Metrics for Measuring Internet Marketing ROI

Metrics for MeasuringInternet Marketing ROI

Pete KeverPrincipal & Co-FounderGHI Internet Services

Agenda

1. GHI Corporate Overview (3 minutes)

2. What Is Internet Marketing? (5 minutes)

3. Why Internet Marketing Matters (5 minutes)

4. Creating an ROI Plan (2 minutes)

5. ROI Metrics: Processes & Tools (10 minutes)

6. ROI Metrics: Tactics & Examples (10 minutes)

7. Next Steps (2 minutes)

GHI is holding company comprised of seven privately-held firms in eight industries serving more than 5,200 clients worldwide. With staff on four continents and 400 business partners distributing GHI’s 90+ products and services …

GHI Mission

Helping Companies Connect Smarter™

with their customers, people, products, and processes to improve clients’ brands and grow revenues.

GHI Recognition & Awards

Small Business of the Year Award

Entrepreneur of the Year

Weatherhead 100 Award

Distinguished Marketing and Sales Award

Who’s Who in Technology Award

Cascade Capital Business Growth Award

GHI Recognition & Awards

Total Quality Management Gold Medal Award

Team NEO Success Award

Telly Award for Film / Video

Top 25 Internet Design Firms

Top 30 Largest Telecom Brokers

Success Stories…

• Tire retailer grew web site traffic 600%; orders into call center grew 300%

• Online furniture store grew revenues 900% within 24 months

• Logistics firm attributed 70% growth to internet sales

• Non-profit increased unique visitors from 600,000 to 3.2M

• Major clothing retailer landed at the top of the Search Engine results pages in less than 2 months

• Manufacturing client increased sales leads by 1000%

• Distributor client achieved $250,000 in new sales within 2 months

• Industrial manufacturer of arc furnace electronic devices generated $1M in internet sales within first 9 months.

By the numbers…

• First Client 1997: Early Adopter

• Managed more than 650 SEM Campaigns

• Largest Competitive Web Firms in town Outsource 100% of their SEO Projects

• 200+ SEM Partners worldwide & growing

• SEM represents 60% Internet Revenues

• 7 Staff Members dedicated to SEM

The best way to find new customers…

is to simply let them find you!™

SEM Experience / Success Stories

Air Enterprises

American Coffee Services

A Schulman

Ashland University

AtomicBox Logistics

Atromick

Auburn Environmental

Bacons Information

Brilliant Learning Centers

Calfee, Halter & Griswold

Callos Companies

Cardinal Commerce

Catan Fashions

CBIZ

Charter One Bank

Chico’s

Coldwell Banker Realty

Computer Sciences Corporation

Conrad’s Tire Express

Copperloy

Coral Company

Ellin LaVar Textures

Encompix

Ganaden Bio

GBS

Gerspacher Real Estate

Great Lakes Computer

Greater Medina Chamber of Commerce

Guardian Industries

HomeOfficeDirect.com

HH Greg

Hoffman Group

Honeywell Corporation

IHomeSchool.com

Interlake Stamping

Jetdock

Martindale Electric

National City Bank

NCLB Tutors

Reich & Binstock

Rick Santorum, US Senator

RICO Equipment, Inc.

Rocky Outdoor Gear

Speith, Bell, McCurdy & Newell

Stanley Proctor

Taft Law

Tape Rental Library

The Coral Company

Time Warner Cable

Tradesman International

Trillium Creek

Valley City Supply

Vernon Law

Watteredge

White Hat Management

Worthington Precision Metals

… Over 650 SEM Engagements since 1997

The best way to find new customers…

is to simply let them find you!™

SEM Partial Client List

Internet Marketing Overview

Web DesignOnline

AdvertisingSearch Engine

Marketing (SEM)Email Marketing

Social Media Marketing (SMM)

Branding

Content

Navigation

Usability

POD-Casting

VOD-Casting

Rich Media

Monetized Content

RSS Feeds

Banner Ads

Affiliate Marketing

Online Marketplaces

Forum Sponsorships

Local Advertising

Online Yellowpages

Shopping Comparison Sites

HTML Creation

Newsletters

E-Zines

Viral Campaigns

Surveys

Endorsed Emailings

Market Research

Search Engine Optimization

(SEO)

Pay Per Click Advertising

(PPC)

Analytics Code Optimization Content Development Link Building

Social Network Profiles

Blogs

Online Advocacy / Reputation Management

Social Bookmarking

Video Search

Viral Marketing

User Review Sites

Conversion Optimization

PPC Ad Optimization Search Term Research Local Search

Clickstream Analysis Origination Analysis Landing Page Development

Multivariate Testing Usability Graphic Design

Why is Internet Marketing Important?

The Internet is still growing! In fact, the Internet is one of the few retail areas of the current economy that is still experiencing double-digit growth.

• $165.9 billion: Total U.S. Internet retail sales in 2007.

• 1.5 billion: The estimated number of Internet users worldwide.

• 190 million: The estimated number of American Internet users.

• 12 billion: The number of searches performed per month on the Web.

• 85%: The number of web users that start their web experience using Search.

• 172 Billion: The number of email messages sent per day.

• 210 Million: The number of combined Facebook and MySpace users.

• 96 million: The number of blogs tracked by Technorati.

Source: ClickZ


Estimated Quarterly U.S. Retail E-commerce Sales as a Percent of Total Quarterly Retail Sales:

4th Quarter 1999–4th Quarter 2007Percent of Total

Source: U.S. Census Bureau


Internet Marketing, specifically SEM is targetable and trackable.

Targetable – you can target and reach exact markets with your message, at the point in time they are willing to make a purchase decision.

Trackable – you can get “instant” market intelligence from yourcampaigns that is either impossible or too costly to obtain in other media.

Creating Your ROI Plan

Define the Plan

Define Goals & Objectives

Establish Budgets

Create Project Plans

Identify Key Metrics

Analyze, Repeat

Plan {

Build {

Measure {

ROI = Research, Optimization, Intelligence

ROI Metrics Measurement Process

Research

Data discovery

Optimization

Improving your website to capitalize on the data

Intelligence

Learning about the results

ONGOING

Research

1. Empirical, timely, specific data about search behavior patterns is available online, at your fingertips, revealing the exact words your potential customers are searching with, and how much competition you face.


Research

2. Today’s site traffic analysis software allows you to mine rich information about your site visitors:

• How a visitor found your site; what keyword they used, and when• The exact path they took through your site• How long they stayed• At what point they left your site• Their geographic location• Whether they fulfilled one of your goals

This data can be aggregated to give you a well-rounded picture of your overall site traffic, and whether you are attracting visitors that are likely to become customers.


Optimization

1. We are no longer only a nation of sellers…We are becoming a nation of buyers.

Hunters have become the hunted …

The best way to find new customers…is to simply let them find you!™


Optimization

2. One of the largest most profitable companies in the world – Google – is working to bring business to you. If Google doesn’t help you succeed…they don’t succeed.

Optimize your site to drive search engine traffic to it. Then optimize your site to convert those visitors to buyers.


Intelligence

1. Know how to interpret your web site traffic data. Keepmaking changes to your web and internet marketing plans.


Intelligence

2. As you learn more about your site visitors, keep testing variations of your pages and content. Unlike other media, you can develop many versions of your ads and content quite easily and inexpensively. And you can get instant feedback on the results for comparative analysis.


You will repeat the ROI cycle forever…why?

• Market research data changes as user behavior shifts. • Thus, optimization tasks never stop. • And, you learn more every day as your gain more

intelligence.

Metric Measurement Process

The good news about this never ending ROI “cycle”:

It all starts with facts during the market research, works alongside the mathematical science of search algorithms, and is improved upon by the creative minds of marketing people like you!


How To Carry Out “ROI”

Research: Market Research

• Think about how your company “goes to market.” What do you sell and to whom?

• Research why people search for what you sell. Are they looking for a product? Are they solving a problem?

• Study your site’s visitors. How many visitors do you get now? Where do they come from? If they use search engines to find you, what words are they using and what pages are they landing on?

• Research web sites in your vertical market spaces, including blogs, message boards, periodicals, directories, social media sites and content aggregation sites. Do your customers use these resources?

ROI Metrics Measurement Tools

Research: Keyword Research for Search Marketing

Creating an effective search engine marketing campaign means attracting visitors to your site with keywords that are most likely to convert them into a customer!

Never assume the keywords your potential customers will use. Invest in an SEM campaign using the wrong keywords – and all of your efforts are in vain.

ROI Metric Measurement Tools


Keyword research tools:

• Google – use the free Keyword Tool at www.google.com/keywords and Google Trends at www.google.com/trends.

• Wordtracker – subscription-based web site that contains samples of searches: www.WordTracker.com

• Keyword Discovery – subscription-based web site that contains samples of searches along with geographic data: www.KeywordDiscovery.com



Google’s free Keyword Tool at www.google.com/keywords


Research: Competitors

Learning what your competitors are doing can help in formulating your own Internet marketing strategy. Competitive research tools include:

• Competitors’ Web Sites – study their site for keywords and phrases they use. These might be effective keywords for you to use in your SEM campaign. After listing these keywords, use the keyword analysis tools to determine their popularity.

• Google – conduct a back-link lookup to see what sites are linking to your competitors. Type link:www.YourCompetitor.com into the Google search box.

• Compete.com and Quantcast – shows traffic trends for competing websites and demographic data.

• SEODigger.com – find out for which keywords a site ranks high enough to be in Google’s Top 20.


Optimization: Search Engine Marketing (SEM)

SEM is comprised of:

• Organic Search Engine Optimization (SEO) attempts to improve rankings for

relevant keywords in search results by improving a web site's structure,

content, and relevant back link count.

• Pay Per Click (PPC) advertising uses sponsored search engine listings to

drive traffic to a web site. The advertiser bids for search terms, and the search

engine ranks ads based on a competitive auction as well as other factors.




Optimization: Conversion Optimization

Conversion Optimization: CRITICAL

Improves specific web pages to increase the likelihood that a site visitor will convert to a customer or a qualified prospect.

• Apply best practices in web design to help visitors find information that will help them make a decision.

• Study traffic patterns to see which pages or content is performing on your site, and which are not.

• Test various versions of web content to see which performs better (also known as multi-variant testing)


Optimization: Email Marketing

Email Marketing involves sending out targeted email communications to warm market leads or current customers, to improve communication and allow new sales opportunities:

• Setup a newsletter to send corporate communications, promotions, or helpful information to your current customers or prospects

• Capture email addresses from web site visitors by asking them to sign up for your newsletter, or require it to download a white paper


Optimization: Social Media Marketing

Social Media Marketing promotes your online brand by placing ideas within online communities with the hope that they will spread virally:

• Depending on your target market, your organization or company might have a Facebook profile, a MySpace profile, or a LinkedIn profile, among others.

• Your company should have a blog with specialized “content experts” that post at least 1 article per week, geared toward helping your potential customers make decisions.

• Businesses and organizations with a local focus should have a local search engine marketing campaign, be active within local discussion boards, setup local profiles on community sites, and post testimonials on review sites.


Intelligence: Web Site Traffic Analysis Software

If you don’t have web site traffic analysis software running on your web site, get it set up immediately…you are flying blind!

• If you host with a third-party provider, they can normally install a free or low-cost system.

• Some traffic analysis software can run into tens of thousands of dollars.

• Google Analytics is free of charge, www.google.com/analytics - and includes many features found in higher-priced commercial systems.


Key ROI Metrics

Two types of High Level ROI metrics to track:

Tactical metrics, such as higher search engine rankings

or more site traffic.

Strategic metrics, such as REVENUE, topline revenue,

number of qualified leads, number of new name

accounts, new distribution channels obtained, etc.

Key ROI Metrics

Examples of Tactical ROI Metrics

Unique Web Site Visitors

Average User Session Length

Average Bounce Rate Per Page, or For Site

Popularity of Key Conversion Pages

Number of Top 10 Rankings in Google, Yahoo, MSN

Search Engine Referral Rate

Number of Search Engine Referrals

% Growth in Link Popularity

% Growth in Site Traffic

Top Search Engine Rank for Company Name

Top Search Engine Rank for Company Brands

Average % Search Engine Referral Rate

Number of National / Local Interviews

Number of Pickups / Mentions in Major Media (Fox, Cleveland Plain Dealer, Newsweek etc)

Number of Mentions in “Blogosphere”

Key ROI Metrics

Examples of Client-Specific Tactical ROI Metrics

Rank #1 in Google for brand names

Rank #1 in Google for company principals’ names, or law firm partner names

Google results page descriptions accurately describe a specific page on the site

Increase impressions for a PPC campaign

Push negative online press to 2nd page of Google

Rank #1 in Google for any keyword related to “Medina, Ohio”

Rank above competitors for competitor names and brands

Key ROI Metrics

Examples of Strategic Based ROI Metrics

Total Sales – usually the most important metric!

Number of New Customers

% Change In Number of Sales

Average Sale Dollar Amount

Top Selling Products

Number of Leads Generated

Featured Promos Conversion Rate

Printable Coupons Conversion Rate

Average % Conversion Rate Vs. Industry Averages

Number of Newsletter Signups

Number of Surveys Taken

Key ROI Metrics

Tactical Metric ROI Examples

Metric: Top Ranking in Google for Keyword “ABC”

Tracking Mechanism: Perform a test search in Google

Value of Metric: Popularity of the keyword, effect on the online brand and number of potential site visitors:

Number of Monthly Searches #1 Rank Results in Traffic to Site

5,000 5,000 new impressions 500 visitors

Key ROI Metrics

Tactical Metric ROI Examples

Metric: Popularity of Key Conversion Page

Tracking Mechanism: Number of times a key page was viewed in a month, compared to the rest of the site.

Value of Metric: Percentage of overall site traffic that found the key conversion page.

Monthly Site Visitors Monthly Key Page Views Percentage of Views

1,000 200 20%

Key ROI Metrics

Strategic Metric ROI Examples

Metric: Total Sales

Tracking Mechanism: The web visitor reaches the “Receipt” page after checking out and paying.

Value of Metric: Total Value of Sales.

Sales Total Value Average Value Per Sale

10 $1,000 $100

Key ROI Metrics


Metric: Total Sales from Specific Keyword

Tracking Mechanism: The visitor reaches your website via a specific keyword search, and reaches the “Receipt” page after checking out.

Value of Metric: Average dollar per sale TIMES number of sales MINUS cost of top ranking for that keyword.

Sales Total Value Cost of KeywordNet Profit from

Keyword

10 $1,000 $100 $900

Key ROI Metrics


Metric: Number of Leads Generated

Tracking Mechanism: The visitor reaches the “Thank You” page after filling out a Request Form.

Value of Metric: Number of leads that convert to customers TIMES the average value of those customers.

Percentage of Leads That Close

Value of Each Sale

Value of Lead

25% $1,000 $250

Key ROI Metrics


Metric: Number of Leads Generated from SEO Campaign

Tracking Mechanism: The visitor reaches your website via organic search engines, then reaches the “Thank You” page after filling out a Request Form.

Value of Metric: Number of leads that convert to customers TIMES the average value of those customers MINUS cost of the SEO Campaign.

SalesValue of Each

SaleTotal Value

Cost of SEO Campaign

Net Profit from SEO Campaign

10 $1,000 $10,000 $1,500 $8,500

Key ROI Metrics


Metric: Number of Sales Generated from Email Newsletter Subscriptions

Tracking Mechanism: The email subscriber clicks a link within an email newsletter, then reaches the “Receipt” page after checking out.

Value of Metric: Number of subscribers that convert to customers TIMES the average value of those customers MINUS cost of the Email Campaign.

% Of Subscribers That Become

Customers

Value of Each Sale

Value of Each Subscriber

10% $50 $5

Build IM as a core competency:

Hire: $150k for experienced SEM manager, another $40k for each SEM specialist. Potential $250k direct investment the first year alone plus sales and marketing costs.

Transfer: Many IM firms like GHIIS have coaching services that transfer knowledge, best practices, proprietary tools & systems, processes to you for a much smaller investment.

Partner: Strategically align with an outside internet marketing firm to co-own, co-brand or simply resell the service.

Next Steps

Clearly define the goals of your site. Determine what elements within the Internet Marketing world make

sense for the goals you are trying to achieve. Establish defined metrics that you will use to track each of those goals. Define, set up and manage the tools to measure the metrics - web site

traffic analysis software.

Whether you decide for or against an SEM campaign, we recommend you conduct strategic market and keyword research to identify, validate and determine the optimal terms to reach and grow your target markets. This alone will impact your ROI for your web site and related IM campaigns.

Next Steps

Start an email newsletter using email marketing software that can track clicks to your site. Begin by sending it out once per month to your house list.

Setup a small test Google AdWords or Yahoo Search Marketing PPC campaign. You can start for as little as $1 per day. Coupled with web site traffic analysis, you can learn a great deal about your web site visitors in a short amount of time.

Do “ad hoc” usability testing with clients, partners, even friends & family. Assign them tasks on your site, watch what they do, and record it.

Other Steps

Documents

Metrics for Measuring Internet Marketing ROI