Social Networking Sites and Advertising

Social Networking sites are used by millions of people around the work and thousands of new users are jumping on social networking sites every day. Almost all of these social networking sites and new entrants are dependent on the advertising to generate the revenue to keep them going. However, a study by BurstMedia shows that consumers have a very low tolerance for online ads.

52.6% of those surveyed accepted that advertising will appear on a web page but they had very low tolerance for more than 2 advertising units per web page. 29.9% of survey respondents said that they will leave the site immediately if they perceived it cluttered. Women are more likely than men to abandon the site. (Have lots of ads on the site and can’t figure out why people are abandoning, this might be a reason, time to do some testing)

It is not only the publishers who are negatively affected by the ad clutter but also are the advertiser’s products and services. 52.4% respondents has a less favorable opinion of an advertiser when their advertising appears on a web page they perceive as cluttered.

A study by IDC shows that the users are less tolerant of Social Networking Services (SNS) advertising than other forms of online advertising. Ads on SNS have lower click-through rates than traditional online ads (on the Web at large, 79% of all users clicked on at least one ad in the past year, whereas only 57% of SNS users did), and they also lead to fewer purchases (Web: 23%; SNS 11%).

Lack of ad effectiveness and slowing economy is making marketers cut their spending on Social Networking sites.

Market research firm eMarketer has cut Social Network ad spending estimate for 2009 to $1.3 billion down from $1.8 billion it projected earlier. It has also lowered 2008 estimated from $1.2 billion from $1.4 billion.

“As consumer usage of social networking sites continues to flourish, advertising has not kept pace,” a release from eMarketer explained. “In 2008 and 2009, the recession will affect all forms of online ad spending, but experimental formats, such as the ones available on social networks, which cannot always demonstrate a proven return on investment, will be hit particularly hard.”

So what should Social Networking sites do? Charge customers for the using the site? Nope, that is not going to work either. A recent AdAge study showed that no matter how much consumers hate advertising but they are not even going to pay for their favorite sites.

According to IDC Lower-than-average ad effectiveness on SNS will continue to contribute to slow ad sales unless publishers get users to do something beyond just communicating with others. If the major services succeed in doing so, they will become more like portals, such as Yahoo! or MSN, and they will come closer to the audience reach of the top services. If that happened, publishers would be better able to monetize their SNS.

Side Note:

eMarketer has also cut its overall online ad spending estimates

It reduced 2008 to $23.6 billion from its August estimate of $24.9 billion. The online ad growth is still increasing and is expected to be 11.3 percent higher than 2007. In 2009 this increase will be 8.9 percent over 2008.
Hardest hit is the display advertising, for which the growth rate estimate was cut from 16.9 percent to 3.9 percent. Search ads are expected to grow at 21.4 percent in 2008, its lowest level so far. Next year the search-ad growth rate should be at 14.9 percent, the company predicted, dropping to 10.4 percent in 2013.

Comments?
Site: AnilBatra.com

Twitter: http://www.twitter.com/anilbatra

—————————————————————————-
Looking to fill your Web Analytics or Online Marketing position? Post your open jobs on http://www.web-analytics-jobs.com/

My Predictions for 2007

So what is year 2007 going to look like for Web Analytics? Here are my predictions for 2007

1. A Great Career Field– There will be a lot more jobs in this field in 2007. A great year for those who are planning to enter this field or looking to move into better jobs in this field. Most marketing jobs will have web analytics as a requirement. Currently there are 1024 open job on Indeed.com but I expect this number to rise as there will lot more openings than qualified candidates.
2. Lot more new writers – There will a lot more bloggers and writers in this field. Can somebody count how many blogs on Web Analytics are currently? This will help me set the baseline.
3. Web Analytics won’t be standing alone – Marketers will want 360 view of the customers. Integration of various data sources and tools will be expected from web analytics and other supporting tool vendors. Omniture started the trend with Omniture Genesis and this will continue we will see more acquisitions and partnerships similar to Omnitures.
4. Web Analytics will be about taking actions – More and more marketers would like to take actions and not just report the findings. It just won’t be about what happened, it will be about taking action to drive sales, user satisfaction, lead generation etc. Incentives and bonuses will be tied to the online KPIs. Optimization and Behavioral Targeting will become a common term used by marketers.
5. Behavioral Targeting – Only few main behavioral network players will be left and some of the existing ones with poor networks will either go out of business or be sold. See my previous article on why size of network matter. Behavioral Targeting won’t exist in isolation. Web Analytics tool will have to support behavioral targeting and visa versa. Also, on-site behavioral targeting will become very common.

Agree? Disagree? I would love to hear your comments.

Understanding the "Time Spent on the Site" Metrics

I have come across this KPI over and over again. Many of my clients want to report it on frequent basis and some even have this as one of their goals for the site. However, I am surprised to find that not many people (not even a lot of web analysts) understand how this metrics is calculated and what this is actually reporting. I am personally not oppose to tracking this metric but have an issue when people try to set goals with respect to improving time on site without knowing what this metrics is actually measuring.

What are the issues with the metrics?
Let’s start with looking at the issues with “Time Spent on the Site” or “Time Spent on a Page” metrics.

1. Last page viewed in a visit is not counted in this metrics
2. Single Page Visits are not counted in this metrics
3. Visitors are multitasking, causing inaccuracies in actual time spent on the site.
4. Tabbed Browsing, causing inaccuracies in actual time spent on the site
5. Download time of the page – Time spent on page calculation includes time taken to download the page.

Let’s cover this one at a time

1. Last page viewed is not counted in the “Time Spent on the Site” calculations. – All most all of the tools (Since I don’t know exactly how many tools are there and how each of them work, I am using almost instead of saying all the tools) use the time lapsed between 2 page requests to calculate “Time Spent on Site”. Since last page viewed does not have any subsequent page request, there is no time lapsed recorded and hence the time spent on last page is not counted in the calculation.
To illustrate let’s take an example of a person viewing page A, B and C
A was requested at 10:00:00 AM
B was requested at 10:00:20 AM
C was requested at 10:00:30 AM
User leaves the site at 10:01:40 (Read page C for 1 Minute and 10 seconds)
Web Analytics Tool will show Avg. Time on Site as 30 seconds instead of 1 min and 40 seconds, the actual time spent by the user.
2. Single Page visits – Since this is the first and the last page viewed by a visitor, as explained above this page views is not counted in “Time Spent on Site” calculations. Single page visits are very common due to search engines and other sites linking deep into the site, this is especially true for content sites (news, articles etc.). Users search or click on links and then read the content spend 5-10 mins and then leave. These users will never be counted in “Time Spent on Page/Site” calculations. If yours is a news/content site then I can assure you that you will be underreporting the time spent on site due to either large percentage of single page visits or the users clicking on few links (within seconds), finding what they are looking for and spending majority of the time (few mins) on the last page and then leaving the site.

Above is the report on a page I created to track timespentonsite.asp, this page was the only page that I viewed in my visit (single page visit), this page shows an AvgTime of 00:00:00 even though I stayed on this page for 5 or so mins. (Snap shot from http://www.USAIndian.net)

3. Visitors are multitasking – Most of the time visitors are multitasking. If they are at work they are doing their regular work, talking to other, getting coffee etc. A visitor opens site, views it for 20 seconds, gets distracted come back 20 mins later, pick up the site where she left, clicks on another link views that for 2 mins, clicks another link views it for 20 seconds and then leaves. Does this happen a lot? You bet, look around talk to your colleagues you will find this happening all the time.
How much time will be reported by web analytics tool? 22 Mins. Is that correct? No. Isn’t the actual time viewed 2 mins and 40 seconds.

4. Tabbed browsing – Tabbed browsing even complicates the issue. Jason Burby’s article http://www.clickz.com/showPage.html?page=3623280 talks about how tabbed browsing has made it much easier to open different page of the site and multiple sites. Jumping to another site, opening various pages of the same site complicates the calculation of time spent on page/site. A visitor comes to the site, within 1 min opens 10 pages in different tabs that he/she wants to view. Now spends 1 hour looking at these pages. What will web analytics tool report as the time spent on site? 1 min, even tough user viewed it for 61 mins.

4. Download times of the pages – If a page takes longer than normal to download it will affect the time spent on the site. User might spend 10 second downloading while only 5 seconds viewing the page, however time spent will show 15 seconds.

So with all these inaccuracies is this metric still useful. I think it still has a value as long as you understand what this metrics is showing.

Sudden changes in time spent could indicate a problem with site navigation, search engine optimization or users behavior. It can shows that one of the factors on your site has changed
a. Single Page Visits – Change in single page visits will affect this metrics. If you search engine rankings have changed that can affect single page visits and hence time spent on site.
b. Navigation on your site – it either is obstructing finding the correct information (time spent goes up) or has improved so users are getting right to they content they are looking for (time spent goes down).
c. Problems with a page – This can cause users to exit site prematurely, causing time spent on the site to go down unless the problem is on one of the pages with very high exit ratio. Since the last page is never counted in calculating time spent, a user who exits after seeing this page or exits after getting an error on this page won’t make much difference in time spent on the site calculations.
d. User Behavior – If nothing else changed, then users might be either multitasking more than before or are using tabbed browsing. This will result in changes in the time spent on the site.

Identifying & Solving Client Pains

On Tuesday Manoj Jasra (http://manojjasra.blogspot.com/) started a multi part series in which expert Web Analytics Analysts from the industry explain the “pains” they hear from their clients or have encountered. The expert Analysts also talk about strategies to deal with these pains. I think this is a great effort by Manoj to bring different perspective on client pain points.

Contributing to this series are:
- Eric Peterson
- Marshall Sponder
- Gary Angel
- Avinash Kaushik
- Anil Batra (me)
- Justin Cutroni
- Jason Van Orden
- Robbin Steif
- Akin Arikan
- Manoj Jasra

Yesterday he featured Avinash and I, you can read the full article at http://manojjasra.blogspot.com/2006/12/identifying-solving-client-pains-part.html

The two most important pain points that I have encountered over and over are:

1. Accuracy of the Data – The tools are purchased and set up without understanding the goals of the business. Since the goals of the business/site are not properly understood clients start measuring and reporting on whatever out of the box reports the tool can provide. In most of the cases tool is capturing information that should not be captured and skipping information that should be captured (improper tagging and other issues). To avoid this issue our approach is to start with understanding the business goals and then make recommendation for the tool and configuration of the tool.

2. Acting on the findings – One of the major issues is acting on the finding. Once we make recommendations many customers can’t take any actions on them. Why? Because of organizational structure. IT, who is responsible for making the changes to pages, reports elsewhere. Marketing can ask for changes but won’t get them because IT has other priorities.

How should this be fixed:
1. Change in organizational structure
2. Help the whole organization know the impact of these changes, show the impact these changes will have on the bottom line.

These are not the only pain points but are the most common that come up almost all of the time. In future I will write about all of the different issues (pain points) that I have come across, so stay tuned.

Measuring Real Conversion Rate

I recently read Avinash Kaushik’s post Excellent Analytics Tip #8: Measure the Real Conversion Rate & “Opportunity Pie”. I like the approach in general but I have a differing view on point #1 and point # 3 in this article. In my opinion almost every real visitor who lands on your site provides an opportunity for conversion.

Point #1, Avinash states that we should disregard those users who view only a page or stays on the site for less than 10 seconds when calculating the real conversion rate opportunities. In my opinion not everybody who bounces (views 1 page or views the site for less than 10 seconds) can be discounted. These users do present a fair change of conversion. Let me show you why I think that’s the case.
Let’s take an example of a visitor who searches on a keyword on a search engine and lands on the site, three things can happen before leading to the bounce.

1. User spends 5 mins reading the page and then leaves the site. (Assume this is a content site and we are collecting email addresses) Maybe the user will come back maybe he/she won’t.

2. User is so lost when he/she land on the site that she leaves (site is so disorganized or the landing page content or value proposition does not matches with the keyword he/she searched – even though site might very well have that content or product somewhere else)

3. User lands on the site which is not worth his/her time and leaves.– Wrong Site.

In the above 3 scenarios your can only discount number 3 but not number 1 and 2, 1 and 2 provide an opportunity to convert. (Note: Scenario No 3 is also worth looking at; not from conversion point of view but why and how did users land on your site when it was a wrong site for him/her).

Number 1 shows you that user was indeed interested in the site and can possibly sign up for email newsletters had your page provided him proper links or path to conversions. Discounting this user is a big mistake, considering how deeply linked sites are these days and users have lot of information on their finger tips. Users generally won’t spend time to find a path to get converted unless you can convince them, but these user provide an opportunity. This is especially true for lead generation sites, where visitors come to read something specific and they might read only one page in their visit but are valid conversion opportunity.

Number 2 shows that your site’s landing page was not well optimized to lead user to a conversion, you can’t discount the users and ignore this fact. This will be huge opportunity lost.

Note: Time spent on the site is calculated by time lapsed between 2 page views, so when a user views only one page they are automatically excluded from this calculations (not sure if there are tools that can calculate actual time spent even when a user views one page). So don’t discount users with one page views, think about why they only viewed one page what you could have done better to convert them

Regarding customer intent (Point # 3) Avinash says that “One of the biggest mistakes business make is thinking that every visitor to the website is fair game, conversion fodder”. Again, in my view there is always an opportunity to convert visitors to customers. In brick and mortar case I have seen my dad (who owned a retail store in India) converting those people who stopped by in front of his shop for 10 seconds or less or just stopped by to say hello or talk about a product they bought earlier or even to complain about a product they bought in past. If he had taken this approach of deciding that it was not worth his time to pursue those people with no intent of buying then he would have lost a lot of revenue and long term customers. For site which sells lot of retail items this is very true. For example a user comes to the site to gain some information about a product he/she bought in past, say information on how to setup up email on the cell phone, with no intention of buying a new cell phone or an accessory, this visitor can still be converted if the value proposition is there or site does a good job of selling. You can’t discount this fact.

Another thing that should be looked at, in calculating real conversion opportunity, is the effect of cookie deletion on visitor conversion. Cookie deletion inflates the number of visitors and hence your conversion potential. For example, a user comes to the site every day views few pages at the end of the each day deletes the cookies. This user will appear as 30 unique users when you look at the whole month but as you know this is only user. So you only have one conversion opportunity when you use visitor as your denominator.

You don’t have to agree with everything I said but let me know what you think.

Homepage – How critical is it?

Recently I came across a customer, who wanted to make a cool looking homepage and putting all their promotions and one of the main lead generation links only on the homepage.

Since the beginning of the internet the homepage of the site has been considered the most important page of the site. Till recently, that truly was the case. Visitors entered the site mainly through the homepage; it was the main entry to the site. Cool looking homepage was considered the key to the success of the site.

Visitor’s behavior has changed; homepage is no longer the only entry page into the site. Visitors enter from all sort of different pages and not just the homepage. Homepage is still an important page but not as critical as you might think. Look into the data provided by your web analytics tool before you start changing the homepage in a hope that once the page looks cool everything will be fine. Pretty simple process but a lot of marketers ignore it.

This customer’s decision to redesign their site was made without looking into the data their web analytics tool was providing. A simple analysis showed them that only 14% of the visitors were entering the site from home page, and only 24% of the visitors actually saw the home during their visit. They were going to loose an opportunity to convert 76% of the visitors by putting the promotions and the main lead generation link just on the home page.

These days users don’t have time to look around. Days of web surfing are long over. Users are generally looking for some specific information/product and once they find it (via one of the factors listed below), they come to the site, get the content/product etc from the site and are gone from the site without checking the homepage.

Below are some of the factors that cause users to bypass the home page.

1. Search Engines – Visitors, now more than ever, rely on the search engines to find the sites or pages which are relevant to what they are looking for. Search engines link into internal pages not just home page, at least that’s the case for well search engine optimized sites.

2. Viral Marketing – Friends referring friends to internal page (pages other than homepage) of the site.

3. Bookmarks – Visitors are book marking the internal pages which have content/products which interest them and then use these bookmarks to visit the site.

4. Deep linking on the other sites – Other sites, blogs etc. are linking to the internal pages with content/products relevant to their content.

5. Online Advertising – Online Advertising (and offline too) drive users to landing pages which are generally internal pages.

I am not saying that you should not have a nice homepage (people do judge the book by the cover, if the see the cover) all I am saying is your redesign should be based on facts and not just gut feel. Focusing just on the homepage is not a smart idea. Your critical promotions and conversion processes should be easily accessible from the top traffic and entry pages, if not all the pages.

As always, I would like to hear your point of view and the stories that you might be willing to share.

Web Analytics – Tool For Measuring Off Line Efforts

Web Analytics, as the name suggests, is used for measuring and analyzing the web traffic. Online campaigns can be effectively measured by almost all of the web analytics tool in the market.

To measure online campaigns you assign a unique campaign identifier at the end of the landing url and then use your analytics tool to see how many people responded to the end and then track them all the way to end conversion. It is easy (sort of) to calculate your Return on Investment on online campaigns.

You can use the same method to track offline campaigns, print, in-store display ads, billboards etc.

Here is how it works
1. Create a campaign tracking code(s) to track this campaign just like you do in online campaign
2. Create a easy to remember unique URL e.g. http://www.SeattleIndian.com/saveondining
3. The URL created in step 2 above redirect the users to actual landing page passing the campaign variables.
4. When a user arrives on page created in step 2, the user will be redirect as in step 3 and it will appear in the web analytics tool as the user is coming from a campaign.
5. Add the URL created in step 2 to your print advertising and you are done.

Example:
I will be using Google analytics (http://www.google.com/analytics) for this example

1. You have a campaign called “Save on Dining” running as a Half page color in local newspaper
Your campaign variables are
utm_source=Newspaper
utm_medium=Print
utm_content=HalfPageColorAd
utm_campaign=SaveOnDining

2. Create a easy to remember unique Vanity URL e.g. http://www.SeattleIndian.com/saveondining
3. The URL created in step 2 above redirect the users to actual landing page passing the campaign variables.
http://www.seattleIndian.com/dining.asp?utm_source=Newspaper&utm_medium=Print
&utm_content=HalfPageColorAd&utm_campaign=SaveOnDining
4. When a user arrives on http://www.SeattleIndian.com/saveondining will be redirect to http://www.seattleIndian.com/dining.asp?utm_source=Newspaper&utm_medium=Print
&utm_content=HalfPageColorAd&utm_campaign=SaveOnDining

Note: You can also set some variables on the Vanity URL web analytics tracking code instead of redirecting to a new URL.

Add the URL created in step 2 to your print advertising and you are done.

So why did I write this article? Well, there are two reasons why I decided to write this article today.
1. I have been involved with tracking campaigns for a fortune 50 company and this topic has come several times. So I had to write this one day.
2. I just read an article by Kevin Newcomb (http://www.clickz.com/showPage.html?page=3623461) about how one company successfully tracked offline campaigns so I thought this is a good time to write it so that users not only know that it can be done but how it can be done.

As always, I would like to hear your experiences with offline campaign tracking.

Who moved my traffic?

Your site traffic is down, you are running up and down the hallway freaking out. Who moved my traffic, who moved my traffic. Wait before you get all anxious about the traffic. Downturn in your traffic might not be something to freak out.
Below are some of the things to look at to find out why your traffic is down. Some reasons are within you control (stop freaking start working) some out of your control. Some might be very obvious and some might not.

• Seasonal Impact – Do year over year comparison and see how the traffic pattern was last year.
• May be overall traffic is down even for your competitors (do comparison at http://www.alexaholic.com/ )
• Has a new competitor entered the space? How is their traffic?
• Traffic drivers – How was the traffic from these sources?
  Campaigns (Banners, Search, Emails) – Did they ran as normal.
  Email – Did anything change there? Did you send out your regular emails, newsletters?
  Search – Did you change anything here, has search engines changed their algorithm.
  Search – Did you change your site? Meta Tags? Content?
  Affiliates – Has any affiliates changed their site.
• Environmental Factors – How is the weather in the geographical region where you have most visitors from? Nice weather can keep people outdoors, resulting in lower traffic.
• Was there any site outage?
• Have you made change to your web analytics tool configuration? If yes, investigate what those were? Problems in filter could be filtering out a lot of traffic.

This is a work in progress. Feel free to send me other things that you might look for.

Web Analytics Books

Know of a book I am missing send the name to me. I have not read all of these but complied this list of of Eric Peterson’s Yahoo Group postings.

Web Analytics Demystified by Eric T Peterson http://www.webanalyticsdemystified.com/about_wad.asp

Web Site Measurement Hacks by Eric T Peterson http://tinyurl.com/mzk6r

The Big Book of Key Performance Indicators” by Eric T Peterson http://www.webanalyticsdemystified.com/about_kpi_book.asp

Web Metrics: Proven Methods for Measuring Web Site Success” by Jim Sterne http://tinyurl.com/mptuj/n/n

Drilling down: Turning Customer Data into Profits with a Spreadsheet” by Jim Novo
http://jimnovo.booklocker.com/

Measuring the Success of Your Website: A Customer-centric Approach to Website Management” by Hurol Inan
http://www.hurolinan.com/books/WebAnalytics/default.htm?src\u003dbooks

Search Analytics: A Guide to Analyzing and Optimising Website Search Engines” by Hurol Inan
http://www.hurolinan.com/books/SearchAnalytics/default.asp?src\u003dbooks

E-Metrics: Business Metrics For The New Economy” by Matt Cutler & Jim Sternehttp://www.targeting.com/emetrics.pdf

All About Google Analytics

What is Google Analytics

Google Analytics is free web analytics tool (ASP) from Google. You can get a free account at
http://www.Google.com/analytics

Google Analytics Official Help Links

Help Center: http://www.google.com/support/analytics
Help Group: http://www.google.com/analytics/analyticshelp
Google Blog: http://analytics.blogspot.com/
Conversion University: http://www.google.com/analytics/conversionuniversity.html
Partners: http://www.google.com/analytics/support_partner_provided.html

Other Link
ROI Revolution: http://www.roirevolution.com/blog
this just in: http://cutroni.com/blog/
GA Experts: http://www.ga-experts.co.uk/blog/

More coming soon…

I would love to hear your tips and tricks