Is web analytics really giving your online business the right information? In many cases, the answer is NO! Too many marketers focus too much on past performance in making decisions about the future, without considering the context of that data.

Having consulted in business intelligence for years, [web analytics is just one sector of business intelligence], I can assure you that historical performance is only one part of the picture. The unique aspect of online business is that it moves fast - and often, in many directions at once. The performance of past instances does not necessarily dictate what will happen in the future.

Past data is very valuable - when it is viewed in context of the environment in which it was achieved. Valuable business inteliigence can be gained by capturing the environment during with a PPC campaign is run. Isolate key market forces, and develop a scoring method to weight the impact of these various forces. Then after the campaign, capture the performance and calculate the return on investment. This complete set of data then becomes a 'scenario'.

In future campaigns, compare the current forces, and the relative strength of these forces with past like 'scenarios'. This gives you a more aligned comparative upon which to 'forecast' future performance.

I bet you don't focus on the rear view mirror when driving your car forward, so don't get trapped into doing the same thing with your business. Web analytics is becoming such a comprehensive program, that it is easy to get encapsulated with too much mind numbing data. Since web analytics programs and campaign tracking and management systems all focus on past performance, this trap is very easy to fall into.

Instead, keep you campaigns focused directly ahead, on future marketing objectives.

Look at what is happening around you NOW!. - What other bidders are there in the PPC environment - these bidders have a significant impact on how your campaign performed in the past, and will also impact future campaigns.
Set up testing environments - to measure the effectiveness of different approaches. The mindset of the market is complicated, and it is very difficult to ascertain what the rights words and sentiments are at any time, without online testing of keywords, page elements etc
Define Your Bid Strategy - align your bids with your marketing objectives:
1. Higher bids generally lead to more exposure, more clicks and more sales opportunities.
2. Lower bids, using more targeted keyword phrases and matching leads to less traffic, but more targeted traffic, with a higher conversion rate. Only testing will ultimately tell you which tactic leads to the highest ROI.
Set up Goals - determine in advance the increase in traffic or conversion rate you require to meet your marketing objective. Using elasticity testing, you can determine how much traffic, the conversion rate or increase in CPC is required to achieve your purpose
Segment your Campaign - narrow your campaign to geograhic regions or certain times of day.
Track Constantly - and change small elements at a time, testing each change

There are many tactics you can use to achieve your end goals - by testing small and continually improving your campaign structure, you not only have more chance of achieving your goal, but you capture valuable scenario data to add context to campaign performance.

January 6 2008

Author: Gail La Grouw - Gail is a corporate performance consultant for Coded-Vision Consulting. She specializes in using business intelligence to drive performance in your business by linking strategy directly to measurable actions.