Increasing customer lifetime value

Every marketer wants to increase the lifetime value of their customers. One of the best ways is to make sure that the consumer only thinks about your brand/product/service/store/e-commerce store before making a purchase.

Amazon prime is a perfect example of a service which can be used to increase the lifetime value of consumers. This service is a one-time annual fee and provides free 2-day shipping and next day shipping for only $3.99 on most of the products sold on Amazon.com.

By providing such a service for a minimal fee, Amazon has secured all the consumers who have signed-up for this service. Amazon is one of the largest collections of products across all categories – household products, baby products, electronics, books, tools, clothes, grocery, and apparel. Therefore, the chances that you will not find a product on Amazon are very few.

They have also made sure that a consumer, when is ready to buy a product, uses only Amazon.com to find the product and checkout.

A consumer previously would have done a lot of research on various comparison shopping engines like Shopping.com or Pricegrabber.com and put in a lot of time to find the best deal. Now, the same consumer who has signed up for Amazon prime would just go to Amazon, find the product and check out. This would save a ton of consumer's time and the consumer would also get the product delivered to their doorstep in 2 days or even next day if they pay $3.99.

I have been using this service over the last few months and have ended up make more and more purchases from Amazon. It all started with monthly diapers, then I ordered a multi-function printer, then I got a car seat for my son, then comforters, duvet cover and the list goes on. Living in the city of Chicago, I save on 10.5% sales tax and get the product gets delivered to my doorstep in a day. I used to order only a few products annually from Amazon but now, I order a product almost at a weekly level. Guess what! I also have the Amazon rewards credit card now, which has hooked me to Amazon. I have even ordered products from Amazon using my phone, as I was at a physical store which didn't have the actual product I was looking for.

From a marketing analytics ROI point of view, if I was running the Amazon prime program, I would love to do the analysis of shipping cost vs. the increase in the consumer lifetime value. As the service has been available for a few years, I am assuming they have a positive return and is helping increase profits.

This indeed is a classic case of increasing consumer lifetime value.

Page Depth, Bounce Rate: Are they actionable?

Page Depth and Bounce rate are two very basic web analytics metrics. Page Depth is the average number of pages visited during a site visit. Bounce rate is defined as the percentage of users who land on a webpage and exit the website.

How actionable are these?

Not a whole lot.

Page depth would provide the avg. number of pages viewed in a visit – it could be the same page refreshed 10 times and show a page depth of 10. However, this page could not be providing any business value. A consumer who views 2 pages with very high business value would have only a page depth of 2. Thus, from a business point of view, the consumer who had a page depth of 2 is more valuable. Page Depth – Didn't provide the correct picture.

Now, let's talk about the bounce rate. A segment of consumers land on a web page, consumes the content, and exit the website, yielding a bounce rate of 100%. However, this webpage is able to provide all the information the consumers are looking for and leaving the website. Thus, if you look at the bounce rate metric, it doesn't provide the correct picture.

The better way to measure the effectiveness of your website, is assigning business value to various pages/activities of the website. Calculate an average value per consumer visit and improvise the website to increase the avg. business value per visit. Analyze the click-stream (pathing analysis) to help increase the business value per visit.

Is Click-through the correct metric to measure a creative?

The answer to the question is "IT DEPENDS". The metric to measure a creative depends on what a creative is intended to do. The best way to find out is to establish a goal of the creative. Typically, the creatives can be bucketed to mirror the stages of the consumer funnel – Awareness, Research, Buy and Loyalty.

Based on each of these buckets, the correct metrics to measure the effectiveness of a creative can be defined. The creatives in the "Awareness" bucket should be measured on CTR, as the creative is indented to increase the awareness or catch the consumer's attention. The next level of creatives in the "Research" bucket should be measured on the engagement or interaction of the consumer with the banner or landing page or the website. Thus, the correct metric would be interaction rate, page depth, time spent etc. The next level of creative "Buy" section would be aimed at driving consumers to make a purchase. As we all would agree the correct metric to measure these set of creatives should be conversion – revenue, number of units sold, number of sign-ups etc. The final set of creatives – "Loyalty" set would be driving existing consumers to either continue the services they had enrolled in or cross-sell/up-sell for different products and services. Thus, measuring how the existing consumers are interaction with the website would be the best way to gauge the performance of these creatives.

It gets more and more complicated but the better thought through the measurement process is, the better results one would be able to measure.

In-text advertising vs. Display Media

With In-text advertising gaining popularity among various advertisers, it is very interesting to see how they perform. Vibrant and Kontera are the two major players in that segment and have been known to show very high Click-through rate up to 5% at times.

When these publishers are on the media plan, they tend to skew the performance of the overall campaign and also make all the other publishers look not so good.

My thoughts are that display banner ads and in-text advertising comparison is not a APPLES to APPLES comparison. They should not be compared against one another.

My personal belief is that there could be a lot of accidental clicks in the in-text advertising. Site analytics should be used to gauge the business value of these consumers. Specific metrics like page depth, time spent and if there are any specific "call to actions" should be tracked.

I also believe that some consumers, who have get exposed to in-text advertising for the first few times, find it very interesting and a brand new concept. This allures them to click on the ad; however they did not intend to be on the advertiser's website. These kinds of situations cause a lot of accidental clicks.

This is a new medium and with time we all will get better understanding and provide accurate POVs to our business partners to better gauge the value addition from the in-text advertising campaigns.

Very high interactions on the banner, however very low clicks – Why?

Sometimes we notice that there are very high interactions on the banner, however the number of clicks on the banner is very low – how do we explain this? My personal point of view is that the banner could be providing a lot of information to the consumers that they need and thus the consumers are not allured to click on the banner.

A banner having a few videos embedded or a banner with a few tabs, with a lot of information about a specific product or a service would not attract consumers to click on the banner.

Does this mean the consumer is not interested in knowing more about the product – NO; the consumer already got so much information about the product that he or she doesn't need any more information at that time. I would rate this as a perfect consumer experience. As an advertiser, you have been successful in engaging the consumer and providing enough information to the consumer about the product or service.

THEY ALREADY GOT WHAT THEY WERE LOOKING FOR!

 

CIMA Breakfast Bytes: September 18, 2008

CIMA BreakfastByte: Does Research hold any weight within the dynamic digital space?

Time: 7am - 9am
Location: The Westin (909 N. Michigan Ave, 3rd Floor, Governor's Suite)
Member Price: 25
Non Member Price: 35

Join CIMA for an insightful conversation with our industry leaders as we pull back the curtains on this informative topic.

How do marketers, agencies, and publishers justify digital ad spending when planning, executing, and analyzing campaigns?

Listen to how our panel experts recommend how you can partner with your clients to effectively plan and measure campaigns to deliver strong results. The discussion will cover whether panel data and syndicated research should or should not continue to be used in the media planning process. Our experts will debate the validity of 3rd party research analytics and discuss how effective syndicated research and panel data can be in the planning process.

We will cover what marketers can do to answer the challenging questions . . .
Is this data really accurate?
How does this compare to offline research metrics?
Why doesn't all syndicated research report the same numbers?

Agenda:
7:00am - 7:30am Check-In
7:30am - 8:00am Breakfast
8:00am - 9:00am Discussion
9:00am - 9:15am Q & A

Early Bird Registration (July 16 - August 29)
Member Ticket(s) - $25
Nonmember Ticket(s) - $35

Registration (August 30 - September 12)
Member Ticket(s) - $30
Nonmember Ticket(s) - $40

Location:
The Westin Michigan Ave (909 N. Michigan Avenue, 3rd Floor, Governor's Suite)

Moderator:
Blagica Bottigliero, President, Bsolutions LLC

Speakers:
Stu Rodnick, Sr. Director of ADlytics, Platform-A
Kara Manatt, Research Director, Cross Media Research, Dynamic Logic
Amit Prakash, Associate Director, Digital Marketing Analytics, OMD
Karen K. Scott, Interactive Associate Media Director, DRAFTFCB

 

Ad server reports clicks but Web Analytics tool does not show traffic

Often times the ad server would report that the online advertising (Display and Search) is generating clicks but the site analytics tool like Webtrends, Omniture etc does not report traffic. One of the first things to check is if the consumers who are clicking on the ads are actually loading the landing page.

One of the ways to check that is by putting an ad server tag on the landing page and thus be able to track the click to landing page load rate showing the abandonment rate from click to page load. The number of landing page load should match very close to the web analytics tool numbers.

There could be still some discrepancy of about 10-15% due to:

- Webanalytics tool click-throughs are de-duped

- The adserver code could be at a slightly different place than the web analytics tag and will have differing execution times

- Javascript disabled users would count the ad server tag but most of the web analytics tags need Javascript enabled browsers