our customers leverage the power
of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional
information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call
(800) 456-9748 or go to http://www.harte-hanks.com.
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies
provide for objective fact-based research and represent the best analysis available at the time of publication. Unless
otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be
reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by
Aberdeen Group, Inc. (2011a)




© 2012 Aberdeen Group.                                                                                                   Telephone: 617 854 5200
www.aberdeen.com                                                                                                               Fax: 617 723 7897

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Web Analytics: Marketing Beyond Online Customer Data

  • 1. January 2012 Web Analytics: Marketing Beyond Online Customer Data Analyst Insight As the volume of customer-related data (transactional, behavioral and Aberdeen’s Insights provide the unstructured) continues to grow, marketing organizations are in danger of analyst perspective of the becoming increasingly data-rich, but insight-poor. In July and August 2011, research as drawn from an Aberdeen surveyed 176 organizations regarding their use of analytical tools aggregated view of the research and processes in marketing campaigns and programs, with 93 of the surveys, interviews, and responding businesses indicating that they are actively using web analytics to data analysis support their marketing activities. This Analyst Insight will identify how Best- in-Class companies among those 93 respondents track, measure and use online customer data to improve their performance in key indicators of marketing program success. These metrics include marketing's contribution to company revenue, and the incremental sales lift resulting from marketing Aberdeen’s PACE Methodology campaigns and programs. The analysis review key factors that help Aberdeen applies a methodology businesses move beyond simply collecting customer data through their to benchmark research that websites, to using this information as a strategic lever to help marketing evaluates the business Pressures, become a truly data-driven function that has quantifiable impact on company Actions, Capabilities, and results. Enablers (PACE) that indicate corporate behavior in specific business processes: Business Context √ Pressures — external forces The rising and falling tides of economic instability over the past three years that impact an organization’s have left many organizations engaged in fierce competition to survive and market position, thrive. Aberdeen's Q2 2011 Quarterly Business Review study shows that the competitiveness, or business top challenges organizations face in meeting their business goals are operations. economic conditions (39%) and increased competition (36%). These harsh realities put marketing at the forefront of the organization's drive to make √ Actions — the strategic the business stand out from its competitors, and to maintain and improve its approaches that an organization takes in response financial health. to industry pressures. Table 1: Top Pressures Driving Marketing Agendas √ Capabilities — the business process competencies All Analytics Users (process, organization, performance and knowledge Pressure to increase the returns from management) required to  52% marketing spend execute corporate strategy. Organizational pressure to deliver higher √ Enablers — the key  51% quality sales leads functionality of technology solutions required to support Faster response time to customer activities the organization’s enabling  30% required for business impact business practices. Source: Aberdeen Group, August 2011 This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.
  • 2. Web Analytics: Marketing Beyond Online Customer Data Page 2 Aberdeen's October 2011 study, The Marketing Executive's Agenda for 2012, reflects these rising organizational expectations from marketing. Fifty-one percent (51%) of all companies surveyed indicated they are holding marketing accountable for demonstrating quantifiable returns on investment. Data from Aberdeen's current study shows that 52% of the companies using analytical tools (e.g. web analytics) to support their marketing programs are struggling with organizational pressure to demonstrate quantifiable ROI from their marketing spend, as shown in Table 1. Marketers need to use online customer data for more than just managing website content--they must leverage web analytics tools strategically, to improve targeting and personalization and provide the right messaging / offer(s) at the right time to each customer, leading to increased returns. What better way is there to demonstrate the value of marketing besides correlating marketing programs with selling results? Unsurprisingly, one out of two companies using analytical tools to support marketing activities indicated that they expect their marketing departments to deliver higher- quality leads to support sales reps - see Table 1 above. Marketers are challenged with using web analytics tools to convert information captured through the website into high-quality leads for their sales teams. Aberdeen's December 2011 Sales and Marketing Alignment: The New Power Couple study affirms this finding; the second top organizational goal after increasing top- line revenue is improving the quality of leads marketing sends to sales. Defining Metrics Best-in-Class Results The performance criteria in Table 2 are defined as follows; Aberdeen used two performance criteria to study how web analytics help Best-in-Class businesses differentiate themselves from Industry Average and √ Marketing's contribution Laggards; to company revenue: The percentage of company revenue that is attributable Table 2: Top Performers Earn Best-in-Class Status to multi-channel marketing Definition of Mean Class Performance campaigns and programs. It is typically measured by Maturity Class determining the percentage  65% of all closed business coming from marketing of closed business that was Best-in-Class: campaigns and programs generated or influenced Top 20%  7.1% average year-over-year improvement in (nurtured, touched) by of aggregate marketing campaigns before incremental sales lift resulting from marketing performance scorers resulting in a sale. campaigns  11% of all closed business coming from marketing √ Incremental sales lift Industry Average: campaigns and programs from marketing Middle 50%  1.7% average year-over-year improvement in programs: Year-over-year of aggregate incremental sales lift resulting from marketing performance measure performance scorers campaigns demonstrating the impact of marketing activities on Laggard:  2% of all closed business coming from marketing improving organization's Bottom 30% campaigns and programs selling results. of aggregate  1.9% average year-over-year decline in incremental performance scorers sales lift resulting from marketing campaigns Source: Aberdeen Group, August 2011 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 3. Web Analytics: Marketing Beyond Online Customer Data Page 3 Why These Metrics? Aberdeen asked the survey respondents to rate the value of specific performance metrics to measuring the effectiveness of analytical tools, in this case web analytics, in improving marketing results. The top two measures identified were Return on Marketing Investments (72%) and incremental sales lift from marketing programs (66%). As for the former measure, research findings reveal that most companies (66%) use marketing's contribution to sales pipeline and company revenue to determine the ROI of their marketing activities. In the world of web analytics, these metrics translate into identifying how each online customer activity is converted into an online or offline purchase. While marketing's contribution to company revenue is an enterprise-level metric measuring overall marketing effectiveness, sales lift from marketing campaigns can be measured by identifying how each multi-channel marketing campaign drives business in various forms, including in-store purchase, online order and phone order. The Best-in-Class PACE Model Integrating web analytics as a strategic differentiator to achieve organizational goals and mitigate the pressures mentioned above requires a combination of strategic actions, business processes, and enabling technologies summarized as shown in Table 3. Table 3: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers  Pressure to  Improve the  Executive support for  Data management / cleansing increase the targeting of using customer analytics  Marketing content management returns from marketing offers to in marketing programs  Marketing automation marketing optimize marketing  Test effectiveness of  Predictive analytics program spend ROI campaign content  Gain insight into  Measure customer effectiveness of profitability specific marketing  Customer behavior is campaigns and used to segment and channels target marketing audiences  Disseminate knowledge on marketing campaigns to key decision makers  Capture customer sentiment data Source: Aberdeen Group, August 2011 © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 4. Web Analytics: Marketing Beyond Online Customer Data Page 4 Best-in-Class Strategies The study results indicate that Best-in-Class companies focus on customizing their marketing messages based on each website visitor persona and identify which marketing efforts provide the greatest impact on driving marketing effectiveness - Figure 1. Using online customer data captured through web analytics tools is a key enabler in helping organizations better personalize their marketing campaigns in order to improve their marketing ROI. Aberdeen's September 2011 Customer Relevancy Drives Precision Marketing in the Mobile Channel study demonstrates the value of this strategy; companies using customer data to create customized marketing campaigns achieve 72% greater (6.4% vs. 3.7%) year-over-year improvement in marketing's contribution to company revenue, compared to those don't. Figure 1: Best-in-Class Web Analytics Strategies 40% 38% Best in Class 33% 30% 20% 10% 0% Improve the targeting of Gain insight into effectiveness marketing offers to optimize of specific marketing marketing ROI campaigns and channels Percent of respondents, n=176 Source: Aberdeen Group, August 2011 "Having timely and accurate In addition to their focus on using customer information to customize their insights into which marketing multi-channel marketing activities and improve ROI, Best-in-Class marketers campaigns were successful are also keen on getting granular with the specific impact of each marketing helps us to eventually optimize channel and campaign. This helps those businesses integrate their web our marketing programs based analytics deployments with broader multi-channel and cross-channel on prospect activity." marketing efforts, and provides the ability to trace the results of each ~ Chris Kuelbs, Lead Project marketing campaign. Using this strategy in conjunction with personalization Manager, Polaris efforts allows the Best-in-Class to go beyond operational reporting of web activities to strategic marketing activities that impact returns from their web spend. © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 5. Web Analytics: Marketing Beyond Online Customer Data Page 5 Case Study - Mid-size Financial Education Services Company A leading financial education provider in North America broadcasts one of the largest independent radio shows, and providing a wide array of products and services to its customers. To align the online delivery of these products and services with its business strategy, the company launched a new web site and adopted a marketing automation solution to manage the site. “We changed our approach to marketing by automating it and making it a more data-driven function, with precise measures to assess marketing campaign results and utilizing web analytics is a key ingredient of this strategy,” says the company's Lead Web Analyst. One of the first steps the company took was to use a web analytics tool to track results (visitations and click-throughs) to understand the paths visitors take online. “The ability to understand how to effectively utilize our online real estate was an immediate benefit for us. It allowed us to improve the impact of our marketing assets, thus truly integrating the content on our new web site with our business.” Another key component of the company’s marketing automation strategy is disseminating marketing campaign results to relevant stakeholders. Today, 20 individuals from different roles, ranging from executive management to marketing staff, can view campaign results. While putting these capabilities in place, the company kept a keen eye on the costs of its campaigns to determine which were successful. “Our new solution enabled us to associate returns from each marketing campaign with its respective costs and as a result, we are able to determine marketing campaigns that would deliver the maximum return on investment (ROI) for us,” adds the Lead Web Analyst. Careful planning and implementation of a marketing automation strategy allowed the company to reap many fruits of its labors. The first year after implementing the new solution, it increased ROI 5-fold. Marketing’s contribution to online business has jumped to 50%. Time- to-market (time to create and deliver marketing assets or content to market) also improved significantly. “It used to take us weeks to create content and put on our website; today we do it virtually in real-time,” concludes the Lead Web Analyst at the company. Key Capabilities As illustrated in Table 4, Aberdeen has identified six key business processes and four technology enablers required to successfully implement the core web analytics strategies above, and achieve Best-in-Class results. © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 6. Web Analytics: Marketing Beyond Online Customer Data Page 6 Table 4: The Competitive Framework Best-in-Class Average Laggards Test effectiveness of campaign content 76% 51% 21% Process Customer behavior is used to segment and target marketing audiences 65% 56% 41% Executive support for using customer analytics in marketing Organization programs 76% 61% 38% Disseminate knowledge on marketing campaigns to key decision makers Knowledge 62% 49% 28% Capture customer sentiment data 57% 41% 14%  62% Data  56% Data  46% Data management / management / management / cleansing cleansing cleansing  57% Marketing  45% marketing  34% marketing Enabling content content content Technologies management management management  50% Marketing  41% marketing  24% marketing automation automation automation  43% Predictive  33% Predictive  17% Predictive analytics analytics analytics Measure customer profitability Performance 67% 48% 36% Source: Aberdeen Group, August 2011 Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end user companies, Aberdeen’s analysis of the Best-in-Class demonstrates that these top performers are dedicated to using a certain set of business processes and technologies, which help them succeed at web analytics. Process • Measure effectiveness of each marketing campaign content. Maximizing marketing ROI requires that the business understand which marketing campaign(s) deliver the greatest results / returns, in order to help them identify and repeat successful campaigns, and avoid unsuccessful ones. Using web analytics tools to evaluate the effectiveness of campaign content is an essential step in this process, along with determining the proper timing and channel(s) of the campaign. Aberdeen's November 2010 Marketing © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 7. Web Analytics: Marketing Beyond Online Customer Data Page 7 Asset Management report notes; "…Best-in-Class companies are keenly aware of utilizing both fundamental and innovative performance management measures to advance their marketing materials and content in a manner that directly supports the business," highlighting the importance of measuring the effect of each content in multi-channel and cross-channel marketing campaigns on business results. • Using customer behavioral data for segmentation and targeting. This process lets organizations use customer behavior data captured through the web analytics to craft different marketing strategies based on the unique needs and characteristics of various customer segments. Companies can use one or many criteria (e.g. age, location, historical spend) to segment their customer base. In addition to streamlining the management of typically exhaustive customer databases, this process also enhances companies' ability to contextualize marketing messages. For example, using prior customer spend history (which can typically be obtained through web analytics tools), a company can identify high-value / spend customers and create customized marketing messages for these VICs (Very Important Customers). Companies using this process achieve 82% greater incremental sales lift from marketing campaigns, compared to organizations that don't use customer behavioral data to segment and target their customers - Figure 2. Figure 2: Performance Impact of Customer Segmentation Companies using customer behavioral data for segmentation 6% and targeting All Others 4.8% 5% 4% 82% greater 2.6% performance 3% 2% 1% 0% Average incremental sales lift resulting from a marketing campaign Percent of respondents, n=176 Source: Aberdeen Group, August 2011 Organization Executive-level support for integrating customer analytics within marketing programs. To target customers through the web in a personalized fashion, companies must use web analytics to understand customer personas in order to pair the right content with the right message. Data shows that Best-in-Class companies are twice as likely as Laggard businesses to have executive support for leveraging customer © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 8. Web Analytics: Marketing Beyond Online Customer Data Page 8 analytics within marketing programs. Using customer analytics with web analytics tools helps companies unlock insights otherwise hidden behind online customer data. These insights can in turn be used to tune marketing programs and enhance the contextualization of marketing campaigns. Companies without executive-level support for customer analytics experience 80% lower (0.5% vs. 2.7%) year-over-year performance gains in marketing program contribution to company revenue compared to their counterparts who lack executive-level support for their broader web analytics initiatives. Knowledge Management "The focus of most marketing • Share knowledge of marketing campaign results with key organizations has changed dramatically; we are no longer decision-makers. Best-in-Class companies in this study are 49% leading the marketplace, we are more likely than all others to provide executive-level insights to key simply following the customers. decision-makers within the organization. Using web analytics tools If companies can do a good job allows companies to track and measure the specific impact of each managing customer marketing program on online conversions and customer behavior information, then the results (e.g. sign-up for newsletters or download a coupon). Sharing these will translate into improved insights is a crucial part of both marketing and organizational marketing effectiveness.” success. It provides company leadership with much needed ~Virginia Bonofiglio, Ex- information about the organization's strategic position within the Marketing Manager of a marketplace, as well as data-driven insights required to manage the Chemicals Company based in existing product / service portfolio and create new products that the U.S. meet customers' needs. Furthermore, as illustrated in Table 1, when marketers are under constant pressure to demonstrate ROI from their activities, this process lets them share the impact of their marketing campaigns on business results. • Capture customer sentiment data. Using analytical tools and processes to capture website visitation data is different from capturing customer sentiment information. The former provides businesses with insight into the behavior patterns of website visitors, whereas the latter reveals what drives these behaviors. Customer sentiment data can be captured in many ways--for example, by monitoring likes, product / service ratings, online comments, forums and social media status updates. Combining online customer activity data with sentiment information through analytical tools lets companies take their web analytics to the next step - it opens the door to the hearts and minds of customers and helps businesses improve the results of their marketing initiatives. This process is an integral part of web analytics activities for 57% of Best-in-Class companies, compared to 30% of other companies. Technology When it comes to leveraging technology tools to support existing web analytics deployments, Best-in-Class companies focus on four key technologies (Figure 3); © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 9. Web Analytics: Marketing Beyond Online Customer Data Page 9 Figure 3: Adoption of Technology Enablers 70% Best in Class All Others 62% 60% 57% 52% 50% 50% 43% 41% 40% 34% 30% 27% 20% 10% Data Marketing content Marketing automation Predictive analytics management/cleansing management solution Percent of respondents, n=176 Source: Aberdeen Group, August 2011 • Data management/cleansing. Customer data is one of the most important tangible assets any organization owns. Managing and cleansing databases that store this information is paramount in helping companies use this data. Data management and cleansing tools support businesses by ensuring the accuracy of customer data obtained through web analytics. This information can be used to generate targeted marketing campaigns. There are various methods of integrating customer data with web operations; for example, companies can use reverse-IP technology to gather information on website visitors and customize their marketing messages. Companies using data management / cleansing tools are 39% less likely (19% vs. 31%) to struggle with interpreting customer data from web analytics. • Marketing content management. This technology is associated with the second process capability in Table 3 - testing the effectiveness of marketing content. Marketing content management tools automatically update web marketing content based on customer information, typically gleaned through web analytics deployments. When a business lacks prior data on a website visitor, it uses information captured from other customers to personalize the visitors' web experience. For example, a client visiting a clothing company's website for the first time might click to see more coats. Based on this information, the company can use data from other visitors' sessions to make an offer to the first-time customer with trending coats or complementary products, such as gloves and scarves, that other visitors view or purchase when they click on coats. Businesses using marketing content management achieve 2.3- times greater (4.3% vs. 1.9%) year-over-year gains in cross-sell/up- sell revenue compared to those that don't. • Marketing automation. One out of every two Best-in-Class companies currently uses this technology to support their web analytics activities. Marketing automation tools help businesses use online customer data within the scope of their broader multi- © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 10. Web Analytics: Marketing Beyond Online Customer Data Page 10 channel marketing campaigns. Customer information helps companies coordinate different touch-points for each account across multiple digital and off-line channels. In addition to providing timely and broad communication capabilities, this technology also enhances the consistency of multi-channel marketing messages. Data from Aberdeen's August 2011 Metric-Driven Mobile Marketing research shows that companies using marketing automation technology are 2.3-times (43% vs. 19%) more likely to indicate that they have established consistency within their marketing messages across all channels. • Predictive analytics. These tools let organizations take advantage of online customer data captured through the company's website by using web analytics tools to predict what customers will want, as well as how, when and where they will want it. Despite being currently used by less than half of Best-in-Class, the deltas in adoption of this technology between Industry Average (43%) and Laggards (153%) are significant. This reflects the value of this technology in helping companies achieve the Best-in-Class results demonstrated in Table 1. The table below illustrates the planned adoption patterns of this technology among all web analytics users. Table 5: Planned Adoption of Predictive Analytics Tools All Web Analytics Users Plan to Implement by August 2012  34% Plan to Implement after August 2012  21% Source: Aberdeen Group, August 2011 Performance Management • Measure customer profitability. Sixty-one percent (61%) of all organizations participating in Aberdeen's upcoming January 2012 Customer Experience Management: Using the Power of Analytics to Optimize Customer Delight study indicated customer profitability as a key measure of the effectiveness of customer management activities. Improving this measure begins with understanding each customer or account's impact on the company's top-line and bottom-line results. Establishing visibility into customer profitability begins with back-end data systems that capture and store customer data, typically collected from myriad sources including web analytics tools. Organizations with a well-structured customer data system can drill down into information on historical customer spend, and correlate this information with the costs of acquiring and targeting each customer. With this net number, businesses have a quantified measure of the profitability of each customer and marketing © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 11. Web Analytics: Marketing Beyond Online Customer Data Page 11 channel, including the web. Research results from the Customer Experience Management study indicate that businesses conducting a cost / benefit analysis of each customer interaction improved their average profit margin per customer by 4.7% year-over-year, compared to a 1.2% decrease for businesses that are not performing such calculations. Free or Paid Web Analytics? This research document has noted the business impact of web analytics tools and the differentiating business processes and technologies which support them. However, which tools should businesses use? The web Fast Fact analytics market is a mix of free, paid and mix (free and paid) tools. Figure 4 below and the sidebar illustrate the impact of each model. The breakdown of companies indicating that they are currently satisfied with the Figure 4: Business Value of Free vs. Paid Web Analytics quality of information delivered Free web analytics users through their web analytics 50% Paid web analytics users deployments is as follows; Free and Paid web analytics users 41% 40% √ Free web analytics users: 10% 30% 30% 25% √ Paid web analytics users: 29% 20% √ Free and paid web analytics 10% users: 32% 0% We are not getting the full value from our web analytics solution Percent of respondents, n=176 Source: Aberdeen Group, August 2011 Companies using free web analytics are more likely to struggle to interpret data output from these systems, compared to peers using paid or mixed (free and paid) web analytics deployments (Free: 31% vs. Paid: 27% vs. “There are free analytics Mixed: 24%). Interestingly enough, however, those businesses that deploy solutions out there that are only paid web analytics are 64% more likely to indicate they are not getting good at providing click-through the full value from these tools. On the other hand, paid web analytics users data; however, if a company are 2.9-times more satisfied than free web analytics users with the quality of doesn’t associate that information they receive from their web analytics tools - see sidebar. Let's information with conversions put the findings into context and observe the disconnect between why paid on the site, it’s useless data.” web analytics users are more satisfied with the quality of data, yet indicate ~ Ex-SVP of Marketing at Large that they are not receiving the full value from their solutions. Is it related to North American Consumer the sub-par performance of these companies? Or are organizations not fully Services Company leveraging the capabilities of their paid web analytics deployments? Figure 5 below demonstrates the year-over-year performance results of companies using all three models of web analytics. © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 12. Web Analytics: Marketing Beyond Online Customer Data Page 12 Figure 5: Free vs. Paid - Year-over-Year Performance Comparison 6% 5.4% Year-over-year percent change, n=176 4.7% 3.7% 3.6% 4% 3.3% 2.0% 2% 0% -2% Fast Fact -2.1% While findings demonstrated -2.5% -4% in Figure 5 show that mixed analytics users outperform -6% -5.0% free analytics users, close Marketing’s contribution Average incremental Return on Marketing analysis of the data reveals to closed business sales lift resulting from Investment a marketing campaign that focusing on fully utilizing the capabilities of paid Free web analytics users platforms helps businesses Paid web analytics users achieve further performance Free and Paid web analytics users gains, compared to peers Source: Aberdeen Group, August 2011 using a mix of free and paid web analytics. The figure above indicates that companies using only free web analytics solutions experience a year-over-year decline in marketing campaign performance. Companies that use paid web analytics tools, on the other hand, achieve consistent improvements in year-over-year marketing results. Paid web analytics users are not experiencing sub-par performance gains; on the contrary, they reap the greatest benefits compared to businesses using free or mixed web analytics. The main reason these companies feel they are not getting the most from their investment is that they lack strategies and business processes to track, capture and comprehend the impact of their web analytics deployments. The following section presents practical guidelines to mitigate this challenge. Key Takeaways Whether a company is trying to improve its performance in web analytics activities from Laggard to Industry Average, Industry Average to Best-in- Class or maintain Best-in-Class results, the following actions will help spur the necessary performance improvements: Laggard Steps to Success: • Determine key metrics. Sixty-six percent (66%) of Laggard businesses still don't have defined measures to evaluate the effectiveness of their marketing campaign performance. Establishing a process and metrics for measuring online marketing results with web analytics is a critical step toward creating a data-driven view of marketing results. This should be complemented with frequent © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 13. Web Analytics: Marketing Beyond Online Customer Data Page 13 reports to the key stakeholders within the organization, to build a Demographics clear picture of how marketing contributes to the health and success of the organization. Of the 176 responding organizations, demographics • Test the effectiveness of each marketing campaign. Despite include the following: the plethora of techniques and tools available to test marketing campaign results, only 21% of Laggard organizations are testing their √ Job title: Senior Management (34%); EVP / SVP / VP (19%); campaign effectiveness. Using web analytics to conduct such tests Director (21%); Manager helps businesses set expectations on how upcoming marketing (13%); Other (13%) campaigns might perform, and use this information to fine-tune their activities to achieve desired results. Companies testing the √ Department / function: Sales effectiveness of each marketing campaign achieve 3.8-times greater and Marketing (54%); IT (3.2% vs. 0.9%) year over-year improvement in return on their (9%); Business Management (16%); Operations (6%); marketing investments compared to companies that don't. Other (15%) Industry Average Steps to Success: √ Segment: IT consulting / services (22%); Software • Improve the relevancy of your web content. The increasing (17%); Telecommunications adoption of social media portals and mobile devices lets customers equipment & services (7%); easily access almost any information, anytime and anywhere. To Financial services (6%); Retail attract customers' attention in this environment, businesses must (13%); Other (35%) deliver the most relevant marketing messages through the most √ Geography: Americas (73%); relevant channel(s) at the opportune time(s). This is best APAC region (10%) and accomplished by customizing web content based on customer EMEA (17%) behavioral data captured through web analytics tools. Approximately half (49%) of Industry Average companies currently √ Company size: Large implement this process; there is ample opportunity for all Industry enterprises (annual revenues Average companies to adopt and constantly improve this process. above US $1 billion)- 26%; midsize enterprises (annual • Ensure the quality of your customer database. The ability to revenues between $50 personalize marketing messages hinges on an organization's ability million and $1 billion)- 27%; to use customer data gleaned from their web analytics deployments. and small businesses (annual Aberdeen's upcoming January 2012 Customer Experience Management revenues of $50 million or study shows that businesses that adopt technology tools to ensure less)- 47% the quality of customer information within their customer database achieve approximately two times the year-over-year improvement in their annual company revenue compared to organizations that are not using these tools. Best-in-Class Steps to Success: • Use predictive capabilities. Less than half (43%) the Best-in- Class use predictive analytics tools and processes to forecast customers' future behavioral patterns based on historical and existing data. While web analytics tools provide a lens to focus on the past and recent information, adding predictive capabilities into the mix will strengthen forecasts about how customers will respond to upcoming marketing campaigns, resulting in greater success. • Go beyond collecting customer data; conduct sentiment analysis. Customer sentiment data is a powerful tool that allows © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897
  • 14. Web Analytics: Marketing Beyond Online Customer Data Page 14 businesses to understand what drives their customers' behavior. Businesses often note that what the customer says they want is not the same as what they actually want. Capturing customer sentiment information can solve or mitigate this challenge. Best-in-Class can take customization to the next step by combining it with web analytics to identify the drivers motivating their customers: their thought processes and even their feelings. Data validates this strategy; companies capturing customer sentiment data are 36% more likely (34% vs. 25%) to improve the contribution of marketing programs on top-line revenue results year-over-year. For more information on this or other research topics, please visit www.aberdeen.com Related Research Customer Experience Management: Results Speak Louder than Words: Using Using the Power of Analytics to Optimize Marketing to Improve Sales Effectiveness; Customer Delight; January 2012 December 2010 Metric-Driven Mobile Marketing: Web Analytics: Actionable Insights for Increase Marketing's Revenue Unlocking the Hidden Potential of Online Contribution; August 2011 Data; April 2009 Social Media Connecting B2C Companies Web Analytics: The Crystal Ball of with Generation Y and Z Consumers; Customer Behavior; April 2007 March 2011 Author: Omer Minkara, Senior Research Associate, Customer Management Technology Group (omer.minkara@aberdeen.com) For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2011a) © 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897