Recently, there have been a lot of conversations on Yahoo's Web Analytics Forum about the ROI (define) of Web analytics tools. Many people on the board offered suggestions; some were quite good, but nearly all were shot down as not applicable to most sites.
The reason it's a challenge is most companies don't act on analytics data to truly improve their sites, resulting in a zero ROI. Too many people spend a lot on analytics tools and supporting resources and little time acting on the data the tools provide. People struggle to quantify ROI for their Web analytics tool, but it just isn't possible without acting on the data.
Think of it this way: it's like calculating the ROI of your automobile if you're a traveling salesman who drives from sales call to sales call. There's really no direct ROI as the car costs money to operate. If it breaks down, you may miss the sale. But to be successful at the sales job, a reliable car is necessary. You may have a brand new BMW M5, but if you can't get to the appointments or close the deals when you have those appointments, the car doesn't matter. It really is a double-edged sword.
So can you quantify the ROI of a Web analytics tool? Yes! But this is part of overall site optimization ROI, not standalone analytics. You can optimize a site without analytics tools, but you're probably only scratching the surface and guessing at the best opportunities. You can analyze site behaviors without optimizing, but, again, you shouldn't.
It's amazing how many companies spit out masses of reports from their analytics tools and teams that merely look in the review mirror, asking: how did we do last month? The amount of time and effort put into many of these reports is wasted if people don't act on the information.
As in Web analytics, site optimization tools won't run themselves, either. When you look to make an investment in optimization (like analytics), be sure to factor in the significant resources -- internal, external or combined -- to help maximize the tools' value.
Stop trying to come up with the ROI, and start thinking about the bigger picture analytics supports. Analytics is just one small piece in the overall puzzle.
As the Chief Performance Marketing Officer for POSSIBLE, Jason supports the agency's global Marketing Sciences and Media Services programs.
His primary role is to help POSSIBLE teams and clients use data to craft digital strategies that attract, convert, and retain customers - maximizing ongoing ROI across paid, earned, and owned channels. He believes that brands can better serve their customers by understanding audience behavior, and that messaging should be targeted to individual customers through the use of testing, behavioral targeting, and CRM initiatives.
Jason has written extensively about digital analytics, optimization and digital strategy, including an ongoing column at ClickZ.com. He is the co-author of "Actionable Web Analytics: Using Data to Make Smart Business Decisions," which is one of the leading texts in the field of digital analytics. His client roster includes Microsoft, Nike, Nokia, Dell, Ford, Sony, PayPal/eBay, P&G, Alcoa, Expedia, Mazda, Intel, and Motorola, and more. Jason is a frequent speaker at conferences and seminars around the world ranging from the Cannes Lions, Adobe Omniture Summits, eMetrics, SES, ad:tech, BazaarVoice, and many other WPP events.
Follow him on Twitter @JasonBurby.
June 20, 2013
1:00pm ET / 10:00am PT