Metrics for Measuring Internet Marketing ROI by yaofenjin


									 Metrics for Measuring
Internet Marketing ROI

        Pete Kever
  Principal & Co-Founder
   GHI Internet Services
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

Weatherhead 100 Award

Entrepreneur of the Year

Small Business of the Year Award

Distinguished Marketing and Sales Award

Who’s Who in Technology Award

Cascade Capital Business Growth Award
  GHI Recognition & Awards

Team NEO Success Award

Top 25 Internet Design Firms

Top 30 Largest Telecom Brokers

Telly Award for Film / Video

Total Quality Management Gold Medal Award
                              SEM Experience / Success Stories

                                           Success Stories…
By the numbers…
                                           • Tire retailer grew web site traffic 600%; orders into call
• First Client 1997: Early Adopter         center grew 300%
• Managed more than 650 SEM Campaigns      • Online furniture store grew revenues 900% within 24
• Largest Competitive Web Firms in town    months
Outsource 100% of their SEO Projects       • Logistics firm attributed 70% growth to internet sales
• 200+ SEM Partners worldwide & growing    • Non-profit increased unique visitors from 600,000 to
• SEM represents 60% Internet Revenues     3.2M
• 7 Staff Members dedicated to SEM         • 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.

                         The best way to find new customers…
                           is to simply let them find you!™
                               SEM Partial Client List
Air Enterprises          Chico’s                       Guardian Industries     Speith, Bell, McCurdy &
American Coffee Services Coldwell Banker Realty                                Newell
A Schulman                                                                     Stanley Proctor
                         Computer Sciences             HH Greg
Ashland University       Corporation                                           Taft Law
                                                       Hoffman Group
AtomicBox Logistics      Conrad’s Tire Express                                 Tape Rental Library
                                                       Honeywell Corporation
Atromick                 Copperloy                                             The Coral Company
Auburn Environmental     Coral Company                                         Time Warner Cable
                                                       Interlake Stamping
Bacons Information       Ellin LaVar Textures                                  Tradesman International
Brilliant Learning Centers Encompix                    Martindale Electric
                                                                               Trillium Creek

Calfee, Halter & Griswold Ganaden Bio                  National City Bank
                                                                               Valley City Supply

Callos Companies         GBS                                                   Vernon Law
                                                       NCLB Tutors
Cardinal Commerce        Gerspacher Real Estate                                Watteredge
                                                       Reich & Binstock
Catan Fashions           Great Lakes Computer                                  White Hat Management
                                                Rick Santorum, US
CBIZ                     Greater Medina Chamber Senator                        Worthington Precision Metals
                         of Commerce
Charter One Bank                                RICO Equipment, Inc.           … Over 650 SEM
                                                                               Engagements since 1997
                                                       Rocky Outdoor Gear

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

                                  Online                        Search Engine                                                Social Media
     Web Design                                                                             Email Marketing
                                Advertising                    Marketing (SEM)                                              Marketing (SMM)

   Branding               Banner Ads                         Market Research                 HTML Creation           Social Network Profiles
   Content              Affiliate   Marketing                                                Newsletters             Blogs
   Navigation             Online                                                             E-Zines                 Online Advocacy / Reputation
                            Marketplaces                                                                                 Management
   Usability                                                                                  Viral Campaigns
                           Forum Sponsorships           Search Engine   Pay Per Click                                  Social Bookmarking
   POD-Casting                                          Optimization     Advertising          Surveys
                           Local Advertising                (SEO)          (PPC)                                       Video Search
   VOD-Casting                                                                                Endorsed Emailings
                           Online Yellowpages                                                                          Viral Marketing
   Rich Media
                           Shopping                                                                                    User Review Sites
   Monetized Content                                Analytics            PPC Ad Optimization
                            Comparison Sites
   RSS Feeds                                        Code Optimization  Search Term Research
                                                     Content Development  Local Search
                                                     Link Building

                                                         Conversion Optimization
                                               Clickstream Analysis           Multivariate Testing
                                               Origination Analysis           Usability
                                               Landing Page Development       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
                   Why is Internet Marketing Important?

Estimated Quarterly U.S. Retail E-commerce Sales as a Percent of Total Quarterly Retail Sales:
                            4th Quarter 1999–4th Quarter 2007
Percent of Total

     Source: U.S. Census Bureau
                Why is Internet Marketing Important?

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

Trackable – you can get “instant” market intelligence from your
campaigns that is either impossible or too costly to obtain
in other media.
  Creating Your ROI Plan

                   Define the Plan

   Plan   {   Define Goals & Objectives

                  Establish Budgets

  Build   {      Create Project Plans

                Identify Key Metrics

Measure   {       Analyze, Repeat
             ROI Metrics Measurement Process

ROI = Research, Optimization, Intelligence

               Data discovery

              Optimization                     ONGOING
 Improving your website to capitalize on the

         Learning about the results
                 ROI Metrics Measurement Process


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.
                       ROI Metrics Measurement Process


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.
                  ROI Metrics Measurement Process


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!™
                  ROI Metrics Measurement Process


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.
                 ROI Metrics Measurement Process


1. Know how to interpret your web site traffic data. Keep
making changes to your web and internet marketing plans.
                 ROI Metrics Measurement Process


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.
                    Metric Measurement Process

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
                 ROI Metrics 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!
                     ROI Metrics Measurement Tools

                    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 Metric 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

Research: Keyword Research for Search Marketing

Keyword research tools:

•   Google – use the free Keyword Tool at and
    Google Trends at

•   Wordtracker – subscription-based web site that contains samples of

•   Keyword Discovery – subscription-based web site that contains samples of
    searches along with geographic data:
                   ROI Metric Measurement Tools

Research: Keyword Research for Search Marketing

Google’s free Keyword Tool at
                       ROI Metric Measurement Tools

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

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

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

• – find out for which keywords a site ranks high enough to be
    in Google’s Top 20.
                        ROI Metric Measurement Tools

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.
ROI Metric Measurement Tools
ROI Metric Measurement Tools
                         ROI Metric Measurement Tools

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)
                        ROI Metric Measurement Tools

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
•   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
                       ROI Metric Measurement Tools

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.
                       ROI Metric Measurement Tools

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, - 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                   Top Search Engine Rank for
                                              Company Name
 Average User Session Length
                                             Top Search Engine Rank for
 Average Bounce Rate Per Page, or
                                              Company Brands
  For Site
                                             Average % Search Engine Referral
 Popularity of Key Conversion Pages
 Number of Top 10 Rankings in
                                             Number of National / Local Interviews
  Google, Yahoo, MSN
                                             Number of Pickups / Mentions in
 Search Engine Referral Rate
                                              Major Media (Fox, Cleveland Plain
 Number of Search Engine Referrals           Dealer, Newsweek etc)
 % Growth in Link Popularity                Number of Mentions in “Blogosphere”
 % Growth in Site Traffic
                  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,
 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
                       Strategic Metric ROI Examples
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.

                                                      Net Profit from
       Sales         Total Value    Cost of Keyword

        10             $1,000            $100              $900
                              Key ROI Metrics
                         Strategic Metric ROI Examples
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       Value of Each
                                              Value of Lead
        Leads That Close         Sale

              25%               $1,000            $250
                                Key ROI Metrics
                           Strategic Metric ROI Examples
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
Value of Metric: Number of leads that convert to customers TIMES the
average value of those customers MINUS cost of the SEO Campaign.

              Value of Each                     Cost of SEO   Net Profit from
  Sales                           Total Value
                  Sale                          Campaign      SEO Campaign

   10             $1,000            $10,000       $1,500          $8,500
                               Key ROI Metrics
                          Strategic Metric ROI Examples
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

          % Of Subscribers
                              Value of Each   Value of Each
            That Become
                                  Sale         Subscriber

                10%                $50             $5
                                   Next Steps

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.
                                 Other 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

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